India still prime destination for outsourcing: D&B
New Delhi |
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India is expected to remain the prime destination for outsourcing/offshoring, according to a new Dun & Bradstreet (D&B) study. This is not just because it is extremely competitive when it comes to salary costs, but mostly because Indian outsourcing firms have now matured into truly global companies that can offer best in class services at very competitive prices, notes the study.
The fourth edition of D&B’s ‘India’s Top ITeS and BPO Companies 2008’, compares India with leading outsourcing destinations like China, the Philippines, Mexico, Malaysia, Brazil, Czech Republic and Chile. It indicates that India’s ITes industry still hold a cost advantage, banking on low wage and salary cost, states the report. India has the second lowest ITes/BPO salary base of about $7,500-8,500, just little above China’s base of $7,000-8,000.
The Philippines, on the other hand, has an average salary of $9,000-10,000. Besides, it has the added advantage of a large pool of ever-increasing technical graduates. The other positive for India is one of the largest producers of English-speaking graduates, including engineers and management graduates. A high number of such graduates mean that companies can offer higher value-added services to clients.
Manoj Vaish, President & CEO – India, Dun & Bradstreet said: “While the ITeS-BPO industry is bound to be impacted by the financial crisis, firms have taken measures to mitigate some of that risk. The industry has started providing services to a wider set of verticals, thus reducing their exposure to any one vertical. For instance, the BFSI sector’s share of the overall pie of services offered by the surveyed ITeS-BPO companies dropped to 28 per cent in FY08 from 31 per cent in FY07. This trend is set to continue.”
The study also highlights that ITeS and the BPO segment continues to hire in large numbers. Overall, 177 companies have a total of 4,42,349 employees and covers 63 per cent of the total employee base of Indian ITeS and BPO sector of 7,00,000 (involved in BPO exports), as per the NASSCOM estimate. The profiled companies registered a y-o-y growth of about 23 per cent in terms of total employees base. The revenue per employee of the respondent companies was approximately Rs 600,000. In FY08, the Indian ITeS and BPO companies’ client portfolio included around 26 per cent domestic clients and around 74 per cent international clients.
Vaish further added: “While conventional BPO services continue to form a majority of the total services offered by the surveyed companies, this year’s study has seen conventional BPO services drop by almost 10 per cent from last year. On the other hand, service lines such as KPO, LPO, EPO and eLearning have increased its share considerably. Margins are substantially higher in these services and with companies keen to diversify, revenues from these services are bound to increase.” |
| Top Indian IT cos to tide over slump |
At a time when customers in the US and Europe are tightening their IT budgets, leading Indian tech firms are betting on their huge pile of cash to steer through the global economic crisis and also to explore M&A opportunities in a world reeling under severe liquidity crunch. Each of the top six Indian software services firms-TCS, Infosys, Wipro, Satyam, HCL Technologies and Cognizant-have cash reserves in excess of $500 million, with Infosys topping the list at $1.8 billion.
This gives these firms flexibility to invest in newer opportunities including M&A possibilities. A comfortable liquidity position is a great resource to quickly acquire a distressed asset, points out Dr T R Madan Mohan, managing partner of Browne & Mohan, a Bangalore-based consultancy firm. Given the global turbulence, many acquisition targets could come at attractive valuations. "A strong liquidity position is a comfort factor not just for a company, but also for clients and employers," says Infosys chief financial officer V Balakrishnan. "This also allows for making the right kind of investment in the current context be it an acquisition, new services portfolio or creating technology solutions."
And it's not just the top six, even mid-tier companies are looking to leverage their cash reserves for M&A opportunities. Patni Computer Systems, with around $270 million in cash, is one such company that's eyeing M&A opportunities. "Cash is a premium in these tough times, and it will come handy," says Patni chief financial officer Surjeet Singh. The company is currently evaluating several firms in Europe for making an acquisition.
Many other mid-tier companies including MindTree Consulting, which acquired Bangalore-based Aztecsoft in May this year for around $90 million, might look at smaller acquisitions for topline growth. Typically around 10-12% of a company's topline translates into cash reserves for the IT companies. However, the cash reserves could also be a misleading number as many of these companies have invested in assets which has the potential to generate a negative returns like the fixed maturity plans of mutual funds or treasury investments.
Source: The Economic Times |
| India Inc plans new campaign for Davos 2007 |
The World Economic Forum is preparing for the biggest annual event in its calendar, and Corporate India Inc plans to build on its India Everywhere campaign. The World Economic Forum (WEF) promises that its annual meeting next year from January 24-28 at Davos, Switzerland, will be a unique one because it believes that the world is at a crossroads, facing a whole new set of global challenges.
Says Peter Torreele, Managing Director and member of the Board, WEF, “Davos 2007 is going to be one of the most important summits ever, because we have never had such an abundance, unfortunately, of instability (across the world). We have never struggled so much through the programme to put the pieces together. There are so many inter-related issues, that this summit is possibly going to be an eye-opener for a lot of people.”
Reflecting this recognition and complexity will be the agenda and main theme: The Shifting Power Equation. Around this main theme, the Summit will focus on four areas: Driving Growth; Addressing Global Fault Lines; Exploring Identity and the Communication Disconnect; and Leading in a Networked World. WEF believes that the shifting power equations across the world arise from the fact that what we are experiencing today changes not just at the geo-political level, but also at the economic and social levels. Political uncertainties are seen in Iraq, North Korea and the United States. There is also a shift from the West to East with the emergence of China and India.
Adds Torreele, “It affects everybody. The discussions today in Europe on energy security are a direct consequence of the economic growth in China and India and the lack of resources. We want to make sure that we all understand and appreciate this shift and that global growth will continue.”
WEF also sees early signs that growth in the US will slow down and these could have economic consequences for the world economy as a whole. The third shift that will be on the radar is the social shift. Today, with the phenomenon of Web 2.0, there is a new horizontal community of about 30 million people connecting across borders with the same values and interests. Based on these premises, the hot topics for discussions at Davos are likely to be nuclear proliferation, climate change, Web 2.0, energy security and the possible US political climate in 2008. The Co-Chairs of the meeting will be John Browne of Madingley, Group Chief Executive, BP, United Kingdom; Michelle Guthrie, Chief Executive Officer, Star Group, Hong Kong SAR; Neville Isdell, Chairman and Chief Executive Officer, Coca-Cola Company, USA; James J Schiro, Group Chief Executive Officer and Chair of the Group Management Board, Zurich Financial Services, Switzerland and Eric Schmidt, Chief Executive Officer, Google, USA.
Source: Business Standard |
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India witnesses 23% rise in IP addresses in Q3: Survey
Reflecting the rising Internet penetration in the country, India saw a 23 per cent rise in IP (Internet Protocol) addresses with 2.6 million connections in third-quarter ended September over previous quarter’s 2.1 million, according to a survey by Akamai Technologies. India ranked 20 in terms of IP addresses, while the US with 109 million addresses and China with 38 million connections were ranked at the top two slots, respectively, said Akamai’s ‘State of Internet’ report. India has an estimated 32-46 million active Internet users and the user base is growing at over 25 per cent a year for the past three years. Despite growing user base, India ranks a low at 153rd slot in terms of per capita IP addresses with only 2.3 IPs for every thousand people. China had 30 IPs per thousand people and US had 360 IPs per thousand.
“The increase in user base may be attributable to more people turning to the World Wide Web for news and video content related to the Beijing Olympic Games, which took place in August. We also noted a gradual improvement in terms of IP per capita which increased to 2.3 unique IPs per 1,000 people, and believe India is moving in the right direction and is poised for significant growth in Internet adoption in the coming years,” said Mr Sanjay Singh, Managing Director of Akamai’s India operations. Users in India were gradually shifting from dial-up speeds to high-speed connectivity as the country had three fourth of Net connections with speeds above 256 Kbps. Net connections with speeds above 2 Mbps stood at 5 per cent growing at 16 per cent.
Source :
The Hindu Business Line |
SatNav lines up $10 mn
SatNav Technologies, a Hyderabad-based provider of navigation and global positioning system (GPS) technologies, will make an incremental investment of $10 million (about Rs 50 crore) by March 2010.
The company, earlier a part of Satyam Computer Services Limited before being spun off into a separate entity in 2004, will make the first tranche of $5 million investment by March 2009 for enhancing the retail presence of its flagship GPS navigation software product SatGuide and for boosting the depth of its map content. The second tranche will see an equal amount being infused into building up its portfolio including 5-inch and 7-inch products and in-dash navigation systems for cars by March 2010.
SatGuide, which guides the user within a particular city or from one city to another across India, is currently available on Windows mobiles, personal digital assistance, personal navigation device, laptop, desktop and on non-Windows phones.
Speaking to Business Standard, Amit Kishore Prasad, founder, managing director and chief executive of SatNav, said the company would utilise the $7.5-million capital raised from Sequoia in June this year, besides pooling in the rest through internal accruals, to fund the expansion.
“R&D on the in-dash navigation system, which comes equipped with an in-built 7-inch display monitor, AM/FM, DVD player, full-function remote control and USB 1.1 interface, is under way. We are in talks with major car makers who are trying to gauge the market. We expect two to three companies to tie up with us soon,” Prasad said.
Around 15 per cent of all car sales goes with GPS globally and the Indian market is no different, which holds promise for in-dash navigation systems. The product will be launched in April 2009 and the company is targeting to sell it at Rs 25,000 per unit, he said, adding, “We hope to sell about 20,000 units in the first year of the launch.”
Source : Business Standard |
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