TCS to step up hiring as info-tech spending takes off

As demand picks up, pricing power will return. TCS has been winning deals.

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— Mr N. Chandrasekaran, CEO of TCS

Adith Charlie

Mumbai, Dec. 30

In what could be a firm indicator of turnaround times for the IT industry, the CEO of India's largest IT services company said fiscal 2010-11 is likely to see his company step up the pace of hiring, give wage hikes, as well as increase capital expenditure.

“We are likely to hire more people next year ( vis-à-vis the current fiscal) and we have also increased the quantum of work done offshore. This means we have to create more facilities going forward,” Mr N Chandrasekaran, Chief Executive Officer and Managing Director of Tata Consultancy Services, said in an interview to Business Line.

Next year's capex for the $6-billion company is likely to be higher than the Rs 1,300 crore earmarked for the current year, a figure disclosed by the group chairman, Mr Ratan Tata, at the company's annual general meeting last year.

However, Mr Chandrasekaran would not provide concrete numbers as the company is still in the process of firming up its plans for the next fiscal, ahead of its third quarterly results that are to be announced on January 15.

This revival in IT spend is propelling TCS to firm up hiring plans for next year and it is being led by companies in the banking, financial services space across geographies.

Positive indicators

Though companies in sectors such as manufacturing, hi-tech, telecom and manufacturing are still ‘not out of the woods', there are enough indications of things revving up next year, said Mr. Chandrasekaran. “I believe that during the course of the year these sectors will turn positive and deliver growth. The good news is the decline (in these sectors) has stopped,” he said.

TCS expects 2010 to be a better year for the company and the IT industry as a whole. And the growth is largely going to be volume-driven.

“Short term, there may not be a pricing uptake; but I do not expect a (pricing) decline either. As demand picks up, pricing power will return,” said Mr Chandrasekaran.

The good news is that discretionary or optional technology spending among corporations also seems to be making a comeback, especially in the BFSI (banking, financial services and insurance) space. TCS Bancs (its financial products suite), which is “positioned against discretionary budgets”, has been winning deals across geographies, securing engagements even in geographies such as continental Europe that are yet to see an uptake, he said.

Better clarity

“Fundamentally, there is lot more clarity and there is a systematic way of approaching business from the customers' end vis-à-vis last year. We just hope that Europe as a geography also starts showing signs of recovery,” he said.

Starting January, TCS will approach campuses for recruitment for 2010-11. It may be noted that for the current fiscal the company has already given 24,888 offer letters for campus recruits, a good percentage of whom are expected to join, in a staggered manner through the fiscal.

Earlier, TCS had indicated that it had nearly frozen lateral hiring for the current fiscal. That too seems to be changing and the company has increased the pace of hiring laterals or experienced professionals.

TCS, which had clamped down on salary hikes this year, is likely to be more lenient next year. The company is internally huddled in discussions to see how much wage hikes can be implemented next year, said Mr Chandrasekaran.

For the quarter ended September 2009, TCS had reported a 29 per cent rise in net profit at Rs 1,642 crore against Rs 1,271 crore in the corresponding year ago period

Has Microsoft Turned Into The New IBM?

Surfing the web today, I came across a very interesting interview on SeattlePi with Don Dodge, who was Microsoft’s Director of Business Development for the Emerging Business Team until getting laid off last month. During the interview, he revealed his opinions on Microsoft, their current situation and where they’re heading. He also revealed that he thinks “Microsoft is a lot like IBM was in 1985”, going on to say that “after 20 years they are losing the innovation edge.” This got me thinking; has Microsoft lost the ability to innovate after being the most dominative force in computing since the late 1980’s? And if so, why?

I think a key to the solution is the sheer amount of things Microsoft does. When you think of the number of markets Microsoft compete in, you can understand that it’s extremely difficult, maybe impossible, to dominate every market. Not only do Microsoft develop and maintain the Windows OS, they also compete in the market for smart phones with Windows Mobile; the gaming market with the Xbox 360 and internet search with Bing.

Microsoft only dominate one of these markets with Windows – even with competition from Mac OS X and Linux, 88.5% of the world’s population uses Windows on their PC’s, which is beyond monopolisation… Despite this, 62.2% of computer users are using Windows XP, which completely supports Dodge’s accusations that Microsoft aren’t innovating as much as they were before. Rightly or wrongly, Vista was never a favourite of consumers as it had a lot of bad press on and off the web. In my opinion,
Windows 7 is a solid operating system, and when I’m using Windows, I use Windows 7.

When comparing the progress of Windows to its nearest competitor, how has it advanced since Windows XP was released in 2001? When Windows XP was introduced to the world, Apple had just released Mac OS X 10.1, and compared to Microsoft’s monopoly, Apple wasn’t in a good position with many criticising 10.1 for its bad performance. The next time we saw a consumer OS from Microsoft, however, was in January 2007, and the results weren’t worth the 6 year wait for many…

In the same time, Apple had released Mac OS X 10.2, 10.3 and 10.4, with Leopard coming 6 months later. So what were Microsoft doing in those 6 years? To the average user, there wasn’t much reason to upgrade from XP to Vista, because people were all too familiar with XP – why switch to have software incompatibilities and an unfamiliar interface?

On the mobile front, having used all three main players in the smartphone market right now (Windows Mobile 6.5, iPhone OS and Android), I’d only consider using iPhone OS or Android. Microsoft’s got a lot of catching up to do, and has fallen behind Apple and Google in terms of innovation and ease of use.

Navigating around a Windows Mobile device often feels far too long winded, with menus and menus of choices it’s simply not as user friendly as the iPhone or Android, even with HTC’s custom interface. Add this to the numerous delays of Windows Mobile 7, there’s no way I’d buy a Windows smartphone right now.

Having gone from the innovator to the company playing catch up with every other major player, Microsoft needs a new direction to wow people again. They’re very much in the gaming market with the Xbox 360, and hopefully we’ll see some pushes towards a better search with Bing in 2010 – how about a consumer friendly surface-like device? Competition for Apple’s tablet anyone?

PricewaterhouseCoopers Executive Director Resigns

NEW DELHI --Auditing company PricewaterhouseCoopers, or PwC, Tuesday said Executive Director Dinesh Kanabar and some tax executive directors have resigned.

"We have appointed Ketan Dalal and Shyamal Mukherjee as the new joint leaders for PwC's tax and regulatory practice," PwC said in an emailed statement.

PwC didn't give a specific reason for the resignations or the dates of the same. It didn't divulge the names of the tax executive directors who had stepped down, nor mention how many.

Price Waterhouse, the Indian affiliate of PwC, has been under the scanner because of its previous links with Satyam Computer Services Ltd., whose founder and then chairman, B. Ramalinga Raju, revealed a massive fraud at the Hyderabad-based company earlier in January.

Price Waterhouse audited Satyam Computer's financial statements from the quarter ended June 30, 2000, through to the quarter ended Sept. 30, 2008. The audit house subsequently said its accounts shouldn't be relied upon.

Two of the auditors--S. Gopalakrishnan and Srinivas Taluri--were arrested in January in connection with the Satyam Computer case.

PwC has said that since then it has been making "a significant investment in training and taking other steps to further enhance audit quality" in India.

Earlier this month, PwC named Gautam Banerjee as the chairman for its India auditing business after Ramesh Rajan stepped down from the post.

Millions in Britain face pay freezes, salary cuts in 2010

LONDON: The new year is going to be a cold one for the salaried class in Britain as millions of people are likely to see their spending power slashed again in 2010 due to salary cuts and pay freezes, a media report says.

"Millions of people face a second year of pay freezes or salary cuts next year dashing hopes that the end of the recession will ease the squeeze on family budgets," the Sunday Times said.

Up to two-thirds of companies in the private sector are planning to freeze or cut pay next year -- a substantial increase compared with this year, the newspaper said.

Quoting a poll by the British Chambers of Commerce (BCC), the daily said 58 per cent of company directors were planning wage freezes during 2010 and another 5 per cent planned to cut pay next year.

This grim forecast has, however, enraged union leaders and brought a series of strike-threats for slashing workers' spending power for the second year running.


Unions said the state of the economy should not be used as an "excuse" to impose pay freezes by companies continuing to make profits.

Derek Simpson, Joint General Secretary of Unite, the biggest trade union in Britain with two million members told the Sunday Times, "Our members have been prepared to share the pain and take pay freezes this year. But we will challenge any attempt to freeze pay in companies that are making profits next year."

British Airways, Hewlett-Packard, Fujitsu, Swinton insurance and Ladbrokes have already announced plans to freeze pay next year.

Citing BCC Director General David Frost the daily said, "we face a tough year ahead -- it will be a really long haul. The stark reality is that business finances are still under incredible pressure and they are doing everything they can to keep hold of cash."

Despite signs of economic growth, millions of consumers face a bleak 2010.

Value added tax (VAT) is set to rise to 17.5 per cent this week, unemployment is expected to increase further and City forecasters predict interest rates to rise later in the year. Personal tax allowances will be frozen in April when the new 50 per cent income tax rate also comes in, the report added.

Britain is predicted to have moved out of recession during the final quarter of this year, the last of the leading European economies to do so.

Infosys set to get K'taka contract on T&D losses

The Rs 380-crore tender is part of the Accelerated Power Development and Reform Programme of the central govt.

Infosys Technologies, India’s second largest software services company, is close to winning a Rs 380-crore contract from the Karnataka government’s electricity supply companies, aimed at stemming transmission and distribution losses.

The contract is being awarded as part of the Accelerated Power Development and Reform Programme (APDRP) initiated by the central government.

Industry sources indicate that Infosys has emerged as the lowest from among 11 bidders, including Wipro, TCS and KLG Systems. A company spokesperson declined to comment.

Indian software service vendors are all vying for a piece of the Rs 10,000-crore of contracts under the APDRP, more so as this is a programme which could be expanded later. TCS and HCL, Infosys' big rivals, have won similar contracts on addressing T&D losses in other states.

Infosys has been stepping up its India presence during the past 18 months, setting up a separate India business unit. It has so far bagged three major projects in the government sector. Earlier, the company had won a project to set up and manage a central processing centre for the income tax department and one from the ministry of commerce to develop an eBiz portal to help provide one-stop services to industry.

The company has also bagged a pilot project to roll out an Integrated Coach Management System for the Indian Railways. Though the initial (pilot) project cost is small, its success will determine the schedule on when the railways will go for floating the final tender for the project, estimated to be Rs 210 crore.

Cognizant picks up 700 Anna varsity students

Time to celebrate: Jubilant Anna University students celebrate their getting job offersfrom Cognizant Technology Solutions, in the presence of Dr P. Mannar Jawahar (right),Vice-Chancellor, Anna University, and Mr R. Ramkumar (second from left), Vice-President, Corporate Communications, Cognizant, at the university premises onTuesday.- Bijoy Ghosh

Hindu

Chennai, Dec. 22

The US-based Cognizant Technology Solutions offered jobs to over seven hundred students of Anna University on Tuesday. Though this was less than the 1,000 offers that Cognizant made last year, Dr P. Mannar Jawahar, Vice Chancellor, Anna University, is happy.“The numbers may be less from Cognizant, but we are still happy considering the downturn in the software industry,” he told Business Line.Cognizant was the first large recruiter this year in the university that includes the College of Engineering, Guindy, Madras Institute of Technology, Chrompet and Alagappa College of Technology.While Tata Consultancy Services, which is also a large recruiter, is visiting the campus on Wednesday, over 55 more companies across various sectors plan to visit in the next few days, he said.

The starting salary offered by Cognizant remained unchanged from last year, at Rs 3 lakh a year. Around 1,640 students took the test, of whom 1,345 were shortlisted and 700 were offered jobs, Dr Jawahar said.Before Cognizant, ‘core and dream' companies such as Caterpillar and Larsen & Toubro that offer a starting salary of over Rs 4 lakh have given job offers to around 300 students, he said.

MindTree: Looking for Buys in $50 Million-$100 Million Size

BANGALORE -- MindTree Ltd. is looking for acquisitions valued at $50 million-$100 million to help in its bid to post $1 billion in revenue by 2014, the Indian software exporter's chief executive said.

"I would think, maybe 20% of our revenue would come from acquisitions as part of this $1 billion vision," Krishnakumar Natarajan, who is also the managing director of the company, told Dow Jones Newswires in a recent interview.

The company had reported $269.1 million in revenue in the last fiscal year ended March 31.

The company is looking for acquisitions to expand its infrastructure management and package application businesses, Mr. Natarajan said. MindTree's last major acquisition was in 2008, when it bought product-related testing services firm Aztecsoft for $90 million.

Bangalore-based MindTree specializes in providing services to the manufacturing, banking and financial services sectors. Like its peers, it is slowly recovering from the effects of the global economic slowdown as technology spending makes a modest return in developed nations.

JP Morgan Asset Management Extends Outsourced Services Contract With HCL

To provide continuity and certainty around life and pensions administration for Save & Prosper
HCL IBS, part of HCL Technologies (HCL), has extended its contract with JP Morgan Asset Management to deliver life and pension administration services for Save & Prosper, the global asset management arm of JP Morgan Chase & Co.
JP Morgan has claimed that the contract extension will reduce cost and deliver service enhancements to improve the policyholder experience. HCL will continue to provide an end-to-end service solution to enhance policy administration, finance, actuarial and call center services. The new contract services 185,000 policies and provides additional costs savings to JP Morgan Asset Management over the contract's lifetime in the order of GBP 8.5mn.
Peter Ball, CEO of Save & Prosper, said: "JP Morgan Asset Management has long enjoyed a strong relationship with HCL and we are happy that our partnership has been extended. I am confident that HCL will continue to provide great service and value to our policyholders."
Stephen White, COO of HCL IBS said: "We are delighted that JP Morgan Asset Management has reconfirmed the value it places in our partnership through this contract extension. We look forward to adding further value through the introduction of wider HCL service capabilities to help the company achieve its business needs. HCL's governance model means that strategic needs are given as much focus as operational delivery. Our platform has the capability to deliver cost certainty and provide those benefits on long term contracts.
"We have developed a growing onshore/offshore business model, which will enable further capability developments and efficiency improvements. We are keen to grow our Life and Pensions business, in both the open and closed book space, and this announcement demonstrates we provide a compelling and competitive proposition in this market."
David Mitchell, SVP of IT research at analyst firm Ovum, said: "Outsourcing of specific business functions or business areas is most effective when the outsourcing provider has domain specific capabilities. The recent life and pensions administration contract with HCL for Save & Prosper with JP Morgan is based on the HCL industry specific expertise in this sector, offering JP Morgan an enhanced service for their customers and staff while still being very cost effective."
HCL Technologies offers integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO.

Satyam, slowdowns make 2009 hard for software industry

PTI

NEW DELHI: The Satyam Computer accounting scam, slowdown and resultant hiring freeze by many made 2009 a forgettable year for the Indian Information Technology industry.

There was never a dull moment for bad news during the year, given the fact that Satyam's founder B Ramalinga Raju came out of the closet with an accounting fraud on January 7. The scam tarnished the credibility of India's IT story, requiring others to do a lot of convincing to retain clients.

As dramatic it was, the World Bank, within a week of the Satyam scam coming to light, announced it had banned, besides Satyam, Wipro and Megasoft from working for it for allegedly "providing improper benefits to the Bank staff" during the course of their projects with it. While the cases dated back to mid-2007, the timing of the disclosures only helped compound the woes of the IT industry.

To give the government its due credit, it acted swiftly by superseding the Satyam Board, which brought in new auditors to restate accounts, and ascertained employee count and within months found a new owner in Tech Mahindra. Satyam has since been renamed Mahindra Satyam.

Multiple agencies probed the scam, whose size was initially estimated at Rs 7,800 crore, and Raju, once a celebrated IT icon, is in custody awaiting trial.

GlaxoSmithKline and HCL in IT outsourcing deal

Healthcare company GlaxoSmithKline (GSK) has signed a five-year outsourcing agreement with HCL Technology division HCL Axon.

Under the agreement, Indian based outsourcer, HCL will provide GSK with systems integration, SAP implementation and IT consulting services for the international company.

The appointment comes a year after Indian-based HCL Technologies’ acquisition of UK based Axon.

“This is an important win for us, it keeps our objective of becoming the largest global SAP-based business transformation provider on track and confirms the rationale behind the merger with HCL technology.” said Mr Steve Cardell, President, HCL Axon

Infosys Opens Development Centre in Brazil

Infosys Technologies has opened its wholly owned Brazilian subsidiary - Infosys Tecnologia Do Brasil Ltda. The first development centre of this subsidiary is in Belo Horizonte, the third largest metropolitan area in Brazil after Rio de Janeiro and Sao Paulo, with a mature Information Technology (IT) services and Business Process Outsourcing (BPO) ecosystem and an established talent pipeline.

This new centre will offer Infosys' complete suite of services to Infosys' Brazilian clients and Brazilian subsidiaries of global customers.
Infosys has been present in the Latin American market since the creation of the company's Mexican subsidiary - Infosys Technologies S. De R.L. De CV, in 2007. The center in Belo Horizonte is Infosys' third development center in Latin America following the recent opening of Infosys' second center in Monterrey, Mexico.

The company has been investing and strengthening its position in Latin America to expand its footprint in the region and also to leverage the near shore advantage of similar time zones for global clients. The two development centers in Mexico service 32 clients and employ 357 professionals.

CEO and MD of Infosys, S Gopalakrishnan said, "Brazil is the largest IT and BPO services market in Latin America, with the eighth highest IT and BPO services spend in the world. The growth forecasts for the IT-BPO sector in Brazil have remained high despite the global economic crisis. Along with our centres in Mexico, our presence here will strengthen our ability to address both Spanish and Portuguese speaking markets in Latin America, driving our business growth in the region."

Infosys has appointed Puneet Gill as the head of this development centre. Gill has been with Infosys since 2003 and headed BPO operations in Mexico earlier.

Dheeshjith V G, head of new markets and services, Infosys said, "We are fully committed to Brazil and will be leveraging our presence there to offer our full range of IT Consulting, IT services and BPO for our global and Brazilian clients across all industries including banking, financial services, insurance, manufacturing, retail, distribution, telecom, energy, resources and other industries."

'BFSI is the next big thing in domestic outsourcing' - IBM India

BANGALORE: TEN years ago, the world’s biggest IT company then, IBM, did the unthinkable: it struck a deal with a company in India (Cadbury ) to take care of its IT needs. It was one of the country’s first domestic IT outsourcing deals. The rest, as they say, is history. More than a dozen such deals later — including the game-changing contract with Bharti Airtel — IBM is the king of the hill in domestic IT outsourcing. Recently,ET NOW’s R Sridharan caught up with Shanker Annaswamy, regional general manager of IBM India & South Asia, to talk about Big Blue’s journey so far and the road ahead. Excerpts from the exclusive interview:

Shanker, it’s been 10 years since IBM bagged its first outsourcing contract in India . It’s been a long journey. How do you look back on it?

1999 was indeed when we signed the first contract, but 2004 marked the biggest turning point for us — the outsourcing deal with Bharti. It was $750-million contract, and 2006 followed with Idea cellular and Vodafone. I think, we’ve done wonderfully well.

If you look at the last year and a half, every Indian IT vendor has been hit by the global downturn, especially in the financial services market. How has IBM in India coped with the downturn?

Given the global market conditions and the fact that large deals were not happening, we were looking at our successes here, and asking ourselves how we can replicate the successes beyond the telecom industry. I am very happy to share with you that we looked at customers beyond telecom, to customers like Amul and media companies like Sun TV.

You have a lot of Indian vendors now competing for domestic outsourcing deals. Wipro, for example, recently bagged the Aircel deal, which IBM was pitching for as well. How do you see the competition from India vendors?

It took some time for other competitors to look at, understand the model and then go and win one or two accounts. But if you look at the real strategy behind it, it’s not simple IT consolidation. It is your capability to bring in tools and asset-based services than labourbased services, and bring research to play.

You also have HP and Dell, which were traditionally hardware firms, getting into services. Are they a bigger threat?

Industry domain knowledge and capabilities are not built overnight. The differentiator for us is very clearly our integration: consulting and system and technology business like the mainframes and big computers, then the software business, which is an integrating business, then we have services end-to-end . Our ability to take a certain portion of the customer business and turn it into a profitable proposition for them is very big and it will take competition time to catch up.

But what are the other sectors apart from telecom and manufacturing that will open up to outsourcing within India?

BFSI area would be a potential opportunity for us to look at. Public sector will take time. Healthcare could be a huge opportunity, but it may take some time as well.

IBM doesn’t disclose its India headcount, but as I understand it’s 90,000 or even one lakh. How does this number split up?

Actually, we are 73,000-plus employees and we are growing. The large proportion of the employee population is in global delivery missions , including the global delivery and then the IBM Daksh BPO outsourcing processes. The rest of the business will be then the domestic business, research labs, software labs and other groups.

At what point would IBM want to de-risk its India strategy or do you think that’s not a concern?

There is no timeline by which we go. This base of 73,000 was built not on a certain number to be achieved or cut off, it depends on our customers, our clients, their projects, and their core competence and domain expertise that comes in. So, India continues to be a key component of this and I would expect it to grow.

Finally, before the global economy slipped into recession, there was a lot of talk about how India had become an expensive place for IT outsourcing. Is India still competitive?

I think so. We will continue to be so. Because India has a unique advantage of being a pioneer here and also it has a large skill base, and the track record. But we have to be careful not to sit on these successes but continue to train and skill our future workforce.

The next biggest worry for Mahindra Satyam is staff exodus

BANGALORE | HYDERABAD: O R N Suresh, the 33-year-old manager working on a British Petroleum (BP) project at Mahindra Satyam, the decision not to take up job offers from rival Indian firms has not really been a smart move. It was quite risky, to say the least, to continue working in a company which was witnessing a few contracts move to rival IT companies. Infact, after BP decided to shift projects from his company to TCS and Wipro earlier this year, things were not the same at Mahindra Satyam.

“We never had any issues with the delivery of projects, and even though I had an offer to serve at Wipro for another oil firm some eight months ago, I thought Satyam offered better job satisfaction,” says Suresh.

As Mahindra Satyam tries its best to regain the faith of customers, employees and investors, the company faces a daunting task. While the global recession ensured that voluntary attrition remained abysmally low, the improving business environment will soon witness rivals wooing the talent which is available. And they are sure to poach in on the highly skilled hands who are willing to jump the fence at Mahindra Satyam.

Some 400 professionals who are at present working for BP at Satyam will soon become redundant after BP completely shifts the projects to rival TCS and Wipro over the next few months.

Apart from customer attrition, many Satyam employees are also realising that the new management’s relentless focus on pruning the costs means far less job security than nine months ago.

“The Rajus were extremely good at dealing with people, whereas the Mahindras have created a lot of discomfiture in the organisation by driving away our senior leadership and imposing their decisions on us. This makes us feel like outsiders. But for the fraud, an average Satyamite will still prefer Raju to the Mahindras as an employer,” said a senior employee who is currently working for banking and financial services customers at Mahindra Satyam.
The Satyam scam doesn’t seem to have dented the image of B Ramalinga Raju, especially among the employees, who still repose a lot of faith in him and the previous management.

A worsening global economic crisis ensured that there were no jobs available for those seeking better options in the market. For hundreds of Satyam employees who were on the bench, the new cost-cutting strategies and tactics were not really very employee-friendly.

“You cannot really blame the new management - even Wipro was forced to lay off many of it employees during the recession,” said another employee who is currently working at the company’s back office division. However, many of the employees feel that the new management is not able to show empathy to the present employees the way the old Satyam management used to.

Perhaps it is this disconnect between the employees and the management which will work in favour of other IT companies who are eagerly waiting to recruit skilled hands willing to jump the boat. “We always thought Satyam was an over democratic company. It was a friendly company where even those on the bench was treated royally. Tech Mahindra has adopted a hire-and-fire policy and the employee satisfaction levels are very low,” said an associate with the Citigroup project.

Meanwhile, one of the biggest worries which Mahindra Satyam has to face is its fading popularity as an employer. And, whenever business picks up, the company may lose out to rival companies in acquiring new talent given the image it has conjured up in the market.

“I will never recommend anybody to join Satyam. Firstly, from a $2 billion company, it has been reduced to a mid-sized IT player. Secondly, the new management is yet to visualise and comprehend the scale of Satyam’s operations, employee and customer expectations. It’s like a cafe owner buying Taj Krishna. Moreover, with no big projects on the cards, I do not think anybody should risk their career by taking up a job there,” said a Merrill Lynch project head.

Large multinational technology firms such as Accenture and IBM, apart from domestic rivals have already started their recruiting campaigns. “The management’s toughest challenge now is to retain the workforce they have. With Accenture and IBM conducting walk-in interviews every Saturday, more than a quarter of Satyam’s associates’ resumes are circulating in these offices,” said a Mahindra Satyam employee working for an insurance customer.

IBM Launches Cloud Computing Lab

IBM said Thursday that it opened a research lab in Hong Kong dedicated to developing products and services for the cloud computing market. At the outset, the lab will dedicate resources to supporting IBM's online LotusLive offering.

IBM currently counts more than 18 million users of LotusLive, which offers Web-based access to e-mail, instant messaging, calendaring, and other collaboration tools. The service starts at $3.00 per month, per user.

IBM said the Hong Kong center will research and develop best practices around various issues related to cloud computing, including security, privacy, and reliability. The lab is co-located with IBM's existing China Development Laboratory, which employs more than 5,000 developers.

"As the first cloud computing laboratory in Hong Kong to serve as a global resource for cloud-based collaboration services, the laboratory marks a milestone for IBM and for the information technology industry in Hong Kong," said Dominic Tong, IBM's general manager for Hong Kong/China, in a statement.

"The opening of the laboratory demonstrates Hong Kong's advantage as a global hub for world-class information technology and online services and we are delighted that it aligns with the government's agenda of developing Hong Kong into a center of excellence in innovation and technology," said Tong.

Attendees at an event marking the lab's opening included Hong Kong Financial Secretary John Tsang, Commerce and Economic Development Secretary Duncan Warren Prescod, and IT Legislative Councilor Samson Tam.

IBM estimates the market for cloud, or hosted, computing products is growing 28% annually, and will increase from $47 billion in 2008 to $126 billion in 2012.

Mindtree Meets With Corporate Information Systems

Started in 1999, Mindtree is a global IT solutions company, with just under 8,000 employees in 20 countries. As a practice, the company gathers its best minds every year in Bangalore to participate in the company's annual planning exercise. With the slowdown, that seemed like a luxury.

Highlights

-- The corporate information systems (CIS) team included video, IM, and presentation sharing capabilities.

-- The initiative, which cost Rs 14.25 lakh (US$30,360) saved the company just under a crore.

"The unprecedented turmoil required MindTree to scrutinize every expenditure item," recalls Sudhir K. Reddy, CIO, MindTree. "One day, I received a call from our chief strategy officer asking me if there was anyway to minimize travel for the annual plan meeting using technology."

Reddy examined telepresence-on-rent and HD video conferencing. But given the size of the meeting - 120 people from up to 14 cities around the world - and the duration of the meeting - six full days - Reddy and his team quickly zeroed in on video collaboration.

The solution Reddy and the corporate information systems (CIS) team deployed included video, IM, and presentation sharing capabilities. An audio bridge was kept as back up.

Reddy's team then evaluated the voice and video quality over different conditions. An optimal configuration was demonstrated to two top management representatives and when they got the go-ahead, the team asked for the meeting's timetable. The list of participants was broken down into those from the local MindTree campus and those from elsewhere. Cameras were shipped to all participants at remote locations. Test conferences were scheduled by CIS teams in all time-zones.

"We had carefully reserved about 384 kbps per external participant and all conference rooms (about 15Mbps in total) to ensure that the video did not freeze or break-up," says Reddy.

But the solution wasn't all technology. The senior management team, which was not used to conducting such important meetings over video conferencing let alone desktop video conferencing, needed convincing. To ensure the technology did not let them down, 10 CIS members babysat the meetings. "If we had to attribute our success to one factor, it would be the meticulous planning and orchestration of the event by the CIS team," says Reddy.

The initiative, which cost Rs 14.25 lakh saved the company just under a crore.

Infosys to make China biggest development centre outside India

LOOKING EAST.

Mr Kris Gopalakrishnan

K. Giriprakash

Swetha Kannan

Bangalore, Dec. 11

In a far-reaching move, IT bellwether Infosys Technologies has decided to make China its biggest development centre outside India.

“China will be our biggest development centre outside India while the US will be the largest market in terms of revenues and India will remain the largest in terms of physical presence,” the Infosys Technologies Chief Executive Officer and Managing Director, Mr Kris Gopalakrishnan, told Business Line.

For the quarter ended September 30, 2009, 9.7 per cent of Infosys' revenue was generated from the rest of the world which includes all regions except North America, Europe and India. North America contributed to 65.9 per cent, Europe 23.2 per cent, and India 1.2 per cent. Infosys does not give country-wise break up of revenues.

As Infosys takes a big leap forward into the next decade, it wants to deepen its geographical presence, said Mr Gopalakrishnan. One of the major reasons for developing the China centre was because of the huge potential it sees there and also the quality of talent pool available there.

Currently, Infosys has two development centres in China: Shanghai and Hangzhou, with a total of 1,258 people working there. The centre delivers BPO and IT services to clients in the US, Europe and Asia. Mr Gopalakrishnan said that the company is also working closely with the Chinese Government to tap and subsequently nurture the IT talent pool there.

“Our China Development Centre has grown in the last one year... We have been expanding our delivery capability in horizontal services such as enterprise solutions, independent validation services, and product engineering as well as investing in contextualising our banking solution product, Finacle, for the Chinese market,” he said.

He added, Infosys will also continue to invest and expand in markets other than China such as Poland and other European countries and Mexico, the Philippines and Brazil, because of the advantage they offer in terms of round-the-clock support to local language support.

Global consultancy firm, KPMG's Executive Director and Head of IT advisory, Mr Kumar Parakala, told Business Linethat Infosys' move showed its visionary strategy for its company. "By 2020, it is expected that China will have the largest English-speaking population in the whole world. Hence, China will have the talent pool needed to support the IT sector," he said.

He said more and more IT multinationals are using the global delivery model for their businesses with presence in all the right places including China. "Therefore, Indian MNCs can get significantly disadvantaged if they do not have a presence in China," he pointed out. He said if Indian companies start setting up their centres in China, firms in China will do the same leading to both the countries leveraging each other's strengths.

Wipro, Microsoft, Intel, Infosys get maximum H-1B visas in 2009

By Moira Herbst
Even as job losses in the US mount, employers have stepped up the hiring of skilled workers from abroad, according to data from the US Citizenship & Immigration Services. The acceleration in recent weeks has put companies close to exhausting the 65,000 visas allotted each year for foreign hires under what's known as the H-1B program. Some 61,500 visas had been used as of Dec. 8, and the last visas are likely to be claimed within weeks. Once that happens, companies won't be able to use the program to bring in additional workers until October, the start of the government's fiscal year.

"The numbers are surprising, considering the state of the economy," says Ron Hira, associate professor of public policy at Rochester Institute of Technology. "With 15.4 million people unemployed in the U.S., employers should be able to find qualified workers here." The H-1B program allows employers to sponsor skilled workers from overseas for up to three years, with the possibility of extending for additional years.

DECLINING NUMBERS

The mix of companies receiving work visas is changing in ways that could dull at least some criticism of the program. In past years outsourcing companies, including many based in India, have received a substantial chunk of the visas. That's led opponents to charge that the program was being used to send American jobs abroad, since many H-1B employees train at client sites in the U.S. and then rotate back to their home countries to handle similar tasks. But the number of visas received by many non-U.S. outsourcers is declining. Of the top 200 recipients of H-1B visas in fiscal 2009, ended in September, offshore outsourcers got about 22%, or 5,663, down from 38% in fiscal 2008.


Non-U.S. outsourcers still claimed 6 of the top 10 places in fiscal 2009, although the numbers were off for the largest operators. India's Infosys Technologies (INFY) topped the list in fiscal 2008, with 4,559 visas, but last year got only 440. Wipro (WIT) was the largest visa recipient in 2009, with 1,964, down from 2,678 in 2008. Sridhar Ramasubbu, Wipro's chief financial officer for international operations, says the drop is the result of lower demand caused by the recession and changes in the company's workforce. "We're now operating in 58 countries," he says.

U.S. companies have become more active in the program. Of the top 200 recipients in 2009, American businesses accounted for 49% of the visas, up from 43% in 2008. Microsoft (MSFT) was No. 2 on the list with 1,318 approvals, while Intel (INTC) ranked No. 3 with 723. The chip giant says it's using the visas to recruit for high-skill posts in software and component design. "We only use visas for job categories with a [domestic] skills shortage," says spokeswoman Lisa Malloy.

With the Obama Administration struggling to create jobs, politicians are debating whether the visa program needs fundamental change. On Nov. 19, Senators Bernie Sanders (I-Vt.) and Charles Grassley (R-Iowa) introduced a bill to bar major companies that lay off U.S. workers from hiring foreign labor through H-1B and other programs. The legislation, which faces significant hurdles, would apply to companies that have cut 50 or more employees within the past year. "We have a responsibility to ensure that companies do not use the temporary guest-worker program to replace American workers with cheaper labor from overseas," says Sanders.

Herbst is a reporter for BusinessWeek.

Infosys likely to offer 13,000 jobs on campuses

BANGALORE: Infosys Technologies, the country’s second largest IT services exporter, is likely to make 13,000 campus offers to fresh engineering graduates who are expected to join during the course of fiscal 2011.

Interacting with mediapersons here on Wednesday, Nandita Gurjar, senior VP, Infosys said that they have already started going to campuses in about 700 engineering colleges. Infosys had made 20,000 offers to engineering graduates for the 2009 fiscal, though only around 75-80 % of the students actually join the company.

The Indian IT services industry has discontinued the earlier practice of selecting the students a year before they complete their graduation and is now visiting colleges in the final semester itself. According to the Infosys official, they would be closing the 2009 fiscal with around 18,000 freshers and 3,500 experienced hires and it is expected that the same hiring numbers is likely for the coming fiscal.

The compensation package for the students coming into Infosys from the next fiscal will be same as last year.
The campus offers for the Indian IT industry had run into certain rough weather during the FY09 with certain companies delaying the entry of these students and in some cases putting them on a different stream of work.

Vineet Nayyar is Satyam’s chief

HYDERABAD: Mahindra Satyam has announced the appointment of Vineet Nayyar as the company’s chairman. Nayyar was so far heading the company as vice-chairman.

Announcing this after the company’s board meeting, a Mahindra Satyam statement also said that the company had appointed former Sebi chairman M Damodaran and Gautam Kaji as additional directors with immediate effect, expanding its board to eight members.

Meanwhile, the company said it had appointed Deloitte Haskins & Sells as the company’s statutory auditor for fiscal year ended March 31, 2009 as well as fiscal year ended March 31, 2010. Deloitte Haskins & Sells, one of the two audit firms roped in by the postscam Satyam Board to restate accounts, will vet the accounts of Mahindra group company for the 2008-09 and 2009-10 fiscals as statutory auditor.

The company, which was acquired by Tech Mahindra in April, has secured time until June 2010 from the Company Law Board to file financials, including quarterly results.

Satyam employees fooled to work on fake projects

Hyderabad: Satyam ex-chairman Ramalinga Raju's fraud game did not spare even its employees. While it inflated revenue through fake invoices, the company created teams to work on the fake projects. The employees working on these 'projects' were made to believe there were clients waiting for these products to be delivered.

According to the finds of the Central Bureau of Investigations (CBI), the employees were also regularly sent emails about the product and project progress as if they were all coming from the clients abroad. But the emails were fake and were used only to keep the employees engaged, reports DNA.

The fraudulent chairman along with the finance in-charges and the core team created at least seven projects, showing that clients were waiting for these products to be delivered. There was regular exchange of mails from the management to the employees to give an impression of the keen interest of management in execution of these projects.

The investigation also found the invoices do not match with the ledgers of banks with which Satyam had transacted in the U.S. "However, the ledgers maintained by Satyam were dishonestly and fraudulently forged pertaining to these seven customers to incorporate the collections pertaining to all the 63 invoices," the CBI said in its latest chargesheet.

What has caught the investigators by surprise is the way the emails to employees for monitoring the progress of the fake projects were generated. The CBI found that they were all generated from Hyderabad. "Detailed analysis of the emails revealed that the internet protocol addresses from which the emails were sent at the relevant time and date were all from within Hyderabad itself, which clearly shows that such emails have never emanated from these seven foreign customers. Further, it was also established that these emails were relayed by the Rediffmail server which has got a paid service facility called Domain Services, which facilitates its clients to create email IDs at their own domain names.

In this case, it was found that the payments for the said services were made through Bank of Baroda Visa credit card which belongs to D Venkatapathy Raju (one of the accused)," the chargesheet said. These email IDs were freely used by the core team working on fabricating the accounts to give sanctity to the fake projects. "For the purpose of executing the projects, which were never delivered to the customers, the accused have wasted thousands of man hours of the associates of Satyam there by incurring a wasteful expenditure to the tune of Rs65.88 crore towards the salaries of the associates and other overheads," the CBI said.

HCL Tech bags 5-year order from News Corp's UK arm

Our Bureau

New Delhi, Dec 8

HCL Technologies on Tuesday announced it has bagged a multi-million pound, five-year infrastructure management and transformation order from News International - a U.K. subsidiary of News Corporation.

The company produces some of the U.K.'s most widely read newspapers including The Times, The Sun and The Sunday Times. HCL Technologies will manage News International's data centre and network environment. Initially, it will involve transformation projects such as migrating operating systems to lower-cost industry standard solutions, business continuity improvements and virtualisation, consolidation and standardisation of storage and servers.

The Indian company is already working with other News Corporation companies for their technology infrastructure management requirements, a statement said.

“We see the benefit of working with the same global partners across News Corp,” said Mr Andrew Hickey, CIO of News International and a member of News Corp's CIO Council.

HCL Technologies clientele includes over 40 media and entertainment companies globally.The company had recently announced wins from Reader's Digest Association and Viacom Inc.

IT Clients Look Beyond India

BANGALORE: IT buyers are expanding their global sourcing networks as part of an effort to reduce their dependence on a few large locations such as India, says a new report by Everest Research Institute.

Recent events impacting offshore locations, such as terror attacks and typhoons, and suppliers (such as bankruptcies , frauds) have underscored the need for holistic risk management in global sourcing, the report says.

“Traditionally, global sourcing risk management approaches remained largely focused on engagement-level performance management. However, a more sophisticated approach to risk management compels buyers to understand risk from the entire sourcing ecosystem spanning each individual supplier and delivery location as well as the collective portfolio of suppliers and locations,’’ says the report.

The institute also says that another new global sourcing paradigm is emerging and generating additional push for creating a global delivery network.

“This new paradigm is associated with a more robust and complex demand profile that mandates a global delivery network and is creating further impetus for expanding the delivery footprint beyond the traditionally favoured offshore destination, India,” Everest says. A combination of these two factors is creating a demand for global locations that support technology and business process delivery. Clients now have a number of credible offshore destinations to choose from.

The report identifies these areas as Brazil, Central and Eastern Europe, Israel, Mexico, the Philippines and South Africa. These markets represent a blend of locations that are either superior skill markets or large talent markets that global sourcing buyers can’t ignore.

“The supplier landscape in these emerging markets includes a mix of global majors, India-centric suppliers expanding their delivery footprint, and domestic/regional suppliers that have roots in the emerging market. A handful of suppliers in this new category have acquired meaningful operating scale and, through investments in delivery capabilities and adopting industry best practices, successfully serve Global 1000 corporations,” the report says.

Renault Outsources To Capgemini

Renault will outsource application management to Capgemini under a three-year deal that sees Capgemini become one of the French automaker's preferred outsourcing vendors.

Capgemini, of Paris, will work to manage and optimize one quarter of Renault Group's application portfolio, the outsourcer said.

More than 180 Capgemini professionals will be tasked with the effort, which includes technical and functional updates, technical support, and applications development for Renault's procurement, quality, and sales units.

Renault officials said Capgemini's familiarity with the automotive industry factored into their decision to hire the company. Additionally, Capgemini's Sogeti subsidiary has worked previously with Renault.

"To meet the constantly evolving needs of users, a good knowledge of their industry is essential," said Renault deputy CIO Francois Gitton, in a statement.

"This enables good alignment between the service provided, current projects and priorities. Capgemini has the functional and industry capabilities required, as well as a great capacity for innovation drawn from its experience with other car manufacturers," said Gitton.

"These factors create favorable conditions to meet the needs of Renault," he said.

For their part, Capgemini officials said the deal is a chance to forge deeper ties with France's largest automaker.

"This contract is a great opportunity to build a strong partnership with Renault. Our commitment can be seen in both the length of the project and in our ambition to assist the group in its future challenges," said Alain Donzeaud, a member of the Capgemini Group's executive committee.

Capgemini shares were up .10% in Monday trading on the Euronext Paris exchange.

Infosys Employee Ridiculed For Celebrating Christmas and Thanksgiving

There is a school of thought that maintains that non-Western peoples are simply not capable of sustaining—or assimilating to—the civilization of the West, that “East is East and West is West,” as Kipling put it, and never the twain shall meet.
Sam Francis, 2002

Francis correctly portrayed Kipling’s realism about multiculturalism but nobody can say that Promila Awasthi, an India-born American citizen, didn’t try to beat the odds to assimilate into our culture. Awatshi wanted to celebrate Thanksgiving and Christmas but was hassled by her bosses at the Indian owned bodyshop Infosys. Awashti’s bosses at the Freemont, California branch of Infosys were Indian nationals who routinely ridiculed her and her family for wanting to take part in those great American traditions.

The NBC Bay Area website gave the following account of the story:

Infosys management routinely disparaged Americans, including Mrs. Awasthi, as not having “family values,” and stated that layoffs in America are good because the jobs will be outsourced.

Infosys management ridiculed Mrs. Awasthi for celebrating the American holiday of Thanksgiving, telling her that she should not celebrate Thanksgiving because she is Indian, and that therefore she must work on Thanksgiving Day.

Infosys management ridiculed Mrs. Awasthi’s children for celebrating Thanksgiving, and called them “ABCD” short for “American-Born Confused Desi,” and “IBCD” short for “Indian-Born Confused Desi,” insulting terms used to criticize people of Indian ancestry who are Americanized.

Infosys management ridiculed Mrs. Awasthi for celebrating Christmas, saying that “we” do not celebrate Christmas, and that she should not celebrate Christmas. Infosys management repeatedly discussed the quality of Mrs. Awasthi’s work by explicitly commenting on their expectations for “a woman your age.”

The India Herald revealed more details of the story:

The complaint alleges that while working at Infosys, Mrs. Awasthi was routinely harassed by Infosys management, nationals of India, on the basis of her being an American of Indian ancestry and national origin, and on the basis of her age and gender. For example, the complaint alleges that:

· Infosys management ridiculed Mrs. Awasthi for celebrating Thanksgiving, telling her that she should not celebrate Thanksgiving because she is Indian, and that therefore she must work on Thanksgiving Day.

· Infosys management ridiculed Mrs. Awasthi’s children for celebrating Thanksgiving, and called them “ABCD,” short for “American-Born Confused Desi,” and “IBCD,” short for “Indian-Born Confused Desi,” insulting terms used to criticize people of Indian ancestry who are Americanized.

Awasthi is fighting for her right to be a fully assimilated American — and to get paid overtime if she is forced to work on those holidays, as required by California state law. On Novermber 23 Awasthi filed a lawsuit in Alameda County Superior Court against Infosys.

Infosys, Cognizant and UST Global amongst those shortlisted by Wal-mart

MUMBAI, Dec 4 (Reuters) - Wal-Mart Stores Inc (WMT.N), the world's largest retailer, has picked three IT vendors including India's Infosys Technologies (INFY.BO) for multi-year contracts worth over $600 million, the Business Standard said.

The other vendors are Cognizant Solutions (CTSH.O) and UST Global, the newspaper said, citing an unidentified source close to the development.

Initially the three vendors are expected to earn 2.5 billion to 3 billion rupees ($54 million-$65 million) each annually, which will rise as Wal-Mart increases outsourcing more work.

Infosys and Cognizant, which will provide application development and support, are expected to get a larger share of the contract, the paper said.

UST will be responsible for testing these applications, it said.

"What is more important is that these three vendors have now got a ticket to be in the club of Wal-Mart's list of preferred vendors which will help them in growing this account in the long run," the paper quoted the source as saying.

"We do not comment on market speculation," a spokeswoman for Infosys told Reuters.

Wal-Mart's media relations director, John Simley, said in am emailed reply to the paper: "We have a large and growing business and productive relationship with many Indian companies. We do not comment on speculations about the nature of any business relationship."

Mahindra Satyam won a outsourcing contract from Airbus

BANGALORE: Mahindra Satyam has won a Rs 100-crore ($20 million) outsourcing contract from the world's largest maker of commerical aircraft,Airbus, to manage its internal quality and processes.

Sources said the three-year contract involving technology maintenance, will put Satyam at a vantage point as they can now have an overview of the projects and technology which controls the organisation.

"The work outsourced mainly includes quality management of work flow and tells how you need to do your work" said a person familiar with the matter.

An email query to Mahindra Satyam and Airbus remained unanswered at the time of this report going to press. This is the second important contract Mahindra Satyam has bagged in the last few months. It had won an IT outsourcing contract last month from Swedish defence and aerospace firm, Saab, to develop its operations for the global defence and security market in India in a deal valued at around $300 million.


The five-year contract, includes providing tech support for engineering services and maintenance. This will enable both the companies jointly address the Battlefield Management System (BMS) for the Indian Army.

Mahindra Satyam said it has initiated the task of setting up a centre of excellence for network centric warfare (CoE NCW). The centre will be used for mission critical applications such as command, control, communications, computers, intelligence solutions and homeland security.

Experts like Chethan Kambi, senior research analyst for aerospace and defence practices at Frost & Sullivan, says that projects like the one outsourced by Airbus includes a gamut of IT operations ranging from human resources management, exchange of work to even sending emails.

"Aircraft makers have to exchange information across their multiple offices across the world through highly-effective IT networks", he said.

Experts said such kind of work also deals with testing and development of software, which ultimately goes on the aircraft. "This kind of work outsourced to Indian IT companies brings 15-18% efficiency", an expert said.

Mahindra Satyam counts Cisco, Nissan, GE, Citigroup and GlaxoSmithKline, as its top five clients. Over the last four months, the company gained 32 new customers.

Infosys to Nearly Double Work Force in U.S. Market

BANGALORE, India—Infosys Technologies Ltd. plans to nearly double its work force in the U.S. and remains on the lookout for acquisition targets in Germany, France and Japan, its chief executive said.

India's second-largest software exporter by revenue after Tata Consultancy Services Ltd. is planning to hire 1,000 employees in the U.S., Chief Executive S. Gopalakrishnan said in an interview.

The company, which had 1,200 U.S. employees as of March 31, had said in April it would hire more staff there. As of Sept. 30, it had a total of 105,453 employees.

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Agence France-Presse/Getty Images

Infosys CEO S. Gopalakrishnan, pictured in April, said the company plans to increase its work force in the U.S.

Infosys gets about 66% of its revenue from the U.S. market. The company joins other Indian software exporters in gradually stepping up hiring to prepare for an expected increase in outsourcing deals as technology spending makes a modest comeback in developed nations.

The company has been trying to reduce its U.S. exposure by increasing its operations in Europe and Asia, which account for about 23% and 10% of its revenue, respectively.

"Ordinarily we look at a company of 10% of our size" for acquisition, Mr. Gopalakrishnan said, adding that a prospective target would have $300 million to $500 million in annual revenue.

He didn't provide details on the business segments it is targeting for acquisitions. Mr. Gopalakrishnan had previously said the company was looking to acquire firms offering services to the health care and utilities sectors to boost its consulting and outsourcing businesses.

Mr. Gopalakrishnan said Infosys's revenue growth in the next fiscal year, starting April 1, will be driven by new outsourcing contracts. But for this fiscal year, "we are looking at almost zero-percent growth," he added.

In October, the company had forecast $4.60 billion to $4.62 billion of revenue for the current fiscal year, down 1% to 1.3% from a year earlier.

Top offshorers seek on-demand apps

BANGALORE: Top outsourcing customers, such as Nokia Siemens Networks, Royal Philips Electronics and ABB are askin g service providers, including Wipro, Infosys and IBM, to deliver complex business applications as an on-demand service in order to bring down their capital expenditure on information technology by up to 40%.

By asking vendors to manage, host and deliver a software application, such as enterprise resource planning (ERP), these customers are able to avoid large, complex outsourcing contracts and instead pay suppliers on the basis of number of transactions.

Popular business application packages, including customer relationship management (CRM) and ERP, are increasingly being adopted under software-as-a-service (SaaS) model by the customers. According to research firm Gartner, SaaS-based CRM was worth $1.8 billion in revenues, almost 18% of $9.4-billion global market for CRM software.

For Indian IT firms, such as TCS, Infosys, Wipro and HCL, this offers a new opportunity to enhance proximity with the customers and also move away from traditional model of outsourcing, wherein they had dedicated offshore development centres for each customer.

“By offering services under our Flex model, we are able to bring down costs by up to 30%,” said Sangita Singh, senior vice-president and head of Wipro’s enterprise application services business. Wipro’s FlexDelivery model offers ERP software from SAP to customers such as Nokia Siemens.

At least two outsourcing consultants told ET on conditions of anonymity that around 10-12 ERP and CRM outsourcing contracts, each worth $50-100 million, are being discussed by customers, including steel maker ArcelorMittal, Philips and ABB.

“We, currently, have around 15% of application revenues coming from the Flex model, it can surely contribute around half of our total enterprise applications business,” she added. Wipro is moving some of its top customers who already have dedicated offshore centres to this model. Mr Singh declined to name the customers currently exploring this model.

Indeed, as more customers seek to reduce cost and move away from traditional time and material-based pricing models, Indian vendors will have to prepare for more such engagements. Delivering traditional application maintenance and services in its current form will not really take Indian tech firms too far, experts say.

India’s second-biggest software exporter Infosys is not far behind. The company is already offering Oracle’s PeopleSoft HR management software to two of its customers. “By saving software and hardware costs and with our reusable components, the total cost of ownership can be brought down by 25-30%,” said Ravi Kumar S, Infosys’ vice-president and delivery head for Oracle services.

The country’s biggest software exporter TCS currently offers enterprise services under SaaS model to around 60 small and medium business customers.

“This downturn will force vendors and customers to explore newer models, going forward, we will look at many applications to be delivered under SaaS model,” Maarten J de Vries, IT and supply management, member group management committee, Royal Philips Electronics told ET in a recent interview.

For instance, European service providers, such as T-Systems, with capabilities to bundle enterprise business applications from SAP are already winning more business. Wipro, along with EDS and T-Systems is among SAP services providers currently authorised to deliver such services as part of the Run SAP program.

“During the downturn, this model offers a quick and easy way to save costs, and having noticed that customers were moving towards platform-based services, we realised Run SAP could be a good way to help customers standardise their processes using SAP applications,” said Anja-Christina Bruehling, head of partner management — Active Global Support , SAP. “Apart from selecting a partner, customers are also free to operate RunSAP inhouse,” she added.

Philips will announce a new outsourcing contract with T-Systems, a European service provider, this week, Mr Vries said. “We will also announce SAP as a service as part of this contract,” he added.

Top honchos named in cases against Satyam

HYDERABAD: The former Cabinet Secretary T.R. Prasad, the former Director of IIT-Delhi and Madras, V.S. Raju, and the former Dean of the Indian School of Business (ISB) M. Rammohan Rao, have been named by the Serious Fraud Investigation Office (SFIO) for the first time in the Rs. 11,000-crore fraud in Satyam Computers.

They are among 11 ex-directors and other top managers of the company against whom the SFIO, an arm of the Ministry of Corporate Affairs, has filed seven cases in the special court for economic offences here, under various provisions of the Companies Act, 1956. The court summoned all 11 persons accused in these cases to appear before it on December 11.

The other accused include Vinod K. Dham, known as the father of Pentium; Krishna G. Palepu, a professor of the Harvard Business School; and Mangalam Srinivasan, a U.S.-based academician. All of them were independent directors until they resigned from the board when the fraud came to light.

The former company chairman, B. Ramalinga Raju, and two other ex-bosses, B. Rama Raju and Srinivas Vadlamani, who are in jail facing police cases, were also shown as accused.

Two top mangers who were not brought to book by the police but have now been named by the SFIO are Ram Mynampati and G. Jayaraman. While the former was considered the right hand man of Ramalinga Raju with control over 60 per cent of the company’s business, Jayaraman was the company secretary.

The SFIO filed the case against Ram Mynampati showing him as a resident of the U.S., where he ‘fled’ before the police could lay hold on him. The agency accused him of receiving remuneration much in excess of the payout due to him. The company accounts for 2007-08 showed that Mynampati’s salary package was Rs. 3.5 crore, while all other directors together got only Rs. 2.6 crore in the whole year. Ramalinga Raju collected Rs. 60.4 lakh and the seven non-executive directors Rs. 1.56 crore.

The prosecutors told The-Hindu that the cases were filed against them on various charges, including exaggeration of balance sheets and showing as paid unpaid dividends.

Meanwhile, the Directorate of Enforcement has attached another chunk of immovable properties, mainly agricultural lands, belonging to Ramalinga Raju and his family members, with the adjudicating authority in New Delhi under the Prevention of Money Laundering Act. The purchase consideration of the 25 properties was shown as Rs. 20 crore.

The first chunk of 287 properties with a purchase consideration of Rs. 170 crore and 34 lakh Satyam shares were attached in August.

Wipro to hire 5,000, revamp recruitment strategy

Wipro Technologies said on Wednesday it will hire 5,000 people in the next couple of months and is looking at a fresh recruitment strategy of taking in graduates from non-engineering institutes.

"Our strategy is to recruit non-engineering graduates, in addition to engineering and make them fit into the slot. We are still working out the details," Wipro Technologies joint CEO Girish Paranjpe said.

Refusing to divulge more details for next year's recruitments and outlook, Paranjpe said it would be a mix of 60 per cent freshers and 40 per cent experienced.

About 5,000 will be taken into the company in a month or two, he said. Last year the company made offers to as many as 8,500 persons through recruitment drives in colleges and institutions.

"We expect clients to make no further cuts in their budgets. We expect 2010 to be a better year than 2009," Paranjpe told reporters in Hyderabad on the sidelines of dedicating renovated Manikonda Lake at Hyderabad facility to the community.

He said the new hiring strategies will be worked out in a month or two. Attrition rate in the company stood at 10 per cent.

On becoming energy efficient, he said the company is determined to reduce the carbon emission per employee by 45 per cent from the present 3.96 tonnes to 2.5 tonnes in the next five years.

"Our power consumption went down by 12 per cent last year and we are planning to set up a micro windmill at our Hyderabad facility soon," Paranjpe said.

The company consumes nearly 75 megawatt power from both Government and internal sources.

He said the company's exposure in the Gulf market is around 4 per cent and the Dubai financial crisis will have no impact.