Expressway puts hope on fast lane in Bangalore

Devina Sengupta & Shwetha S / DNA

Bangalore: Hours before the longest elevated expressway to the Electronic City was thrown open to commuters on Friday, TV Mohandas Pai, human resource head of Infosys Technologies, was talking about how the unclogging of the traffic on the Hosur Road would improve the employability for companies housed in the city’s tech hub.
He said his company had lost 15,000-16,000 workers over the last 15 years because of bad connectivity. “We lost them (employees) because they did not want to commute to the Electronic City (because of bad infrastructure).”

The country’s second largest information technology (IT) company has a sprawling campus spread over 50,000 acres in the Electronic City, with over 50,000 people working out of it.

The HR head of country’s the second largest IT firm said the new flyover would cut the time taken to travel from the city to the tech hub by 30 minutes, which would translate into higher productivity and revenue for companies located there.

“It will save at least half an hour of travel time and that means for 100,000 employees of Infosys — 50,000 hours will (collectively) get saved. Electronic City will become the best place to work in India (with the opening up of the flyover). It will also reduce the stress levels and improve performance of the employees,” said Pai.

And it’s not just him, who can’t stop raving about the benefits that would accrue to companies because of the world class infrastructure.

Babu Rangaswamy, director, best shore application services — India Centre, Hewlett-Packard Pvt Ltd, felt that the expressway would improve the work-life balance of employees working from their office in the tech city. “Employees can now leverage their time at work and manage a healthy work-life balance. The elevated road will not only help reduce carbon emissions, but also set the tone of improved infrastructure in the city,” he said.

Wipro’s Joseph John said: “The number of Wipro busses ferrying the employees will get reduced, leading to less carbon emissions. Time gets saved and employee productivity will increase.”

Srikanth Paturi, a regular commuter to the Electronic City, said his travel would now be easier and quicker. “Though I won’t be using the expressway regularly, I can still use it when it’s required or during emergencies,” he told DNA.

He was, however, sceptical on whether the new expressway would completely end the traffic nightmare that the Hosur Road has become.

“The traffic jam problem near the Silk Board junction will persist as all the vehicles will arrive there and get clogged. Though we will be able to reach the Silk Board from Electronic City easily, we may get stuck in a jam after that,” said Paturi.

Techie Anish Ratnam, a resident of Frazer Town, however, said that the expressway would cut the travel time by more than half.
Anand Rao, a software professional with a tech firm in the Electronic City, believed the high toll fee could be dampener. “I feel the toll fixed is quite high. Most of us work only for five days in a week. It’s not worth paying Rs900 per month. We would rather take the alternative routes (than pay the toll)."

'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.

IBM Stays Tops as Server Market Stabilizes, Gartner Says

IBM retained its narrow lead over Hewlett-Packard in the worldwide server market as sales began to stabilize during the third quarter, Gartner said Monday.

IBM took 31.7 percent of server revenue in the three months to Oct. 31, up a fraction from last year, while HP's share stayed more or less flat at 30.2 percent, Gartner said. They were followed at a distance by Dell, Sun Microsystems and Fujitsu.

Server revenue overall dropped 15.5 percent from the third quarter last year, to $10.7 billion. But it was up by 10.2 percent compared to the second quarter this year, Gartner said.

"It is important to put the yearly declines into perspective," Gartner Research Vice President Jeffrey Hewitt said in a statement. The server market is "showing signs of stabilization as we move toward the end of 2009."

All the top vendors bar one saw their server revenue improve from the second quarter. The exception was Sun Microsystems, whose business has been hit by uncertainty surrounding its acquisition by Oracle.

Sun's server revenue was down 32.3 percent from the third quarter last year, much more than its main rivals, according to Gartner. It remained the top seller of Unix systems by volume, but its lead was pared down from a year earlier as shipments declined by almost half.

In terms of dollars spent, HP overtook Sun to become the second-largest Unix vendor behind IBM. HP grew its share of Unix systems revenue from 28 percent to 29.3 percent, while Sun's declined from 29.2 percent to 24.2 percent, Gartner said. IBM's share increased from 36.4 percent to 40.9 percent.

The Unix server market overall was worth $2.6 billion, a drop of 21.2 percent from the third quarter last year.

Industry-standard servers fared a little better. Sales of x86-based systems declined by 11.4 percent from last year, to $6.3 billion. HP retained its dominant lead, followed by Dell, IBM, Fujitsu and NEC.

AIGSS buy, HP ties to keep MphasiS's tempo high

For MphasiS, 2009 has been the year of resurrection. The IT services company, which was struggling to grow not long ago, reported a sharp 44% rise in revenue and a two-fold jump in profit after tax (PAT) during the year ended October 2009. And all of this growth has been on the pure organic front without any acquisitions.

With an annual revenue of Rs 4,283.3 crore and a PAT of Rs 908 crore, the erstwhile mid-tier IT company is fast moving into the top league of Indian IT exporters. It now stands sixth in the IT pecking order.

The turnaround in MphasiS’ fortune during the year has been remarkable when compared with the lower double-digit growth reported by some of its bigger peers in a highly uncertain global economic climate. MphasiS’ stellar performance was largely a result of its association with HP.

HP acquired MphasiS’ parent EDS in May 2008.

Since then, MphasiS has seen a higher growth in its key business segments, including application services (a 43% growth in 2009 revenue) and infrastructure technology outsourcing (ITO) business (an 85% jump). Both these divisions constitute over 90% of total revenue, with the rest coming from BPO operations.

With the HP’s entry, MphasiS has seen a slew of deals coming its way. In the October 2009 quarter, out of 16 new deals that MphasiS bagged, as many as 13 were from the HP channel. Not only has the number of deals increased, but the average size of the deals has also gone up.

MphasiS has also improved efficiency of its operations in terms of employee utilisation and management of its sales outstanding. In the October quarter, employee utilisation reached 82%, including trainees, because the company decided not to recruit new employees except for adding 700 employees of AIGSS, the software division of AIG, which it acquired in August 2009.

It now takes 72 days on average to collect receivables, 11 days fewer than the year ago. Despite its impressive performance, MphasiS’ stock fell by 4% to Rs 668.5 on Wednesday.

Analysts from Emkay Global Financial Services and Kotak Institutional Equities Research feel that much of the future upside in MphasiS’ business has already been captured in its current price-earnings multiple of over 16.

The full impact of AIGSS’ acquisition would be visible in the next quarter. This, coupled with the thrust from HP’s channel, is expected to keep the tempo high for MphasiS in the coming quarters.