IT majors worried about cascading effect of Dubai crisis

MUMBAI/BANGALORE: As Dubai World, the emirate’s investment firm seeks more time to repay almost $60-billion debt, India’s top tech firms fear
that the once lucrative West Asia market for outsourcing can enter a prolonged recession and customers in other top export markets of the US and Europe may exercise more caution while making outsourcing decisions.

Tata Consultancy Services (TCS), Infosys Technologies, Wipro, HCL and Patni Computer Systems are among Indian tech firms serving telecom, banking and other customers in the West Asia region. Dubai, the biggest commercial hub in the region saw home prices plunge by nearly half from 2008 levels, reflecting the worst real estate slump during the global recession, according to Deutsche BankAG.

“Global confidence is coming back. We were hoping for more spends. But now the confidence of our customers is shaking. I expect they are going to be a bit more cautious about spends and will not open up so much. Budgets were getting firmed up in December—clients will now relook at the whole thing,” said a senior software executive with one of the firms that was looking at the West Asia and Africa as a growth markets. Publicly, though, few firms are willing to admit to these worries.

While Wipro counts Qatar Petroleum and Road and Transport Authority of Dubai among its top customers, TCS serves Saudi Telecom. Domestic rivals Mahindra Satyam also counts Dubai Municipality and National Bank of Dubai among its key customers in the region.
Wipro’s Anand Sankaran said the crisis was not entirely unanticipated as reports of people in Dubai abandoning their cars in airports because of the economic slowdown have been around for 9-12 months. “To mitigate this risk, we started looking outside Dubai,” he said. Wipro’s IT business in the West Asia is around $80 million and its Dubai business is 15-20% of it.

Apart from exposure to Dubai, the impact on companies could be lower IT spends from West Asia, which was perceived to be a growth market. Tech Mahindra had announced several wins from the West Asia and multinationals like CapGemini had appointed a partner-level executive to open up the market, as opposed to handling it from its UK office earlier.
But possibly more worrying are Dubai’s linkages to the financial world. “Dubai has a lot of financial connections and there could be a
ripple value on the dollar. Any imbalances in the economy could have potential impact on the stability of the dollar and IT spending as well. Further, it is a negative sentiment for the financial sector,” said Ganesh Natarajan, former Nasscom chairman and CEO Zensar Technologies.

“West Asia accounts for mere 1-1.5% of exposure for Indian IT. So the revenue risk is only to that extent. However, the indirect impact could be more severe. Because European and US banks have direct exposure to West Asia, increasing default risk will turn this industry to be conservative in allocating capital and in their spendings, including IT spending,” said Alok Shende, principal analyst, Ascentius Consulting.

“US banks had recently started coming out to of their hibernation, and since US and European banking industry have a significant pie of Indian outsourcing industry, the risk aversion could slowdown the pace of outsourcing,” Mr Shende added. Mastek CMD Sudhakar Ram, however, said the impact was only a second or third order impact, it would not be very major. “As it is, companies were spending only on keeping the lights on. So they cannot cut back on that,” he said. But if indeed customers continue to spend only on keeping the lights on (or in other words, only absolutely necessary spends), then the much-awaited recovery that IT firms were anticipating may be delayed yet some more.

TCS to hire about 25,000 in 2010-11

Indicating a revival of business opportunities, Tata Consultancy Services (TCS) has said that it will recruit about 25,000 people in 2010-11.

In 2009-10, the company has absorbed 1,500 in the second quarter and would add 8,000 more this quarter.

The IT major has said that it would send appointment letters to the remaining 15,385 candidates in the last quarter of the financial year.

At present, the company, which employs 1.41 lakh people, registered an attrition rate of 11.50 per cent for 12 months.

Addressing a press conference here on Friday, Mr Ajoy Mukherjee, Head (Global HR) of TCS, said if the number were as big as 24,885 the company had planned to induct this year, it would not be far away from that target.

Mr Ajoy Mukherjee was here in connection with Sangam, the company's annual interface with the industry and academic institutes.

“We are finalising the business plan for the next year. We are going to campuses as the students enter their eighth semester,” he said.

Mr N Chandrasekaran, Chief Executive Officer and Managing Director, has announced that it would fund 200 PhD students in computer science research, 40 each in the next five years, at various institutes.

“At a time when new technologies are changing business models rapidly, there is an urgent need for more focussed research to stay ahead of the learning curve. The TCS Research Scholars programme will help enlarge the research and development agenda,” he said.

Plan for verticals

Though the company had significant presence in several verticals, the company had decided to accelerate pace of growth in some other verticals in which it was having relatively smaller presence. “We are going to increase focus on pharma, aerospace, retail and utilities,” he added.

He said the company would continue to focus on the emerging markets such as Latin America, India and Asia Pacific and Caribbean.

Official: IBM US headcount down to 105,000. Down by 10,000 in 1 year

IBM's United States work force has been in decline for years, but it has recently shrunk more quickly.

News that IBM's American jobs were down to 105,000 came in a presentation to a congressional subcommittee by Maria Ferris, IBM's director of diversity, compliance and employee experience.

That means a decrease of 10,000 IBMers since the end of 2008, when it was 115,000.

Ferris' remarks were reported Nov. 16 as part of a pitch to relax some Fair Labor Standards Act provisions, which she said would increase workplace and time flexibility.

IBM has been cutting costs and raising profits. One way is "work force rebalancing," which involves shifting work around, often overseas, and U.S. downsizing.

"We've been saying that the offshoring of U.S. jobs would bring the IBM employee population down significantly, and I think we're seeing that now," said Lee Conrad, national organizer for Alliance@IBM, a workers' group based in Johnson City.

The Hudson Valley got a dose of downsizing this year. At IBM's East Fishkill plant, 340 jobs were cut, according to IBM documents filed with the state Department of Labor.

IBM cut about 100 to 120 jobs at its Endicott plant this year, Conrad has said, citing information from local employees.

Before the reporting act was toughened, other jobs at IBM plants were cut, however the company won't say how many.

No IBM spokesman in a position to comment could be reached. IBM has previously said it remains a major U.S. high-tech employer.

At the end of 2008, IBM had 398,455 employees globally, with the U.S. portion forming 28.9 percent of that.

Pai denies ‘turf war' at Infosys

BANGALORE: The news of two Infosys top executives leaving the company due to various reasons, has given air to the rumor that a turf war is brewing in the top echelons of the IT behemoth, however, top brass of the company categorically denied any such thing.

Recently, a citizen journalist website, citing sources claimed that there was a “bitter turf war” within the company which puts Infosys at a risk of “losing some of the most respected executives in India.” “There existed two extremely strong factions within Infosys - Nandan Nilekani and Mohandas Pai…A united face to the world, the continuous tension between the two head honchos was a well kept secret restricted to the inner circle.

Those in Nandan’s faction (read Amitabh Chaudhary) are slowly being edged out of the inner circle after Nandan left the top post.

Latest to hit the bandwagon are Rishi Jain (AVP and Head of Corporate Planning at Infosys BPO) and Purnima Menon (Head - Marketing for Infosys BPO),” the website said.

Infosys HR Head, Mohandas Pai told Express, “There is no such turf war. Joydeep is leaving but he had put in his papers three months ago for personal reasons and we would be finalizing his successor shortly.” “Rishi and purnima have not resigned!” he added.

The resignation of Joydeep, who heads the Knowledge Process Outsourcing business of the company, was reported by news papers on Thursday.

Knowledge services contribute about 10 per cent of Infosys BPO’s annual revenue of over Rs 1,450 crore. Joydeep took over from Ramit Sethi, who quit last year to head the KPO practice at Wipro.

Amitabh Chaudhry, who took over as the Chief Executive of Infosys BPO in March 2006, had reportedly submitted his resignation on Tuesday.

The BPO arm of Infosys employs about 16,000 staff and offers finance and accounting, human resource and legal services outsourcing.

Chaudhry who is tipped to join HDFC Standard Life Insurance to head its business in India as CEO could not be contacted and HDFC Standard Life Insurance spokesperson declined to comment.

Satyam to Hire 1,000 College Graduates by Mid-December

MUMBAI -- India's Satyam Computer Services Ltd., now operating under the Mahindra Satyam brand, will recruit around 1,000 college graduates by mid-December, a senior company executive said Friday.

"The need to hire some entry-level people is being felt because of attrition and to prepare for the future," Hari T, chief people officer, told Dow Jones Newswires.

Fraud-hit Satyam was acquired by Tech Mahindra Ltd. in April via a government-led auction after Satyam's founder and then chairman confessed in January to cooking the company's books.

These recruits will be among the 7,000 who received offers from Satyam before the scam came to light, Mr. Hari said.

Satyam was doubly hit by the global economic meltdown as clients canceled projects and sought price cuts as they faced pressure on profits.

In a bid to cut costs, Mahindra Satyam also cut salaries and placed staff who were not working on billable projects on forced leave.

However, the company is now recovering from the fraud and the impact of the global meltdown.

Mr. Hari said the company has already recalled about 1,500 people from the original 8,000 placed on forced leave.

Zurich and CSC in $2.9bn deal

Computer Sciences Corp (CSC) has signed a $2.9bn (£1.76bn), 10-and-a-half year master service agreement with Zurich Financial Services Group (Zurich) for IT services in Europe and North America. The deal is expected to pave the way for country specific agreements later. Under the contract, CSC will centralise Zurich’s data centre and virtualise its servers and up to 1,000 Zurich employees will potentially transfer to CSC during the first half of 2010. The relationship between Zurich and CSC began in July 2004 when the companies signed a seven-year, $1.3bn contract.

Forbes names Satyam's Raju as world's 4th most outrageous CEO

It's one Forbes list where none would want to figure, but Ramalinga Raju, the founder-chairman Satyam Computers (now Mahindra Satyam), has managed the feat of being among the world's 10 most outrageous CEOs.

Raju has been ranked as the world's fourth most outrageous CEO in 2009 on the list compiled by the Forbes, known for its rankings of the richest and the most powerful the world over.

Giving Raju company are Sri Lankan-origin American hedge fund manager Raj Rajarathnam (third), former Merrill Lynch CEO John Thain (2nd) and Goldman Sachs' Lloyd Blankfein (1st).

Raju, the only Indian on the list dominated by Americans, owes his place on the list to his disclosure in January about committing the country's biggest ever corporate fraud.

"In January, B Ramalinga Raju, the founder of Satyam Computer Services, confessed to overstating its profits over several years and creating a fictitious cash balance of more than $ billion.

"He confessed to inventing more than 10,000 fictional employees to help him steal money from the company, and using his mother's name to buy land with the proceeds. The police arrested Raju, his co-founder and brother, B Rama Raju, and former CFO Srinivas Vadlamani on charges of cheating, forgery and breach of trust.

"Despite Raju's confession, he has yet to face charges in court," Forbes said, adding the investigators have now found
the fraud to be "much worse than expected after they discovered another $ 1.25 billion beyond what was already
known."

Raju on this list is followed by American businessman Thomas Petters (5th), who went on trial in October for
allegedly orchestrating a $3.5-billion fraud.

The magazine said about a year ago Bernard Madoff "raised the bar for corporate malfeasance to an all-time high when he
was arrested on charges of orchestrating a $50-billion Ponzi scheme."

"Obviously, nobody managed to top Madoff's crimes in 2009, but 10 executives showed enough greed, hubris and
chutzpah to altogether give him a run for his (stolen) money," it said about the list.

Those on the list include AIG's former CEO Edward M Liddy, who faced a nationwide firestorm when it emerged that
$165-million in retention bonuses were being paid to the executives, at the sixth position.

At the seventh position is Danny Pang, founder and the then chief executive of Private Equity Management Group, who
was arrested in April on charges of structuring cash transactions so that he wouldn't have to report them to the government.

In April, the SEC of the US accused Pang of running a Ponzi scheme that defrauded his investors of hundreds of millions of dollars. Pang died in September at age 42, before he could stand trial. A report is expected by January to say
whether he committed suicide.

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.

250,000 IT jobs up for grabs soon: Infy director

With the global economy gradually bouncing back, the IT job market is also picking up and around 2-2.5-lakh jobs in the sector are likely to be up for grabs, a top Infosys [ Get Quote ] official said on Wednesday.

"The job scenario is improving...this year the market is likely to see around 2-2.5-lakh jobs," Infosys director-human resources Mohandas Pai told reporters.

The IT jobs market will, however, not be the same as it was two years ago but will also not be as bad as it was last year, Pai said, adding the fresher-lateral hiring ratio is likely to be around 65:35 per cent this year.

Two years ago there were around 3-4 lakh jobs available in the IT market, he pointed out. The industry has witnessed a lower growth rate in the last 18-months, Pai said, adding that the market is not so open now.

Infosys has plans to hire around 20,000, Pai said, adding that, however, campus recruitments will be lower this year as compared to the last.

"This year, Infosys will be hiring around 20,000 as against 16,000 that we recruited last year. Campus recruitments, however, will be less," Pai said. However, did not divulge the exact number that he is planning to hire through campus recruitments.

Pai said that Infosys has given a 7-8 per cent hike across the board whereas globally it was two per cent. Attrition stood at 10 per cent at Infosys, he said.

Infosys to drive out of auto engg biz, focus on aerospace projects

MUMBAI: India’s second-biggest software exporter Infosys Technologies plans to stay away from top auto customers in its engineering services business and shift its focus from commoditised and price-sensitive projects.

Engineering requires a mix of programming and core engineering skills such as mechanical or civil, depending on the industry being serviced, and is billed at higher rates than traditional application development and maintenance projects.

“We have chosen to walk away from this (auto) industry because the work has become increasingly commoditised because of high competition. We are a premium services player and our contribution is value-driven,” said Valmeeka Nathan, vice-president and head of product lifecycle and engineering, Infosys. He said the company had chosen to de-risk revenues from this segment and instead focus on segments such as aerospace, which provides stability and visibility of revenues.

Some of the other focus areas for the company in engineering services will be sectors such as heavy engineering, hi-tech, energy generation, medical and apparel. Mr Nathan said aerospace contributed about 40% to the company’s engineering services revenues, with the remaining 60% coming from other sectors. “The contribution of the auto (sector) to our (engineering) revenues is minor. We do take on projects from auto clients but selectively,” he added.

“The nature of engineering services is different from software services, and requires a fairly different talent pool. Vendors have their own niche because it requires a fair amount of competency. It also doesn’t offer the same kind of scalability as the rest of the software business,” said Sandeep Muthangi, analyst with IIFL. “Even outside of engineering services, Infosys does not have much exposure to the auto sector,” said an analyst with a foreign brokerage.

With auto majors, General Motors (GM) and Chrysler, slipping into bankruptcy, the auto sector has been a trouble spot for IT vendors such as Tata Consultancy Services (TCS) and Wipro that service them. Revenues from the auto industry have declined and analysts said they could not comment on the current contribution of GM or Chrysler to the revenues of the IT majors.

However, on the sidelines of the recent Nasscom Global Engineering Leadership Summit, Regu Ayyaswamy, VP (engineering and industrial services), TCS, said that the company was seeing ‘some sporadic signs of growth’ from the auto industry.

Engineering services is expected to clock to $7 billion in software export revenues this year with over 50% of it coming from the semiconductor and telecom industry. However, by 2020 when engineering services revenues are expected to touch $40 billion - $50 billion, the auto sector is expected to hold its own along with sectors such as consumer electronics and aerospace.

HCL Tech enters strategic partnership with Savvion

MUMBAI: Global IT services provider, HCL Technologies Limited (HCL), announced a strategic partnership with Savvion to extend its services in the Business Process Management (BPM) space.

With this, both HCL and Savvion would be able to help customers implement and optimise business processes across the organisation, a press release issued here stated.

The BPM solutions enable visibility into extremely critical business processes such as order management, onboarding new clients and releasing and supporting products with an ability to track and measure these processes real-time.

"With this partnership with Savvion, we wish to expand our services across verticals with focus on financial services, media, publishing and entertainment, Government and retail," HCL's Vice-President (Corporate) and Enterprise Application and Transformation Services (Head), Ramakrishna V, said.

HCL Tech says wins $200 mn outsourcing order

NEW DELHI: Software services firm HCL Technologies on Monday said it has won a contract worth $200 million from British insurer Equitable Life
Assurance Society.

The contract begins in March 2011, HCL said in a statement.

Satyam’s internal auditor arrested

The Central Bureau of Investigation (CBI) today arrested the internal auditor of former Satyam Computer Services Limited V S Prabhakar Rao. Rao was under investigation for his role in assisting the Raju brothers in cooking up the balance sheets and forging bank statements. A CBI official said that though Rao’s role was suspected since the beginning, they could not establish a link till now. “We have arrested him today. We have adequate proof to link him with the entire scam,” the official said. Rao was also a key aide of Satyam founder B Ramalinga Raju and is learnt to be the brain behind suggesting how to fudge the account statements. Rao was produced before the Nampally court which remanded him to four days in CBI custody.

Meanwhile, the Institute of Chartered Accountants of India (ICAI) has announced its decision to issue separate notices to six auditors found “prime facie guilty of professional misconduct” in the Satyam Computer Services case.

These notices are being served on four auditors belonging to the statutory audit team of PriceWaterhouse, Bangalore — S Gopalakrishnan, Srinivas Talluri, Shiva Prasad and Ch Ravindranath. Besides that, notices are also being issued to V Srinivasu, chief finance officer of the company, and V S Prabhakar Gupta, head of the internal audit cell of the company. Notices will also be issued to the New Delhi and Kolkata offices of PriceWaterhouse. These notices are being issued based on the report of Director (Discipline) of the ICAI into the role of external and internal auditors in the commission of the financial regularities in Satyam Computer Services Ltd.

Tech companies find it difficult to crack deals in US, Europe

BANGALORE: For India’s top tech firms seeking to take an inorganic growth route for expanding in the US and European markets, successful acquisitions are becoming harder to come by, as potential targets demand high valuations and cultural barriers in several countries act as a bottleneck.

Over the past two years, tech firms including Wipro, Infosys, Patni and several others have had discussions with potential targets such as Globant of Argentina, Ciber in the US and IDS Scheer of Germany. While IDS Scheer was acquired by Software AG earlier this year, both Globant and Ciber decided to discontinue their dialogues with potential acquirers.

“It is not a surprise to me that we are an acquisition target as we do have a very unique model which makes us attractive, but also it is very difficult to acquire,” said Tony Hadzi, executive vice- president & president (custom solutions division) of Ciber. “However, we do not want to be acquired and not aiming to be acquired. We have solicitations, but we just turned them down.”

With around $1.2 billion in revenues, and customers such as American Express, AT&T, General Motors and Abott Laboratories, Ciber makes a very lucrative acquisition target for an Indian company seeking to establish a stronger US footprint.

“We did explore Ciber, but valuations apart from other issues did not help our efforts,” said an executive at an Indian tech firm involved with M&A initiatives. He requested anonymity because he is not authorised to discuss such transactions with media.

Meanwhile, smaller service providers in countries of Brazil, Argentina and Mexico, such as Globant, which counts Adidas, LinkedIn and Citi among its top customer, have also been approached by several Indian tech firms, including Patni. But, the dialogues could not conclude.

Globant, with around $100 million in revenues, can help an Indian tech firm gain near shore advantage and serve top US customers better. “We wanted to explore M&A opportunities with Globant, but the valuation being demanded was almost $400-500 million at $4,100 million revenues. We were not ready for a transaction at such premium,” said a senior executive at one of the tech firms, which had evaluated Globant for a potential acquisition.

In Germany, where Infosys, Wipro and several other Indian tech firms are pursuing acquisition targets, the companies are wary about offshoring of jobs. Experts such as Peter Schumacher of European strategy consulting firm Value Leadership say acquisitions are an emotional issue in Europe, which many Indian tech firm are not realising.

“European companies and employees are concerned that Indian companies will fire employees in Europe and shift work offshore,” he said. Citing an example he said NIIT’s acquisition of German services firm AD Solutions in 2002 provides some learning for Indian tech firms. “While they started with much enthusiasm, they failed to acquire any offshoring business during the following 12 months period. They also ran into significant integration problems, which they had completely underestimated,” Mr Schumacher added.

Within just 15 months the German unit saw its headcount drop 26% at significant cost. “With proper preparation, NIIT should have anticipated most of these problems prior to the acquisition,” he added.

Sony Ericsson to cut 2,000 jobs globally

Mobile handset maker Sony Ericsson today said it will cut 2,000 jobs globally as it phases out activities at some of its locations.

"As part of its programme that started a year ago, Sony Ericsson will phase out activities at some of its locations worldwide and plans to reduce headcount globally by 2,000 people," Sony Ericsson said in a statement.When asked if the move will impact the Indian operations as well, company officials declined to provide details when contacted.

Sony Ericsson intends to complete its programme by mid-2010, it added.

The company will phase out activities at some of its locations worldwide, as part of a cost reduction programme.

It added that the company was continuing with its business transformation programme as announced earlier and the main aim was to return to profitability as soon as possible.

Sony Ericsson intends to complete its programme by mid-2010

2-3 Satyam seniors face arrest

Hyderabad: The Central Bureau of Investigation (CBI) is gearing up for a speedy trial in the multi-crore scam in Satyam Computer Services, now known as Mahindra Satyam.
According to a source, the CBI is making some brisk moves to effect some more arrests in the case.

"There are at least three more people on the radar," the source said, adding these could be company seniors. The CBI has filed a memo in a local court seeking to frame charges against the accused. This will formally commence the trial process and the accused will get to respond to the charges leveled against them.

However, the counsel for the accused objected to the application on the ground that the framing of charges and asking the accused to defend themselves before the supplementary charge-sheet is filed by the CBI would jeopardise the interests of the accused.

Coming soon: IBM tech hubs at Bhopal, Nagpur, Jaipur

JAIPUR: IT solutions provider IBM is planning to expand its footprints in tier II and tier III cities with a bouquet of hardware, software andservices offerings primarily targeted at mid-market clients.

IBM Growth markets vice president Harish Krishnamurthy told ET that the company is soon going to set up its hubs in potential cities like Raipur, Bhopal, Bhubhaneshwar, Vizag and Nagpur. “These cities have great untapped potential.

By starting our hub in these cities we would be able to cater to the requirements of surrounding tier III cities through our partners under hub and spoke model. The small and medium enterprises offer great business opportunities,” he said.

At present, IBM has a direct presence in 22 cities across the country. The company has also appointed IT players Sequel Infocom and Icon Integrated services as the channel partners to sell IBM’s infrastructure services to clients. “These two partners will focus primarily on Rajasthan market. They will help us in enhancing our reach in the state by offering infrastructure services to clients helping them in areas of Green IT, security, business continuity, improved collaboration and communication among others,” he said.

IBM has also launched first of its kind service offering named IBM Express Remote managed Infrastructure Services (ERMIS) exclusively to be sold by its channel partners. “IBM cannot sell it directly to the clients. It has to be sold through our channel partners. It is designed to enable IBM business partners in providing their clients with remote monitoring, management and service reporting of their IT infrastructure,” said Vivek Malhotra, IBM vice president – North & East, General Business.

Apart from that the company has also launched a cost-efficient Scalable Modular Server Rooms (SMSR), which has been successfully implemented in Shree Cements. “This is also first of its kind in the country. Unlike other conventional servers, which take 6-7 months for installation, this data server takes shipment time of 2-3 weeks and just 3 days of implementation time. Also, it consumes 15-30% less power than other servers. The entry level model comes at a competitive price point of $50,000 which is almost 10% of any conventional server,” Mr. Malhotra said.

Dell-Perot to introduce ‘pay-as-per-use’ model

NEW DELHI: Dell-perot Systems, which bundles hardware and software solutions for offering low-cost services to hospitals and other healthcare companies, plans to replicate its American model for gaining more business in India’s $12-billion domestic market.

The company, which is already offering its pay-as-per use service to healthcare customers in the US, signed a 10-year contract with Max Healthcare earlier this year, bidding against domestic rivals TCS and Wipro, for Rs 90 crore.

At a time when the US is preparing to spend almost $46 billion on modernisation of its ageing healthcare systems, and even the Indian government has aggressive IT-enabled programmes, tech firms such as TCS, Infosys and Wipro will have to compete against Dell-Perot and IBM.

“Historically there was a software and a hardware side to an IT service. Today, companies are bundling both service capabilities into one and offering it as an integrated IT solution. It helps in reaching out to the customer faster and reduce overall IT cost,” said Mr Fickenscher.

Cloud computing for hospitals and healthcare service providers is expected to reduce their overall operational and capital expenditure by up to 30-40%. Computing through cloud, or delivery of software business applications through a given network allows customers and users to use a service without owning any hardware infrastructure or software licences.

“We have launched this model in the US and it has been quite successful. It will take some more time to get these services into India, as it requires deployment of appropriate IT systems and training people on the same,” said Mr Fickenscher.

The company is already in talks with several other hospital chains in the country to manage and control their IT infrastructure. Going forward, Dell-Perot will also look at government projects in the heathcare space aggressively.

India is among the four major growth markets for Dell-Perot, the others being China, Europe and the Middle-East. The company feels that there is a huge scope of providing cloud computing services — IT services over internet — largely to physicians in India, as they usually do not have access to data centres.

The company is expected to launch cloud computing services in India, China and the UK over the next 12-18 months and Latin America subsequently.

Experts such as Diptarup Chakraborti, principal research analyst at Gartner said Dell-Perot will be a bigger worry in the overseas markets for Indian tech firms.

“Dell acquired Perot largely to cater to the US market where it was loosing out due to lack of complete product portfolio. Since Indian IT services Infosys, Wipro and TCS focus primarily on the US and European markets, Dell will give a tough competition to them in these markets considering that Perot System is the largest service provider in the healthcare space worldwide,” he said.

Britain’s National Healthcare Services (NHS) programme is another opportunity for Dell-Perot to replicate its cloud computing model.

“BT has an ongoing contract with the government to provide IT services, specifically to around 37 trusts/hospitals. We are a subcontractor to BT in that project. However, the model on which the IT solution will be based is yet to be finalised. BT is having conversation on the same with the government and will finalise it soon.”

Infosys:Clients' Budgets Likely Flat or Slightly Down

By DEEPALI GUPTA and ANKUR RELIA

MUMBAI -- Infosys Technologies Ltd. expects its clients' information technology budgets in 2010 to be unchanged or marginally lower, its chief operating officer said Tuesday.

"Past patterns suggest that when budgets are under pressure, clients do all kinds of things to get more with less, like outsourcing and offshoring," S.D. Shibulal told reporters on the sidelines of an industry conference.

India's software exporters have been hurt in the past few quarters because of the global economic slowdown, which led their customers to scrap or delay projects and seek lower rates for products and services.

Mr. Shibulal said the company's clients are saying the global economic recovery might be protracted, indicating that they would continue to be cautious on their spending.

However, he said clients have begun making decisions on their IT spending, underscoring optimism that the worst from the global economic crisis was over for the software outsourcing industry.

Mr. Shibulal expects Infosys--India's second-largest software exporter by revenue--to sustain margins in a narrow range, despite the investment it is planning.

"We are not looking to expand them (margins) significantly," Mr. Shibulal said.

In the July-September quarter, the Mumbai and Nasdaq-listed company's operating margin grew to 34.6% from 34.1%, helped by operational efficiencies and a fall in the value of the dollar against European currencies.

Mahindra Satyam ties up with Gen-i, Australasian ICT

HYDERABAD: Mahindra Satyam today announced that it had tied up with Gen-i, Australasian Information and Communication Technologies (ICT) services provider, to provide a suite of leading edge Windows 7 migration services to its customers.

C P Gurnani, CEO, Mahindra Satyam said, "We are thrilled to strengthen and expand our relationship with Gen-i. The agreement leverages both companies' expertise to enable customers to realise an improved user experience with greater reliability and lower total cost of ownership."

Sarah Vaughan, Windows 7 Commercial Group Lead, Microsoft Australia, said that the alliance would bring increased business benefits to customers.

Mahindra Satyam's Windows 7 migration approach includes tools for automated testing, automated remediation and packaging of Vista, Windows 7 and App-V that aids enterprises to automate 90 to 95 per cent of its remediation requirements. This would help reduce the compatibility testing and remediation costs up to 40 to 50 per cent

Mahindra Satyam joins Symbian Foundation

NEW DELHI: Mahindra Satyam, formerly Satyam Computer Services today announced its decision to join the Symbian Foundation, a mobile software platform.

As a member of the Foundation, the company gains the immediate right to licence the Symbian Foundation platform without any royalty and source code fees, participate in the governance of the Foundation, and take part in joint marketing and branding campaigns, Mahindra Satyam said in a statement today.

The Symbian platform is an open-source operating system for mobile devices. It was created by merging/integrating software assets contributed by Nokia, NTT DoCoMo and Sony Ericsson, including Symbian OS, the S60, UIQ and MOAP(S) user interfaces.

Portions of the source code are already being moved to open source, under the Eclipse Public Licence, and by mid-2010, the process will be complete, the release said.

"The Symbian Foundation welcomes Mahindra Satyam into the community. By understanding and engaging with the Symbian platform, Mahindra Satyam will contribute to a growing, evolving mobile value chain," Symbian Head for Community Support Shaun Puckrin said.

Capgemini to expand India headcount

NEW DELHI: Outsourcing firm Capgemini is all set to increase its India headcount with the opening of a new business information centre in Bangalore, according to a report in a business daily.

The Bangalore centre will take the company's India headcount beyond 21,000, an increase from its employee strength of 20,000 in home country France.

According to the company, the new centre in Bangalore would start with a workforce of 1,000, which would scale up to 3,000 in about 18 months.

Paul Nannetti, general manager of Capgemini's global business information service line, said, "Bangalore provides plenty of application and technical skills in information management." He added, "The company can scale-up there much more quickly than in onshore locations."

India is among the most attractive outsourcing destination for global MNCs including IBM, Accenture and Microsoft, giving tough competition to domestic players TCS, Wipro and Infosys. The country offers large pool of skilled and low-cost talent for business information management services that help companies improve their collection, use and analysis of data.

Pooja Chawla , Ahmedabad , says: Please do open a center at ahmedabad too..ahmedabad is lacking MNCs and as a city it has perfect infrastructure and manpower for any MNC to progress.
[10 Nov, 2009 | 1005 hrs IST]

Syed Arshad Ali , Bangalore , says: from when they r going hire the freshers
[4 Nov, 2009 | 0950 hrs IST]

Madhavi P , Bangalore , says: Its really nice to know about the expansion but i would like to know as a fresher what would be the openings available?As it would would be really helpful for us.. Madhavi P
[4 Nov, 2009 | 0800 hrs IST]

NEETA , hyderabad , says: THESE PEOPLE STILL DIDN'T CALL THE 2009 PASSED OUT SELECTED STUDENTS...... hope they will let us know all the campus selected guys when they will be taking.

Belgaum gets an aerospace SEZ

BELGAUM: India’s aerospace engineering and manufacturing segment took a leap on Saturday with the launch of a 300-acre aerospace SEZ (special economic zone) in Belgaum , North Karnataka.

In attendance on the momentous occasion were senior representatives of aircraft and aircraft-component makers from around the world, including Boeing,EADS (Airbus),Rolls Royce,Pratt & Whitney,United Technologies and Lockheed Martin.
Boeing India president Dinesh Keskar said this was the only facility of its kind outside HAL.The SEZ, promoted by Quest Global, aims to be a one-stop shop for everything from engineering-design services to manufacture of aircraft parts and sub-systems.

The SEZ has seen an investment of Rs 150 crore from Quest, and hosts three operations — an engineering services facility, a precision machining facility and a sheet metal facility. The last of these is in a joint venture with Canada’s Magellan Aerospace.

Three more MoUs were announced on Saturday; one was with with Belgian aerospace company SABCA to manufacture metallic parts and assembly work for the Airbus A350. This deal is expected to be worth $100 million over the next ten years. A second MoU was signed with Magellan to evaluate setting up a dedicated facility to manufacture components and sub-assemblies for aero engines . The third MoU was with Farinia Geie, a French foundry and forgings company to establish an aerospace forging facility.

Magellan VP Konrad Hahnelt said Quest had done complex work for Magellan which had encouraged the company to expand its relationship. “Setting up the kind of processing facility that we have in the SEZ is also complex, because such facilities have to get numerous approvals,” he said.

Sprint cutting up to 2,500 more employees from the payroll

It's been a helluva couple years for Sprint -- new networks, new platforms, and new acquisitions have all been intermixed with a drawn-out recovery effort that's undoubtedly weighed heavy on the hearts and minds of staff at the company's dual headquarters in Kansas and Virginia. With more (albeit slower) subscriber losses in its most recent earning's report, it's still all but impossible to say whether they'll be able to survive in the long term as an independent operation, and we're not quite sure what to make of this latest move, either: a promise of 2,000 to 2,500 job cuts to be announced through the fourth quarter, many of which will be completed before the year's up. It gets a little weird here because Sprint's applying some hardcore spin in its press release, touting the fact that reduced calls to customer service -- ostensibly due to an improved experience -- have lessened the need for call center staff, but we're not really buying it; the business continues to shrink, and staff continue to be cut. The good news is that they're being cut at a much slower rate than before, so it's still entirely reasonable to believe that black ink is in sight -- particularly if they've got a killer 2010 lineup in store.

US Job losses, deep and enduring, especially for the young

NEW YORK: The rise in unemployment that has occurred in the current recession has been hardest on young workers, while having a smaller effect on older workers than previous downturns. Women have been more likely than men to hold on to their jobs.

The overall unemployment rate, which reached 10.2 per cent on a seasonally adjusted basis last month, remains below the post-World War II peak of 10.8 per cent, reached in late 1982. But the proportion of workers who have been out of work for a long time is higher now than it has ever been since the Great Depression.

The persistence of joblessness for so many people – 5.6 million Americans have been out of work for more than half a year even though they have continued to seek employment – may provide the greatest challenge for the Obama administration if it decides to seek a new economic stimulus programme.

The short-term unemployment rate – the proportion of the work force that has been jobless for less than 15 weeks – has begun to decline, however, and stood at 4.5 per cent in October after peaking at 4.9 per cent in May.

That decline is a signal that the recession, which officially began in December 2007, probably has ended. In past recessions since World War II, the National Bureau of Economic Research has always dated the end within two months of the peak in short-term joblessness.

Over the last three years – since October 2006 – the overall unemployment rate has risen by 5.8 percentage points. That is the largest such increase since the Great Depression, providing another indication of the rapidity and severity of the current downturn.

Before this cycle, the sharpest 36-month increase since World War II was a 4.9 percentage point rise in the period that ended November 1982.

A government household survey in October found 7.7 million fewer jobs than in December 2006, when the employment-to-population ratio reached its high for the current cycle. The declines during the two earlier cycles, from November 1973 to June 1975 and from December 1979 to March 1983, were 0.8 per cent and 2.0 per cent, respectively.

Women have held on to jobs better than men have during this downturn, reflecting a pattern that prevailed during the previous cycles.

One major difference is how older workers have fared. The number of jobs held by men over 55 is up 5.6 per cent since the cycle began, and the number of jobs held by women of that age has risen by 9.3 per cent.

There are fewer jobs for workers age 54-64 than when the cycle began, but that group has done much better than younger workers.

By contrast, younger workers were more likely to hold on to their jobs in the two previous downturns.

It is not clear why that pattern has changed. It is against federal law to discriminate against older workers, but that law was passed in 1967, before either of the previous downturns. It could be that the plunge in real estate and stock prices in 2008 led fewer older workers to decide to retire.

The proportion of the work force out of work for more than 15 weeks reached 5.7 per cent in October, well above the 4.2 per cent figure reached in 1982. That had been the highest such figure since the government began calculating the number in 1948.

The proportion that has been out of work for at least 27 weeks – half a year – is now 3.6 per cent, also a record.

Master technology first; be a manager later, says Infosys

Infosys Technologies has decided that its staffers must have at least six years of having worked on technology responsibilities before being asked to head a project.

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This is the latest move in a process that began 18 months earlier, after clients had complained that its project heads didn’t seem to have enough of technological skills. That, in turn, was because of the industry’s high growth and also the pace of attrition (employees quitting) in the sector.

So, many employees were being given managerial responsibilities within three to four years of joining. However, from last month, all freshers joining the company will have to compulsorily stay focused on technology for the first six years of their career. After this, they will have to choose to either grow vertically as a techie or take up managerial responsibilities.

Infosys says this new strategy, termed 'iRace', aims to re-map the technology skills of its software professionals and offer them roles based on their current level of experience and technological know-how.

It appears to have already had some adverse effect, for a section of employees in the junior and middle levels are understood to have resigned.

"Because of the high growth in the industry, people were being given managerial responsibilities within three to four years, making clients return to us and complain about the lack of their technology skills. We have now re-mapped the efficiency of our employees, as a result of which some high performers have been mapped upwards, while others have stayed in their previous positions,” says Nandita Gurjar, Group Head for Human Resources.

By doing so, we will be able to meet the clients' requirements in a much better manner, she adds.

To make the task smoother, Infosys has created 25 career streams. An employee who does not wish to take up managerial roles but stay focused on technology has to identify positions like technical architect and technical lead till he goes up the ladder to become the Unit Technology Manager (UTO), a position the company has created now. Henceforth, all 13 business units of the company will have UTOs, who will directly report to the chief technology officer (CTO) of the company.

Infosys started the exercise almost 18 months earlier, following an internal assessment by consulting agency, Mercer. Based on the results, the company decided to implement what Gurjar terms a 'role structuring'.

Industry insiders concur that when the IT sector was booming and demand was high, people with very little experience were being given roles of project managers or technical leads, as it was difficult for the company to get experienced people. However, with the greater supply of trained resources, especially in the wake of the economic recession, most Indian IT companies are busy redefining the roles.

"We have seen people becoming project managers with less than six years of experience, whereas in most global companies, especially product companies, project manager is a big role. A person who manages projects in those companies should have at least 14-15 years of experience, which helps him handle multiple projects and customers at a time.

Besides, when a person becomes a project manager in six years, this ends his chance to learn on technology platforms," says a person who works as a project manager in an Indian IT services company.

At the end of the second quarter in the present financial year, Infosys' headcount was 105,453, including 97,594 software professionals.

Accenture wants to learn Indian growth trick

Mumbai: Nandan Sengupta, a bubbly 20-something software developer in his second year at Accenture India, can't hide his exuberance that he may get a chance to meet the company's chairman and chief executive officer Bill Green.

"We have been asked by our human resource department to send innovative ideas on how Accenture can accelerate its business in India. If my idea is selected then I would be sent to Delhi to discuss it with our chairman Bill Green who will be in India on the 13th of this month," Sengupta said.

Accenture is hosting its flagship annual event called Global Convergence Forum (GCF) involving clients, stakeholders and others for the first time in 20 years outside the US in Delhi this month, indicating the importance of India for the global consultancy firm.

"With Accenture's recognition of India as a strategic growth market, comes a big 'ask': how will we stretch ourselves to grow our India business, strengthen relationships with key government and industry stakeholders, and improve our delivery for international clients," read a mail sent to Accenture employees in India.

Meanwhile, in India to participate in the GCF, Accenture chairman Bill Green said the company will continue to focus on India, especially in the area of analytics. Green said that in the next two months the firm will hire another 8,000 in India taking the workforce strength in the country to 50,000 and globally to over 180,000.

"In India, besides many big firms, we have consulted firms which were yet to earn any revenue. We handhold them from their business conceptualisation stage to go-to-market," said an Accenture executive at the sidelines of a conference in Mumbai.

Accenture aims to bag IT and consulting projects from the current high-growth sectors in India such as utilities and pharmaceuticals. Top local IT firms and Accenture rivals such as Tata Consultancy Services (TCS), Infosys Technologies, HCL Technologies and Wipro Technologies, too, have started focusing on the domestic demand for IT.

TCS and Wipro already earn over $1 billion from their respective India businesses.
Accenture earned annual revenue of $21.58 billion for fiscal 2009 that ended August 31, 2009.

JDA Software to acquire i2 Technologies for $396 mn

MUMBAI: Supply chain solutions provider, JDA Software Group has entered into an agreement to acquire US-based i2 Technologies for an estimated amount of $396 million.

Post acquisition, the combined entity will create a global leader in the market of supply chain planning and optimization and will have annual revenue of $617 million, a press release said.

"The i2 acquisition will firmly establish JDA as a leading enterprise software company with a deep focus on supply chain management and a full complement of managed and hosted services offerings," JDA Chief Executive Officer, Hamish Brewer, said in the release.

The acquisition is expected to complete in the first quarter of 2010 and will take the total customer-base of the company to 6,000, the company said.

Also, the near term operating synergies resulting from the combination are expected to produce net annual cost savings of around $20 million, it said.

JDA Software has a global customer base of more than 5,800 retailers, manufacturers, wholesaler-distributors and services industries.

‘Virtual bench’ turns into real seats at mid-size IT cos

Adith Charlie

Mumbai, Nov. 11 The concept of a ‘virtual bench’ for non-billable employees may soon be a thing of the past at mid-size Indian IT companies, thanks to the gradual improvement in demand for software solutions.

While Hexaware Technologies has brought back all the virtual benchers on to the regular rolls, Mastek expects to achieve the same by March 2010.

It may be recalled that both Mastek and Hexaware had come up with this out-of-the-box solution to reduce overall employee costs and remain profitable in a tough economic environment.

Mastek had announced in February that it had put about 10 per cent (or 425) of its total employee base on a ‘virtual bench’ for up to 12 months with reduced pay. Alternatively, the benched employees — a mix of trainees and junior employees — were given the option to quit with a severance package.

By the end of September quarter, the company had some 200 employees on the virtual bench, as the remaining were either re-instated or had quit the company.

As things stand, by March 2010 the company expects to call back the ‘benchers’ onto the billable pool, according to Mr Sudhakar Ram, Chairman and Managing Director of Mastek.

“We are seeing an expansion in our order book in the current quarter which should translate into revenue growth for the next quarter,” he told Business Line.

Starting this March, Hexaware had inducted around 220 staffers in the virtual bench who had to take a 50-per-cent-cut in basic pay.

However, things started changing for the Mumbai-based company during the three months ended September 2009 riding on the revival in IT spend across the globe. The company won deals worth $80 million in the previous quarter. Of these, three deals were worth more than $15 million each.

“In the wake of the changing demand scenario, the concept of virtual bench no longer exists at Hexaware. Not only that, we have restarted hiring,” Mr P. R. Chandrasekhar, Vice-Chairman and CEO of Hexaware, said.

In the quarter gone by, Hexaware took on board around 116 employees. “In the current quarter we plan to hire at least as much as we did in the previous quarter,” he said. However, both Hexaware and Mastek agree that attrition did play a role in bringing down the count on the virtual bench.

However, there does not seem to be much luck in store – at least for the time being – for the 5,000 employees covered under the virtual pool programme at Mahindra Satyam.

“As things progress, the situation with regards to employees on the virtual bench will gradually improve. We will reinstate these employees on a case-by-case basis,” a senior company official said.

Recently, Mahindra Satyam offered its virtual benchers the option to continue on the company’s rolls albeit without any pay, for another three months starting December 18.

Wipro looking out for experienced IT professionals

Bangalore: With an increase in business, India’s third-largest IT services company Wipro is holding recruitment drives to hire experienced IT professionals (termed lateral hiring) across the country.

The company said in a statement on Tuesday that it plans to organise two-day walk-in interviews for experienced IT professionals in Bangalore, Chennai, Mumbai, Pune, Hyderabad, Noida and Kolkata, starting November 14.

The drive is a part of its regular hiring in line with business demands, the company said. Vice-President (Talent Acquisition) Pradeep Bahirwani said the company would hold recruitments simultaneously across the country to provide applicants a quick process to allow them to consider opportunities in other cities.

"We are looking to meet applicants across skill requirements in all business divisions with experience levels ranging from 2-14 years," he said.
He added the company had released recruitment advertisements to inform applicants of the drive.

"We encourage applicants to apply directly to us and not fall prey to fraudsters misusing company names and duping candidates," he added.

Wipro has also announced plans to hire BSc, BCM and BCA students graduating in 2010 for its Wipro Academy of Software Excellence.

Wipro eyes buys in BPO space

Meanhwile, India's third-largest IT services company Wipro Technologies is also eyeing acquisitions in the business process outsourcing (BPO) space as it expects the sector to drive the growth for the IT industry.

Acquisitions are part of our strategy. We keep looking at it. The BPO space is likely to be the next engine of growth for the IT industry. Also, the economy has improved and the IT demand situation is improving.

The deal pipeline is good and the demand environment is building up," said Suresh Vaswani, joint chief executive of the company's IT business, on the sidelines of the ongoing India Economic Summit here today.

Though the company is bullish about the current quarter, its says that outsourcing deals in the US are more transformational -- which completely replace existing technology platforms for clients.

About the pricing pressure faced by the company, he said customers are not looking for price discounts but are looking for substantial change in the cost structure. "We are doing more fixed-price projects which now form 40 per cent of the contracts we have. Fixed price models give both our customers and us a win-win situation," Vaswani added.

Wipro to hire sacked staffers

BANGALORE: If you are a pink slip recipient from Wipro, here’s a piece of good news. Wipro plans to rehire some of the employees it fired a year ago. "Non-performance was the reason for these separations. However, we are open to rehire some of these people who were fired by us a year ago, if they come back to us with additional skill sets. A one-year window would have been enough for them to acquire some additional skills," said Joseph John, vice-president (HR) in Wipro Infotech, the business that looks at the India and Middle-East markets.

The tech major's involuntary attrition rate has gone up by 2 percentage points in the last 16 months. Wipro Infotech said it would also resume campus hiring from January. "We are looking at hiring over 1,000 laterals during the fiscal and 1,000 freshers from campuses in January," said John.

The division, which recruited 1,000 people in the first six months of the fiscal, expects hiring numbers in the second half of the year to be more than double of that.

The additional people requirement comes with Wipro winning a slew of large projects in India and the Middle-East, and also to cater to the growing requirements of existing accounts. The company hired 200 people in Saudi Arabia and Egypt recently.


Wipro is also hiring for its Global Service Management Centre in Mysore with almost 5% jobs earmarked for differently-abled people.

Wipro Infotech is planning to raise the ratio of its women employees from 13% now to 20% in the next two years.
On salary hikes, John said the company had not budgeted a hike at the start of the fiscal. "But we have decided to raise salaries in the fourth quarter across the board."

Monish, Bangalore, says: What an Idea sirjee!!!! Do wipro really have an HR and Startergy Team.. or all has been pink slipped for non-performance.... umm....I pity wipro and its future. Beware dear Wipro Mgmt its time you realize for your mistakes and pay for them dearly.
[10 Nov, 2009 1644hrs IST]

karthik, chennai, says: why would any one who has been laid of at a time of crisis risk joining the same company again?.I bet there will be 0 takers.
[10 Nov, 2009 1631hrs IST]

Amit, Bangalore, says: what a non-sense! One yr back they fired them on performance basis and now they are hiring back. What improvement one can do who is sitting at home for 1 year? They just want to hire the same resources at much lower cost. All this propaganda of firing and rehiring is to save cost nothing else. Actually Wipro is the worst company with no ethics among all indian IT companies.....

MELBOURNE: The Australian government is introducing new measures to assist overseas students, including many Indians, affected by the closure of an international education provider, a minister said.

Minister for Immigration and Citizenship Senator Chris Evans said that from Jan 1, 2010, overseas students who require a new visa to complete their studies at another school or college will be exempt from paying the A$540 (approx. Rs.22,500) visa application charge.

Just this year alone, 12 education providers have closed affecting about 4,700 students.

Evans said that although most students will be able to complete their studies on their existing student visa, some may need to enrol in a new course that finishes after their existing student visa expires and will require a new visa.

"In situations where an education provider can no longer offer a course, the government's primary concern is the welfare of the student."

"We understand that these situations are not the fault of the student and the introduction of a fee exemption will ensure they are not shouldered with an additional financial burden," Evans said.

Students will be able to apply to the Department of Immigration and Citizenship (DIAC) for a refund of their visa application fee if they have been affected by the closure of an education provider in 2009 and have had to apply for a new student visa.

The government is also increasing the minimum financial requirements for overseas students to ensure they can meet their living costs while in Australia.

From Jan 1, 2010, prospective overseas students will need to demonstrate that they have access to at least A$18,000 (approx Rs.748,000) a year to fund their living costs in Australia, instead of the current A$12,000 (approx Rs.498,000).

Evans said: "It is important that students understand these financial requirements are only the minimum amount required for a student visa."

"International can supplement their income through part-time work in Australia but the primary purpose of a student visa is to study and students should not rely on part-time work to meet their expenses."

The measures target parts of the student visa caseload in India, Mauritius, Nepal, Brazil, Zimbabwe and Pakistan.

There are over 500,000 international students in Australia pursuing university education and vocational studies of which about 94,000 are Indians - the second highest after the Chinese.

Thousands of Indians are enrolled in vocational courses in government and private Technical and Further Education (TAFE) institutes.

In recent years, Australia's education industry has boomed to become the country's third-largest foreign currency earner after coal and iron ore, generating about $12 billion in revenue in 2008. Indian students in Australia alone contribute $3.5 billion a year to the economy.

An official said since these enhanced integrity measures were introduced, there has been an increase in the number of applications being withdrawn, from five percent in July to 17 percent in September.

"To date, more than 150 agents have had their eVisa access suspended due to evidence of fraud or inactivity."