The World Economic Forum conducts Annual Meeting in Davos (Switzerland) by inviting top business leaders, Intellectuals, political leaders to discuss on the most happening issues in the current environment.The business leaders usually try to participate in maximum number of events conducted in the 5 days period, attended by around 1000 Chairmen/CEOs of various companies. Apart from proposing constructive ideas for solving the issues, business leaders use this is as a stage to brand themselves, which in turn would help their company. Some companies have even doubled their turnover after this meeting. One such company is Enocean.
But this year, Michael Dell of Dell computers, went overboard in branding himself. To be precise, instead of branding, he tried to get some business from not another company, but from a country. In a stage shared by the Russian Prime Minister, Vladimir Putin, Dell asked this question to Mr.Putin. He offered help to Mr.Putin by asking "How can we help to expand IT in Russia", after mentioning that he felt there is room for Russia to capitalize in Intellectual and scientific sector.
And, Putin shot back by replying "we don't need any help. We are not invalids. We do not have limited capacity. People with limited capacities, abilities should be helped...developing countries should be helped". (Watch the video)
The question which could have been a big business for Dell, turned out to be a disaster.
Now, lets look at the Indian business leaders who are now in WEF, Davos:
1. Mukesh Ambani - Reliance
2. Kris Gopalakrishnan - Infosys
3. Ajit Gulabchand - Hindustan Construction Company
4. K.V.Kamath - ICICI
5. Lalit.K.Modi - Modi Enterprises
6. Nandan M. Nilekani - Infosys
7. Azim Premji - Wipro
It should be noted that, Infosys had gained some good branding in 2006, when Nandan Nilekani became one of the youngest entrepreneurs to join 20 global leaders on this World Economic Forum (WEF).
Tags: WEF, World Economic Forum, Michael Dell, Indians at WEF, Vladimir Putin
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1/30/09
1/28/09
Why outsourcing will be different in 2009
During this economic crisis, the IT budgets of companies have been under heavy pressure and major corporations are looking at outsourcing as a means to save money. But, the companies who have already outsourced their IT operations are looking at better deals to further reduce the cost. Here are the changes that are expected to happen in the outsourcing industry:
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- The traditional pricing model of time and material will be changed. Instead, the pricing will be more on transaction and results based - This model would demand more innovative approach to execute a project and will pose as a greater challenge to the project managers working in the outsourcing companies. It is not business as-usual execution for the management.
- Customers are also shifting towards short-term based contracts and fixed pricing models. This model will result in high productivity and optimized resource planning by the IT companies. Here, the IT companies will witness high utilization rate, thus reducing the 'bench' strength; especially at the time, when the number of projects are less.
- Customers will lean more toward multi-vendor approach, where a large portfolio will be distributed across different vendors. Though, this model is currently followed by some clients, it will gain prominence in the current year. This model ensures the distribution of risks for the customers, who are shaken by the Satyam's scam.
- Multi-vendor approach will definitely invite competition pressure, but there will be an 'opportunity in waiting' for the vendors.
- The projects will be more process oriented with heavy emphasis on transparency and data security. The outsourcing companies will try to avoid the data security issues that propped up in 2008.
- Till date, customers concentrated only on the project outcome. Now, they will also have their eye on their vendors performance as a company. The vendor's would also need to instill confidence in customers on any issue that may arise over the period.
- With allocations inclining more towards offshore., the Onsite-Offshore ratio will have an impact.
- With these heavy bailouts and treasury bond purchases, there is more chance of weakening US dollar and strengthening rupee. This will lead to change in pricing rates.
- There will be substantial opportunity in the consulting space. It will be a testing ground for the Indian companies.
- The next tier of western companies will consider outsourcing to save money and stay in the market.
- Finally, apart from India, other low cost destinations (China, Canada, Poland, Nigeria, East Asian countries..) will witness a considerable growth.
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1/27/09
How India avoided the economic crisis?
US and India were on the same boat during the real estate boom, but when the bubble burst, India was able to handle the downturn, while many of the US banks succumbed to it. What India did differently that saved its banks? NYtimes praises the former RBI governor for the effective measures that he took during his tenure, which eventually saved the Indian market. Before getting into the India story, lets briefly look at the incidents that brought down the US banks.
After the Internet bubble that burst during 2000-2001, the US stock market went down south and lost its lure as an investment platform. Many people were very reluctant to spend their money and the US was in the verge of a recession. So, to encourage spending among people and to infuse more liquidity, Fed reduced its interest rates. Eventually, the banks started giving more loans for the people to invest in houses. Those who were reluctant to invest money in the stock market, considered house as a safe-investment and invested in new houses; some bought their second house too. To attract the investors, the banks introduced the 'Adjustable Rate Mortgages' and people subscribed to it in huge numbers; loans were given to sub-prime borrowers . These were borrowers who were not eligible for the given loan amount and would default in their payment. So the loans accompanied high interest rates. Fueled by easy loans, the housing market grew rapidly over the period of time. This led to boom in the building industry which led to the over-supply. As over-supply always leads to lower prices, the housing prices started to reduce drastically followed by a few fore-closures.
So, to stabilize the market, the banks followed a different method to fund money. Here came Lehman and the other investment banks. All these mortgages were passed to these investment banks. Since these loans were generating some kind of money through high interest payments, those were considered as assets. The investment banks grouped these assets based on their Interest payment under the terms Mortgage Backed Securities (MBS) or Collateralized Debt Obligations (CDO). The CDOs were approved by credit rating agencies and were later insured by even AIG. So, these securities were sold to other investors around the world and the money generated out of those sales was shared by different parties involved in the transaction. So, these loans were generating good money. The greediness peaked here, and the investment banks needed more CDOs, which translated to more sub-prime loans to the customers. Remember, if the interest payment is high, the value of the CDO is also high. In this way, banks also benefited through these loans and it was money all over the wall street. Now, the market reached a point where the number of defaulters started to increase as the interest rates got higher and higher. This led to multiple foreclosures at a point as the loan value increased beyond the house value. This led to burst of the bubble and many banks failed as the borrowers were unable to pay the money. Now, the CDOs became worthless, so the Lehman and other investment banks too failed. Meanwhile, AIG which assured the CDOs were also in the verge of failure. It was later rescued by the government. The rest of the bad news were nothing but the domino effect.
Now coming to the India story, where did the Indian govt get it right?
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After the Internet bubble that burst during 2000-2001, the US stock market went down south and lost its lure as an investment platform. Many people were very reluctant to spend their money and the US was in the verge of a recession. So, to encourage spending among people and to infuse more liquidity, Fed reduced its interest rates. Eventually, the banks started giving more loans for the people to invest in houses. Those who were reluctant to invest money in the stock market, considered house as a safe-investment and invested in new houses; some bought their second house too. To attract the investors, the banks introduced the 'Adjustable Rate Mortgages' and people subscribed to it in huge numbers; loans were given to sub-prime borrowers . These were borrowers who were not eligible for the given loan amount and would default in their payment. So the loans accompanied high interest rates. Fueled by easy loans, the housing market grew rapidly over the period of time. This led to boom in the building industry which led to the over-supply. As over-supply always leads to lower prices, the housing prices started to reduce drastically followed by a few fore-closures.
So, to stabilize the market, the banks followed a different method to fund money. Here came Lehman and the other investment banks. All these mortgages were passed to these investment banks. Since these loans were generating some kind of money through high interest payments, those were considered as assets. The investment banks grouped these assets based on their Interest payment under the terms Mortgage Backed Securities (MBS) or Collateralized Debt Obligations (CDO). The CDOs were approved by credit rating agencies and were later insured by even AIG. So, these securities were sold to other investors around the world and the money generated out of those sales was shared by different parties involved in the transaction. So, these loans were generating good money. The greediness peaked here, and the investment banks needed more CDOs, which translated to more sub-prime loans to the customers. Remember, if the interest payment is high, the value of the CDO is also high. In this way, banks also benefited through these loans and it was money all over the wall street. Now, the market reached a point where the number of defaulters started to increase as the interest rates got higher and higher. This led to multiple foreclosures at a point as the loan value increased beyond the house value. This led to burst of the bubble and many banks failed as the borrowers were unable to pay the money. Now, the CDOs became worthless, so the Lehman and other investment banks too failed. Meanwhile, AIG which assured the CDOs were also in the verge of failure. It was later rescued by the government. The rest of the bad news were nothing but the domino effect.
Now coming to the India story, where did the Indian govt get it right?
- India didn't encourage the concept of sub-prime loans. Mortgages were issued based on just the borrower's income.
- When the land values were rising in India, then RBI governor Y.V.Reddy ordered the banks to stop issuing loans to raw lands.Without this ban, India would have got trapped in the bubble with its rising middle class income.
- Loan amount were released to the customers only after the development work was started.
- Indian banks were tempted heavily by the securitization method adopted by the US banks for funding money. But, the RBI governor was strict in rejecting the model. The Indian bankers who were critical of Reddy's tougher rules, later realized the reason behind the decisions. Meanwhile, the US equity firms funded the land purchases and got trapped into the bubble.
- Later, when the inflation increased, the governor increased the interest rates thus halting the housing frenzy.
- Apart from this, Indian regulators played a crucial in the stock market by bringing in tougher regulations. When the market was booming with voluminous funds from foreign investors, SEBI imposed tougher rules to limit and to regulate the funds.
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1/25/09
Infosys and IBM for Fidelity - Who will win?
After Citi group sold its BPO unit to TCS, it's Fidelity Investments which is filtering out the buyers for its Indian IT unit. It's now reported that, Infosys and IBM are the final runners to buy this division. Earlier Wipro, iGate and few other IT companies were also in the fray, but they moved out of the deal. Constraints in absorbing the entire 2000 fidelity employees were cited as the reason.
Now, between Infosys and IBM, the later is said to have a higher advantage as IBM has over $200mn contract with Fidelity compared to $50mn of Infosys. But, if fidelity looks for a better deal amount in this tough recession year, Infosys has a better hand to increase the deal amount with its huge cash reserves. Infy agreed to pay more for the deal amounting to $180 mn, which is $30mn more than IBM's proposal. Infosys which has just made two notable acquisitions(Expert systems and Philips BPO) , is desperate for a promising deal which is highly possible during this tough year.
It should be noted that, IBM has recently reported a over-whelming quarterly results ,which rallied the US stock market for that day. So IBM cannot be ruled out on low liquidity.
In terms of relationship, IBM has around 20 years of partnership with the company. Earlier in 2002, Fidelity and IBM formed a joint venture in providing employee benefit plans to external companies. As a part of the deal, fidelity absorbed 450 IBM employees. In this deal, IBM looked after the computer division.
But the area where Infy has some advantage is: Fidelity international has some considerable stake in Infosys. But, the stake's effect on the deal outcome is yet to be seen.
This sale came after Fidelity announced that its Gurgaon(Northern India) offshore center will be closed in the mid-September of 2008. It moved its operations to Chennai and Bangalore as it felt that the operational cost is low in the southern part of India. Also, it should be noted that Fidelity International made an announcement in 2008 that it will cut 1700 jobs in early 2009.
Tags: Infosys, IBM, Fidelity, Fidelity deal
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Now, between Infosys and IBM, the later is said to have a higher advantage as IBM has over $200mn contract with Fidelity compared to $50mn of Infosys. But, if fidelity looks for a better deal amount in this tough recession year, Infosys has a better hand to increase the deal amount with its huge cash reserves. Infy agreed to pay more for the deal amounting to $180 mn, which is $30mn more than IBM's proposal. Infosys which has just made two notable acquisitions(Expert systems and Philips BPO) , is desperate for a promising deal which is highly possible during this tough year.
It should be noted that, IBM has recently reported a over-whelming quarterly results ,which rallied the US stock market for that day. So IBM cannot be ruled out on low liquidity.
In terms of relationship, IBM has around 20 years of partnership with the company. Earlier in 2002, Fidelity and IBM formed a joint venture in providing employee benefit plans to external companies. As a part of the deal, fidelity absorbed 450 IBM employees. In this deal, IBM looked after the computer division.
But the area where Infy has some advantage is: Fidelity international has some considerable stake in Infosys. But, the stake's effect on the deal outcome is yet to be seen.
This sale came after Fidelity announced that its Gurgaon(Northern India) offshore center will be closed in the mid-September of 2008. It moved its operations to Chennai and Bangalore as it felt that the operational cost is low in the southern part of India. Also, it should be noted that Fidelity International made an announcement in 2008 that it will cut 1700 jobs in early 2009.
Tags: Infosys, IBM, Fidelity, Fidelity deal
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Why IT spending will not decrease in the finance sector
Finance industry being a huge contributor in the IT spending is in spotlight in this recession period. There are contradictory views in the sector on whether the IT spending will increase or not, which eventually contributes to outsourcing. Given the tight IT budget, let's see what is in the plate for the CIOs to deal with their IT division.
The biggest contributor in bank's IT spending propels from the new products, services and upgrading the IT systems to a newer technology. Considering the low consumer activity, the spending on services are now ruled out. Banks are reluctant in introducing new products, as they cannot a failure outcome. Ofcourse at this time, no bank would like to invest in the new technology or would prefer architectural change. Already, many projects which were initiated in the past year were put on hold or canceled.
All the traditional rooms of IT spending is almost closed now, but this tricky economic situation has opened up new avenues. After the housing market collapse, many banks were forced to merge with the larger banks and have contributed to consecutive mergers. Mergers would definitely require the integration of IT systems. Even if banks try to post-pone their integration plan to mitigate the cost, they cannot drag it beyond a point. Separate IT systems translate to more cost and also will reflect in their operational cost of bank centers. Apart from the expenditures on mergers, another new area is 'regulation'. Lack of regulation in the banks has been identified as the reason behind the current economic mess. The new government will definitely ensure that 'Regulation' plays a crucial role in the banks' operations. In order to comply with the new regulatory system, banks would need to alter their operating style and will definitely reflect in their IT systems. The new regulatory system may demand more transparency and interaction between the Banks and the federal regulatory agencies, which is possible only through new IT systems.
One other area which resulted in many bankruptcies is, the failure of the bank's management in foreseeing the current situation. Proper systems were not in place to analyze the available data and to forecast (or) to understand the trends in the money flow. This will require more detailed data from the banks divisions, which means more interactions between the various IT systems present in a bank. Having understood the crucial need of such systems, banks would definitely require investment in such systems or would require to change the model of the current functionality. These investments are inevitable and should be immediate to avoid another crisis. Another important area is, Risk management. It is clearly evident that the Risk management has failed and it badly requires a new direction. Considerable spending can be expected to revamp the system.
Not to forget the mid-sized banks, they will definitely try to grab its piece when the biggies failed. They will try to lure the customers with new services and innovative products which will trigger some IT spending. Though many of the above scenarios apply to banks in US and Europe, the relatively unaffected Asian banks are expected to increase their IT spending to tune their systems in this economic downturn.
Given the tight budget to implement the above changes, CIO has to make prudent decisions in their IT investment. There are banks which will spend more in IT to reduce the overall bank's operation cost. They will identify and remove the cost incurred by dead and redundant systems. Options will be explored to merge the system's functionality, thereby reducing the cost. But it requires more innovative approach in order to reduce the cost. But in innovations, there is always a risk of failure. The question is, whether the banks will take the new route despite the risk associated with it?
Given the amount of technology activity involved and layoffs that are underway, one could also expect more work to be outsourced. But banks which are yet to explore the outsourcing option may become reluctant to try this option at this juncture. But for sure, once can expect more IT activity in the finance sector.
Tags: Banking industry, Bank IT spending, Technology spending, Outsourcing
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The biggest contributor in bank's IT spending propels from the new products, services and upgrading the IT systems to a newer technology. Considering the low consumer activity, the spending on services are now ruled out. Banks are reluctant in introducing new products, as they cannot a failure outcome. Ofcourse at this time, no bank would like to invest in the new technology or would prefer architectural change. Already, many projects which were initiated in the past year were put on hold or canceled.
All the traditional rooms of IT spending is almost closed now, but this tricky economic situation has opened up new avenues. After the housing market collapse, many banks were forced to merge with the larger banks and have contributed to consecutive mergers. Mergers would definitely require the integration of IT systems. Even if banks try to post-pone their integration plan to mitigate the cost, they cannot drag it beyond a point. Separate IT systems translate to more cost and also will reflect in their operational cost of bank centers. Apart from the expenditures on mergers, another new area is 'regulation'. Lack of regulation in the banks has been identified as the reason behind the current economic mess. The new government will definitely ensure that 'Regulation' plays a crucial role in the banks' operations. In order to comply with the new regulatory system, banks would need to alter their operating style and will definitely reflect in their IT systems. The new regulatory system may demand more transparency and interaction between the Banks and the federal regulatory agencies, which is possible only through new IT systems.
One other area which resulted in many bankruptcies is, the failure of the bank's management in foreseeing the current situation. Proper systems were not in place to analyze the available data and to forecast (or) to understand the trends in the money flow. This will require more detailed data from the banks divisions, which means more interactions between the various IT systems present in a bank. Having understood the crucial need of such systems, banks would definitely require investment in such systems or would require to change the model of the current functionality. These investments are inevitable and should be immediate to avoid another crisis. Another important area is, Risk management. It is clearly evident that the Risk management has failed and it badly requires a new direction. Considerable spending can be expected to revamp the system.
Not to forget the mid-sized banks, they will definitely try to grab its piece when the biggies failed. They will try to lure the customers with new services and innovative products which will trigger some IT spending. Though many of the above scenarios apply to banks in US and Europe, the relatively unaffected Asian banks are expected to increase their IT spending to tune their systems in this economic downturn.
Given the tight budget to implement the above changes, CIO has to make prudent decisions in their IT investment. There are banks which will spend more in IT to reduce the overall bank's operation cost. They will identify and remove the cost incurred by dead and redundant systems. Options will be explored to merge the system's functionality, thereby reducing the cost. But it requires more innovative approach in order to reduce the cost. But in innovations, there is always a risk of failure. The question is, whether the banks will take the new route despite the risk associated with it?
Given the amount of technology activity involved and layoffs that are underway, one could also expect more work to be outsourced. But banks which are yet to explore the outsourcing option may become reluctant to try this option at this juncture. But for sure, once can expect more IT activity in the finance sector.
Tags: Banking industry, Bank IT spending, Technology spending, Outsourcing
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1/24/09
Tech Professionals - Salary survey
The job site for technology professionals 'Dice', has released its Annual salary survey for the year 2008-09 . Here are some highlights from its release:
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- Average pay increased by 4.5% compared to the previous ear
- Highest salary increase goes to Security Analysts followed by Software Engineers and Application Developers. Professionals in computer hardware field and internet services saw a good increase in their salary.
- Skills involving ABAP (Advanced Business Application Programming), ETL (Extract Transform and Load) and Business Intelligence received highest compensation.
- Keeping skills up to date - 22%
- Job elimination - 20%
- Lower salary increase - 14%
- Cancelled projects - 12%
- Increased work load due to staff cuts - 10%
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1/22/09
Michigan following the Indian style in outsourcing
IBM recently announced a new delivery center in Michigan and Iowa. This is quiet a contrary move by the big blue, which was setting up centers in India in the past years by creating around 80,000 jobs. IBM cited the low cost labors as one of the reasons in choosing the location. After this announcement, people started to wonder if outsourcing is taking a new path and Businessweek wondered if Michigan is the new India? Though, it is a good move for the local labors at the current job market, the scenarios under which IBM chose this location should be seen beyond the low cost factor.
Below are the advantages that have triggered IBM to setup centers in these states:
1. IBM is setting up this center in collaboration with Michigan state university, which means, easy availability of skilled professionals.
2. Both the states have offered IBM a incentive of $55 million over 10 years, along with a loan of $11.5 million dollars. Also, if IBM creates 1500 jobs as it pledged, then the entire loan amount will be waived.
3. IBM center will concentrate of maintaining and modernizing the government IT infrastructure.
4. IBM will operate in one of the building present in Michigan.
5. IBM will work with the Michigan University professors to include 'Application development' in the curriculum.
If you study these advantages carefully, it is the same set of points that have lured the companies to setup operation in countries like India and it would work in US too. Every IT company in India has been offered the same kind of special tax breaks, incentives, allocation of cheap lands for office space and software economic zones. The Indian IT companies are even conducting training classes in the colleges and working closely with universities, so that the students are market ready once they graduate. Probably, these two US state governments would have studied the reason for companies like IBM setting up centers in India and the support they receive from the Indian government. Having understood this, these US states have offered the same advantage to them in their home. Also, It has offered its own government projects to kick start the IT operation. It is a successful move! If every state in US follows the similar kind of approach in attracting the companies, it could create a renewed job market in the services sector for United States.It will also serve as a better alternative for companies that is resistant to move their IT operation beyond the borders. But, one pressing question here is the availability of computer science graduates that the service industry demands.
Tags:IBM, outsourcing, Michigan state university, Indian IT
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Below are the advantages that have triggered IBM to setup centers in these states:
1. IBM is setting up this center in collaboration with Michigan state university, which means, easy availability of skilled professionals.
2. Both the states have offered IBM a incentive of $55 million over 10 years, along with a loan of $11.5 million dollars. Also, if IBM creates 1500 jobs as it pledged, then the entire loan amount will be waived.
3. IBM center will concentrate of maintaining and modernizing the government IT infrastructure.
4. IBM will operate in one of the building present in Michigan.
5. IBM will work with the Michigan University professors to include 'Application development' in the curriculum.
If you study these advantages carefully, it is the same set of points that have lured the companies to setup operation in countries like India and it would work in US too. Every IT company in India has been offered the same kind of special tax breaks, incentives, allocation of cheap lands for office space and software economic zones. The Indian IT companies are even conducting training classes in the colleges and working closely with universities, so that the students are market ready once they graduate. Probably, these two US state governments would have studied the reason for companies like IBM setting up centers in India and the support they receive from the Indian government. Having understood this, these US states have offered the same advantage to them in their home. Also, It has offered its own government projects to kick start the IT operation. It is a successful move! If every state in US follows the similar kind of approach in attracting the companies, it could create a renewed job market in the services sector for United States.It will also serve as a better alternative for companies that is resistant to move their IT operation beyond the borders. But, one pressing question here is the availability of computer science graduates that the service industry demands.
Tags:IBM, outsourcing, Michigan state university, Indian IT
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1/17/09
Who is TN Manoharan
Indian Govt has announced Mr.T.N.Manoharan as the new Satyam Chairman:
Who is Mr.T.N.Manoharan. Below are some bullets which will give some light on his background:
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Who is Mr.T.N.Manoharan. Below are some bullets which will give some light on his background:
- He is a Chennai based person who had done his UG in Law and PG in commerce at Madras University.Hails from a freedom fighter's family with agriculture background.
- He was the president of ICAI, Institute of Charted Accountants of India.
- Manoharan is considered as one of the few experts in the Tax Audit, He has worte many books on Tax audit and Tax laws
- He had been the chairman and a board member for many accounting firms around the world.
- Played an important role in the amendment of Charted Accountants Act, 1949
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1/15/09
Is China a threat to Indian IT outsourcing industry?
Amidst the buzz in the Indian IT industry, articles started to prop on whether India is a safe destination for outsourcing. The next obvious question is, whether China will use the current situation to grab a pie out of the outsourcing deals.Yesterday, Mcckinsey has reported that China has an opportunity to grow its outsourcing industry at this juncture.It cites the reason that, in this economic crisis, many companies in the world are now looking to cut the costs by outsourcing their IT operation and China can benefit by this move. Along with this opportunity, the recent happenings in the Indian IT industry can be a bonus point for China.
But, can China really pull deals that are being outsourced to India? Where exactly does it stand in the Outsourcing Industry? As of today, Chinese IT sector is relying heavily on the projects from the booming manufacturing industries in china and also from the neighboring Japan. Since, China's manufacturing sector (the heart of its economy) has slowed down due to less demand in exports, the government has identified the outsourcing industry as the next engine and has vowed to pull foreign money to China through outsourcing. Also, it has planned to improve the small sized company to grow from its current proposition by awarding them projects and by building cities and towns dedicated to the outsourcing industry. But when it comes to projects from US and Europe, Chinese companies were working on low-end applications and testing projects. When western companies releases products, Chinese companies were asked to test them before the deployment. Now, things are getting changed. Companies have started working on mid size application development projects which is very much essential for developing domain knowledge and for getting bigger deals. Today, many of these developments projects comes to China from Japan and Korea.Also, if things improve, China can be a good alternative to companies that wants to de-risk their outsourcing strategy.Earlier today, SAP North Asia chairman joined Neusoft, the biggest Chinese outsourcing company. He is expected to overlook the International business. Neusoft in its website has called graduates and professionals to undergo its SAP training program.The Chinese companies are desperate on getting multinational deals to prove their expertise. All they need now is, one success story in a complex enterprise project, which will trigger the next wave in its IT industry.
Now, as a competitor to India, China has a long way to travel to catch up deals that are destined to India. Having understood the booming manufacturing sector in china, Indian companies like TCS, Infosys, Satyam has setup shops in china to pull projects from the Chinese Industries. Some Indian companies even bought the small sized Chinese companies, to understand the market and to merge themselves into the Chinese culture. These companies serve as a threatening competitor to the home grown companies. Also, though Chinese companies get projects from the western clients, the development work is more of product type (like networks, embedded systems etc..). For eg: the biggest outsourcing company Neusoft, according to its website, offers IT services on Network support, back office, data center and asset management. But, to thrive as an Indian competitor, the companies should get projects that are executed in the in-house IT department. These kind of ADM(Application, development and Maintenance) projects generates money and also help in acquiring further development projects. It also helps to gain knowledge in that particular business. Another important factor where China has both advantage and disadvantage is 'cost' The per hour rate offered by Chinese is less than India's rate, about 30% less. But there are lot of hidden costs which includes communication issues (More time, more rate), knowledge transferring time, data security protection and regulatory issues. These issues demands a completely new strategy for the western companies to kick start its outsourcing plans.
The happening issue in the Chinese industry is, the number of skilled professionals with good experience. Though, the number of computer graduates is more than India, the experienced professionals are fare less and that prevents them from acquiring the big pie. Chinese companies are badly in need of senior project managers and they are looking outside China to recruit or poach them. More than 80% of the IT professionals in China are with less than 5 yrs of experience ( 42% with less than 2 yrs). This was the situation with India, few years ago. But as the market grows, may be in another 10 years China will compete heavily with he Indian clients. At the same time, India would have produced more experienced professionals with higher domain (Finance, Retail, Telecom etc..) and architecture experience. But you cannot compare the China's current stage with India's early years. Indians' entrepreneurial approach helped to create thousands of small software companies, which later helped to produce skilled professionals. Also, the Y2K problem definitely served as a break point.Though, Chinese are growing in a steady phase, backing of Chinese government is so strong that it can be a great trigger. Working under the multiple government projects in various domains will definitely improve their skill level.
If Chinese grow in the current rate, there are more probable chances of India and China collaborating more in the future IT industry. There are two main reasons: 1) Indian IT professionals knowledge and global experience will be a great asset. Not using it will be a great mistake or it cannot be ignored 2) Indian companies presence in China. Today, Indian companies like Infosys and TCS have good reputation in Chinese markets. For example, the website www.seecoco.com is a hub for the IT pros in china. Here they discuss about their company, Salary etc. Already, Infosys is third in the satisfaction survey and even Satyam is ranked among the top 10. Here,it should be noted that, Indian companies are now only in the investment stage. In future, you can see a great level of cultural mixture in these companies.
Considering the Pros and Cons, China cannot be definitely ignored in the outsourcing industry. So is India. We will see India gaining domain and execution expertise over the years and China growing on technical side. So,it is not India or China. It is India and China. After all, dragon and elephant can never fight against each other.
Tags: chinese outsourcing, Indian IT industry, outsourcing, chinese outsourcing companies, IT industry, Infosys, TCS, indian outsourcing, Current Chinese IT outsourcing industry
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But, can China really pull deals that are being outsourced to India? Where exactly does it stand in the Outsourcing Industry? As of today, Chinese IT sector is relying heavily on the projects from the booming manufacturing industries in china and also from the neighboring Japan. Since, China's manufacturing sector (the heart of its economy) has slowed down due to less demand in exports, the government has identified the outsourcing industry as the next engine and has vowed to pull foreign money to China through outsourcing. Also, it has planned to improve the small sized company to grow from its current proposition by awarding them projects and by building cities and towns dedicated to the outsourcing industry. But when it comes to projects from US and Europe, Chinese companies were working on low-end applications and testing projects. When western companies releases products, Chinese companies were asked to test them before the deployment. Now, things are getting changed. Companies have started working on mid size application development projects which is very much essential for developing domain knowledge and for getting bigger deals. Today, many of these developments projects comes to China from Japan and Korea.Also, if things improve, China can be a good alternative to companies that wants to de-risk their outsourcing strategy.Earlier today, SAP North Asia chairman joined Neusoft, the biggest Chinese outsourcing company. He is expected to overlook the International business. Neusoft in its website has called graduates and professionals to undergo its SAP training program.The Chinese companies are desperate on getting multinational deals to prove their expertise. All they need now is, one success story in a complex enterprise project, which will trigger the next wave in its IT industry.
Now, as a competitor to India, China has a long way to travel to catch up deals that are destined to India. Having understood the booming manufacturing sector in china, Indian companies like TCS, Infosys, Satyam has setup shops in china to pull projects from the Chinese Industries. Some Indian companies even bought the small sized Chinese companies, to understand the market and to merge themselves into the Chinese culture. These companies serve as a threatening competitor to the home grown companies. Also, though Chinese companies get projects from the western clients, the development work is more of product type (like networks, embedded systems etc..). For eg: the biggest outsourcing company Neusoft, according to its website, offers IT services on Network support, back office, data center and asset management. But, to thrive as an Indian competitor, the companies should get projects that are executed in the in-house IT department. These kind of ADM(Application, development and Maintenance) projects generates money and also help in acquiring further development projects. It also helps to gain knowledge in that particular business. Another important factor where China has both advantage and disadvantage is 'cost' The per hour rate offered by Chinese is less than India's rate, about 30% less. But there are lot of hidden costs which includes communication issues (More time, more rate), knowledge transferring time, data security protection and regulatory issues. These issues demands a completely new strategy for the western companies to kick start its outsourcing plans.
The happening issue in the Chinese industry is, the number of skilled professionals with good experience. Though, the number of computer graduates is more than India, the experienced professionals are fare less and that prevents them from acquiring the big pie. Chinese companies are badly in need of senior project managers and they are looking outside China to recruit or poach them. More than 80% of the IT professionals in China are with less than 5 yrs of experience ( 42% with less than 2 yrs). This was the situation with India, few years ago. But as the market grows, may be in another 10 years China will compete heavily with he Indian clients. At the same time, India would have produced more experienced professionals with higher domain (Finance, Retail, Telecom etc..) and architecture experience. But you cannot compare the China's current stage with India's early years. Indians' entrepreneurial approach helped to create thousands of small software companies, which later helped to produce skilled professionals. Also, the Y2K problem definitely served as a break point.Though, Chinese are growing in a steady phase, backing of Chinese government is so strong that it can be a great trigger. Working under the multiple government projects in various domains will definitely improve their skill level.
If Chinese grow in the current rate, there are more probable chances of India and China collaborating more in the future IT industry. There are two main reasons: 1) Indian IT professionals knowledge and global experience will be a great asset. Not using it will be a great mistake or it cannot be ignored 2) Indian companies presence in China. Today, Indian companies like Infosys and TCS have good reputation in Chinese markets. For example, the website www.seecoco.com is a hub for the IT pros in china. Here they discuss about their company, Salary etc. Already, Infosys is third in the satisfaction survey and even Satyam is ranked among the top 10. Here,it should be noted that, Indian companies are now only in the investment stage. In future, you can see a great level of cultural mixture in these companies.
Considering the Pros and Cons, China cannot be definitely ignored in the outsourcing industry. So is India. We will see India gaining domain and execution expertise over the years and China growing on technical side. So,it is not India or China. It is India and China. After all, dragon and elephant can never fight against each other.
Tags: chinese outsourcing, Indian IT industry, outsourcing, chinese outsourcing companies, IT industry, Infosys, TCS, indian outsourcing, Current Chinese IT outsourcing industry
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1/14/09
Infosys results analysis
Below are some notable and interesting highlights from the Infosys third quarter results 2008-2009, especially the quarter in which the economic crisis gained the strength.
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- Though Infy succeeded in reducing the dependency on U.S in the past quarters, this quarter revenue from US rose to 64.5% ( It was 61.5% in the prev quarter and 62.5 a year back)
- Product sales saw a huge increase to 4.2% - it increased by 16% from the prev quarter
- As expected, Telecom business continued its decline. Its share came down to 16.7% - a 12% decrease. Manufacturing sector also saw a minor decrease(-2.5%) in its share.
- Onsite effort and revenue came down by around 1%
- Reflecting the job market, addition of trainees of decreased b 4000 ( note that freshers addition is more during the previous quarter, as it coincides with the end of the academic year)
- Utilization (excl. trainees) increased by 1%. Last quarter was down by 3%.
- Addition of lateral employees also got decreased. At the same, attrition also decreased by 1%
- Next to Bangalore, Pune has the most number of seats with 20K. Least number in India is from Jaipur with 990 seats
- The Revenue ending Dec 31 is Rs.5786 crores. It projected Rs.5519 - 5730 crores in the previous quarter.
- The company saw first ever sequential decline in dollar revenue from $1.17 from $1.22 billion in the prev quarter.
- Net profit rose by 33% Y-o-Y
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1/13/09
World Bank, Wipro, Satyam - how all this issue started suddenly?
Things are getting worse for Indian IT industry with blows from Economic crisis, World bank ban on Satyam, Satyam's fraud and back to World bank ban on Wipro, Megasoft and other mid size companies. Though, the IT industry isolated Satyam as one such incident, the news on Wipro's ban made the things quiet difficult. More than the ban, which is too trivial for wipro's revenue, the timing of the news is too bad for the industry.
Also, there is quiet a misconception among the people that World Bank(WB) has just banned the wipro, which is not true. Wipro was barred from the contracts inJune 2007, but the policy of world bank not to disclose information about any investigation inside world bank prevented it from reporting and this applies to the responsible company (Wipro). Now, it has changed its policy to report such incidents and so is the today's official announcement(see the actual mail) of the ban on Satyam, Wipro, Megasoft etc. But why did world bank changed its policy all of a sudden? This dates back to corruptions involved in world bank at various stages, which was reported in 2006 that around 20% percent of the loans given by WB ioves corrupt practices. The report said that, WB doesn't have good policy to reward staffs who reports corrupt practices in the bank but instead often punished them! The report adds that, after a corruption allegation of
$600, it took six years for the bank to start official investigation. It concluded that, WB need a reform program to address it's 'Failure of accountability'.
Later, various news kept floating on the corrupt practices in world bank, until when Fox news reported the biggest news that World Bank computers were repeatedly attacked by outsiders to retrieve sensitive data. It also added that these attacks were carried out for months. This news really alarmed the world, as many countries' sensitive monetary data resides in world bank. Later Fox also reported that an employee of the Indian IT company Satyam had a spyware installed in his computer which paved the way for the attackers. The allegation can be so easy that, Satyam had a dominating presence in the IT division of world Bank. So, according to FOX, only after its revelation on WB, the whistle blowing organization - GAP( the org which reported in 2006 about corrupt practices in WB) questioned World Bank about the data theft and bribing of the top official. At the investigation, the WB official revealed about the ban on Satyam, which was reportedly involved in bribery & spyware installations. Later, GAP-the whistle blower organization revealed Satyam's involvement in its website. GAP's announcement spread around over the past two months, which means World Bank's policy of not reporting investigations was overridden. This made them to change the policy and the result is the today's announcement. So is the revelation about Wipro. Wipro said that it provided shares to the WB staffs under its SEC approved program.
Also Read: Now, Is China a threat to Indian IT industry?
Here's some interesting news about Mohamed Muhsin who was said to be bribed by Satyam: When the investigation on him started back in 2006 on his involvement in Satyam, this is what the bank official had to say about him: "He was a very competent guy" and "He really turned around the IT [information technology] operation. It was a mess." As I had mentioned earlier, it was Satyam which was in total control of world Bank's IT operation.
Tags: wipro, wipro world bank, satyam world bank, mohamed muhsin, world bank corruption
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Also, there is quiet a misconception among the people that World Bank(WB) has just banned the wipro, which is not true. Wipro was barred from the contracts inJune 2007, but the policy of world bank not to disclose information about any investigation inside world bank prevented it from reporting and this applies to the responsible company (Wipro). Now, it has changed its policy to report such incidents and so is the today's official announcement(see the actual mail) of the ban on Satyam, Wipro, Megasoft etc. But why did world bank changed its policy all of a sudden? This dates back to corruptions involved in world bank at various stages, which was reported in 2006 that around 20% percent of the loans given by WB ioves corrupt practices. The report said that, WB doesn't have good policy to reward staffs who reports corrupt practices in the bank but instead often punished them! The report adds that, after a corruption allegation of
$600, it took six years for the bank to start official investigation. It concluded that, WB need a reform program to address it's 'Failure of accountability'.
Later, various news kept floating on the corrupt practices in world bank, until when Fox news reported the biggest news that World Bank computers were repeatedly attacked by outsiders to retrieve sensitive data. It also added that these attacks were carried out for months. This news really alarmed the world, as many countries' sensitive monetary data resides in world bank. Later Fox also reported that an employee of the Indian IT company Satyam had a spyware installed in his computer which paved the way for the attackers. The allegation can be so easy that, Satyam had a dominating presence in the IT division of world Bank. So, according to FOX, only after its revelation on WB, the whistle blowing organization - GAP( the org which reported in 2006 about corrupt practices in WB) questioned World Bank about the data theft and bribing of the top official. At the investigation, the WB official revealed about the ban on Satyam, which was reportedly involved in bribery & spyware installations. Later, GAP-the whistle blower organization revealed Satyam's involvement in its website. GAP's announcement spread around over the past two months, which means World Bank's policy of not reporting investigations was overridden. This made them to change the policy and the result is the today's announcement. So is the revelation about Wipro. Wipro said that it provided shares to the WB staffs under its SEC approved program.
Also Read: Now, Is China a threat to Indian IT industry?
Here's some interesting news about Mohamed Muhsin who was said to be bribed by Satyam: When the investigation on him started back in 2006 on his involvement in Satyam, this is what the bank official had to say about him: "He was a very competent guy" and "He really turned around the IT [information technology] operation. It was a mess." As I had mentioned earlier, it was Satyam which was in total control of world Bank's IT operation.
Tags: wipro, wipro world bank, satyam world bank, mohamed muhsin, world bank corruption
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1/12/09
9 hottest IT skills
Computerworld has listed out the hottest IT skills for 2009:
1.Programming/application development
2.Help desk/technical support
3.Project management
4.Networking
5.Business intelligence
6.Security
7.Web 2.0 8.Data center
9.Telecommunications
Read the full article for the desired skills for the above positions.
Tags: IT skills, Hot IT skills, top IT skills, IT skills 2009
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1.Programming/application development
2.Help desk/technical support
3.Project management
4.Networking
5.Business intelligence
6.Security
7.Web 2.0 8.Data center
9.Telecommunications
Read the full article for the desired skills for the above positions.
Tags: IT skills, Hot IT skills, top IT skills, IT skills 2009
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1/11/09
What really happened in satyam
Ramalinga Raju's confession with low revenue numbers can be interpreted as either -
The growth of satyam has drastically reduced over the time, which means less clients/projects (or)
Satyam did manage good business but the money was used inappropriately.
If Satyam's growth has reduced drastically (read as less clients), the effect would have been evident across the company. The resultant indication would be less project and more people on bench. If this is the case, then every Industry vertical manager/employees could have felt the effect in his domain. But, there were no news in the past on Satyam employees on bench in big numbers (or) atleast the employees did not feel the effect. Here, one should remember that Satyam's Chief strategy officer and Satyam BPO's CEO 'resigned' on October 2008. The reason behind their resignation was believed due to 'organizational restructuring!'
Also read: World Bank Issue, Satyam, Wipro - How all these started suddenly?
Now on the other side: if satyam had good business( which is highly likely), the possible scenario is improper use of profits generated by satyam computers. The founder's family owned Maytas properties which was founded only in 2005, was in news for multiple projects like Residential building, ports, SEZ, harbor etc. Here raises the doubt: Did Raju invest heavily through Maytas lured by the booming real estate market in the past years?Any bad investment in the real estate sector would have sucked the money of satyam in this slowing economic growth. Apart from real estate, Raju is said to be an aggressive investor who had dropped his money in failed dotcom companies.
This is evident from one of the quarterly results announcements from satyam:
"........the Rs 152-crore provisioning covers losses posted by subsidiaries and sunk costs in dotcom ventures and start-ups. Subsidiary VisionCompass accounts for Rs 126 crore of this provisioning, investments in dotcoms and start-ups make up the rest......."
Did he use satyam's money in multiple ventures? Uday kotak of Kotak Mahindra mentioned that, Satyam didnot give a satisfactory answer on the two thousand crores of money that was present in the current account instead of 'Savings account' which would have earned good interest for satyam.
So, did Raju used the 'candid confession' in the resignation letter as a tool to divert from the actual scenario? May be there is something more than what he wrote . It is now in the hands on how effectively the interrogation proceeds.
Read: Satyam founder, Raju's Letter - Highlights
Tags: Ramalinga raju,satyam update,satyam, Satyam fraud
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1/10/09
Irresponsible media reports - Infosys comment on Satyam
This is one other example of ridiculous reporting by media on Infosys' comments on Satyam, which caused outrage by Satyam employees and readers against Infosys. Read the actual statements and the media's version:
Below are the actual statements in quotes:
Mohandas Pai, HR, Infosys: “We have asked our recruitment staff not to poach anybody from Satyam. The company is in the middle of a crisis and people will jump ship”.
Narayana Murthy, Infosys: "We will not touch such a tainted company" - on Satyam's takeover.
With these statements, the shameless media in an attempt to display a sensational headline, reported their own version. The websites and television ran headline that "Infosys will not hire Satyam employees" , "We will not hire anybody from Satyam -Infosys", which is not the actual case. Also, a media cited an unidentified source saying ".....a person familiar with the matter, who asked not to be named, said that Infosys would refrain from even hiring domain experts or project managers from Satyam"
All these modified versions caused an outrage form Satyam employees, blogs and other readers. The reporting was altered to the extent that the readers thought, Murthy referred the employees as tainted. (Evident from the article comments)
If you read Pai's statement, even a sporadic reader will understand that, Pai asked his staffs to avoid Poaching (which is the practice of recruiting people from other companies by offering inducements) .
This is something every other IT company should follow for Satyam to recover from this mess, with the help of a new management. Infosys can easily offer employment/higher salaries for client managers, project managers ( especially the skilled SAP developers/consultants, the area where Satyam has its strong hold and the same area where Infy is aspiring to outgrow).
But,employees holding these responsible positions, engages with the customer directly/indirectly. Only these people could convince their customer that, Satyam will bounce back from its current situation. Poaching these employees would easily result in losing the customers, which will directly affect the jobs of many Satyam employees who are engaged under a client.
In this scenario, Infosys and other companies can easily employ few hundreds/close to few thousands, but no one can absorb 53,000 employees. Only if the clients remain engaged, Satyam can ensure the jobs for its employees. Best anyone IT company should do is, to help satyam by not disturbing their next strategy. Having understood this, any responsible company would not poach at this juncture. Infosys had made a responsible statement and media in its desire to make a sensational news, intentionally misconstrued the statement.
Now, coming to Murthy's statement, any businessman will hesitate to takeover a company whose value is unlnown even to its top management. Infosys being a prudent company in takeover and mergers, have so far acquired only one company as a whole, in its 27 years of operation.In this economic scenario, most of the companies have either deferred/canceled their acquisition. How would anyone can expect to acquire a scandalous company completely?. In this recession period, it would be difficult for any management to stabilize and run a loss making company.
But there are very likely hood of satyam's industry verticals to be acquired by different companies. This would be the best option for the innocent employees who were brought down to this situation.
Update: Murthy clarifies his statement
Tags: Satyam, Infosys,Infosys comments, Satyam jobs, Satyam update, Satyam fraud
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Below are the actual statements in quotes:
Mohandas Pai, HR, Infosys: “We have asked our recruitment staff not to poach anybody from Satyam. The company is in the middle of a crisis and people will jump ship”.
Narayana Murthy, Infosys: "We will not touch such a tainted company" - on Satyam's takeover.
With these statements, the shameless media in an attempt to display a sensational headline, reported their own version. The websites and television ran headline that "
All these modified versions caused an outrage form Satyam employees, blogs and other readers. The reporting was altered to the extent that the readers thought, Murthy referred the employees as tainted. (Evident from the article comments)
If you read Pai's statement, even a sporadic reader will understand that, Pai asked his staffs to avoid Poaching (which is the practice of recruiting people from other companies by offering inducements) .
This is something every other IT company should follow for Satyam to recover from this mess, with the help of a new management. Infosys can easily offer employment/higher salaries for client managers, project managers ( especially the skilled SAP developers/consultants, the area where Satyam has its strong hold and the same area where Infy is aspiring to outgrow).
But,employees holding these responsible positions, engages with the customer directly/indirectly. Only these people could convince their customer that, Satyam will bounce back from its current situation. Poaching these employees would easily result in losing the customers, which will directly affect the jobs of many Satyam employees who are engaged under a client.
In this scenario, Infosys and other companies can easily employ few hundreds/close to few thousands, but no one can absorb 53,000 employees. Only if the clients remain engaged, Satyam can ensure the jobs for its employees. Best anyone IT company should do is, to help satyam by not disturbing their next strategy. Having understood this, any responsible company would not poach at this juncture. Infosys had made a responsible statement and media in its desire to make a sensational news, intentionally misconstrued the statement.
Now, coming to Murthy's statement, any businessman will hesitate to takeover a company whose value is unlnown even to its top management. Infosys being a prudent company in takeover and mergers, have so far acquired only one company as a whole, in its 27 years of operation.In this economic scenario, most of the companies have either deferred/canceled their acquisition. How would anyone can expect to acquire a scandalous company completely?. In this recession period, it would be difficult for any management to stabilize and run a loss making company.
But there are very likely hood of satyam's industry verticals to be acquired by different companies. This would be the best option for the innocent employees who were brought down to this situation.
Update: Murthy clarifies his statement
Tags: Satyam, Infosys,Infosys comments, Satyam jobs, Satyam update, Satyam fraud
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1/9/09
Satyam update -
Satyam News update in chronological order:
Check this: Satyam Fact Sheet
Also Read: Now, Is China a threat to Indian IT industry?
Latest Satyam updates:
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Check this: Satyam Fact Sheet
Also Read: Now, Is China a threat to Indian IT industry?
Latest Satyam updates:
- Satyam's board members on youtube channel
- 'We are open to strategic acquisition of Satyam' - HCL
- L&T raises its stake in Satyam to 12%
- Satyam clients seek clarity, won’t terminate deals just yet
- Genpact, Quatrro ‘interested’ in parts of Satyam biz
- L&T front-runner for Satyam buy
- State Farm Insurance terminates Satyam contract
- TN Manoharan named chairman of Satyam computers
- Indian Govt to pick Chairman and board members for Satyam
- Satyam appoints KPMG, Deloitte as new auditors
- Roses, posters, prayers for jailed Satyam chief
- Satyam CEO,CFO should be the insiders: Govt
- Satyam can mortgage assets
- TCS not for hiring from Satyam
- Satyam receivables Rs.1700 Cr - Parekh (newly appointed board member)
- Mynampati sends SoS to govt for Rs 150 cr urgent relief
- New Auditors for Satyam
- No plans for Satyam bailout - Govt
- Satyam staff: The smiles are back, nervously
- ICICI restores credit limit of Satyamites
- NDA govt blocked Satyam probe in ’01’
- PM steps in.
- Govt. orders SFIO probe into Satyam scam
- AP CM - top priority is to protect jobs
- IGate May Seek Merger With Satyam If Board Sells - Phaneesh Murthy
- CFO's confession - blames PWC and Raju
- Parekh, Karnik, Achuthan named on Satyam board
- We will not poach the clients, still cant say 'NO' - IT Majors
- Murthy clarifies his statement
- Raju sent to central prison; CFO Vadlamani arrested
- Don't poach Satyam workers: Nasscom
- Uday Kotak: ‘we had given a small clue’
- LIC, Lazard may get board seat in Satyam.
- India Satyam chairman in judicial custody to Jan 23
- Indian government takes control of Satyam's board
Text of statement given by Corporate Affairs Minister on Satyam board disbanding - Ramalinga Raju arrested
- Company sends mail promising jobs safe, yet staff wonder -Turnoff TVs and dont believe rumours: company says in a E-mail
- No Salary for two months : Email from management/Satyam declines
There are many options open for Satyamites Satyamites lash back at reactions from industry veterans - H its back at Murthy and Mohandas Pai - AP govt mulls bailout package for Satyam
- Newyork Times reports that Accenture and IBM to benefit ftom Satyam's fallout
- Clients standing by Satyam: Interim CEO
- L&T sees synergy with Satyam, but won't invest now
- In Raju's hometown, big panic for small investors
- 'Regulatory bodies ignored warnings on Satyam'
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Infy not to hire Satyam employees Read the actual statementsCan Satyam pay salaries to staff? - US law firms file ‘class-action’ suits against Satyam
- Govt yet to decide on the fate of satyam
- Satyam crisis output: 17,000 job seekers
- Satyam executives try to reassure wary investors
Australian cos in disarray over IT export to India - Resignations fly thick and fast on Day II
Satyam campus recruits may never join Satyam may axe 10,000 employees next month Govt orders inspection of 8 Satyam subsidiaries
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1/8/09
Infosys to benefit from Satyam's fiasco.
Forbes reports that Infosys could benefit from the trouble caused by Satyam. It quotes analyst's comment on the situation:
These are the areas which could benefit Infosys:
1. Satyam's case has caused a lot of apprehension and doubts for the customers on the other Indian IT companies. Infosys being a brand for corporate governance can highly benefit, if the clients keeps governance as one of the their top priority in choosing their provider. At least, Infosys need not work much to showcase their transparency. Infosys has received ten consecutive yearly awards from 'Charted Accountants of India' for 'The Best Annual Report'. On the other hand, Satyam was also awarded 'The Golden peacock award for Corporate governance 2008', the same year when it manipulated its books. It is now considered for removal.
2. Once Infosys and Satyam competed heavily for Qantas airways deal, in which Infy was desperate. But Satyam finally got the cake. Now, Qantas is in a mood to find an 'external arrangement' if the situation gets worse with Satyam. So will Infosys try this again?
3. Another big opportunity is SAP. Recently, Infosys and Satyam were jointly recognized as 'SAP Global service partners' by SAP, Germany. Notably, Enterprise solutions is a big chunk for Satyam, contributing 45% of Satyam's revenues. So, the next direct competitor is Infosys.
4. Infosys lags behind in the automobile sector when compared to Satyam. Once Satyam had reported that it has eight of the top ten automobile companies as its clients. This is one area where Infy can start looking at seriously. Also, Telecom business is an other vertical where Infosys had reported negative growth and can try to pull of some clients from Satyam. Though Satyam's telecom pie is small, it should be prospective for Infosys. Here, Telcom intensive Tech Mahindra is also after Satyam's business.
Tags: Satyam, Infosys, Qantas, Outsourcing, IT, Satyam Fraud,Satyam competitor
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These are the areas which could benefit Infosys:
1. Satyam's case has caused a lot of apprehension and doubts for the customers on the other Indian IT companies. Infosys being a brand for corporate governance can highly benefit, if the clients keeps governance as one of the their top priority in choosing their provider. At least, Infosys need not work much to showcase their transparency. Infosys has received ten consecutive yearly awards from 'Charted Accountants of India' for 'The Best Annual Report'. On the other hand, Satyam was also awarded 'The Golden peacock award for Corporate governance 2008', the same year when it manipulated its books. It is now considered for removal.
2. Once Infosys and Satyam competed heavily for Qantas airways deal, in which Infy was desperate. But Satyam finally got the cake. Now, Qantas is in a mood to find an 'external arrangement' if the situation gets worse with Satyam. So will Infosys try this again?
3. Another big opportunity is SAP. Recently, Infosys and Satyam were jointly recognized as 'SAP Global service partners' by SAP, Germany. Notably, Enterprise solutions is a big chunk for Satyam, contributing 45% of Satyam's revenues. So, the next direct competitor is Infosys.
4. Infosys lags behind in the automobile sector when compared to Satyam. Once Satyam had reported that it has eight of the top ten automobile companies as its clients. This is one area where Infy can start looking at seriously. Also, Telecom business is an other vertical where Infosys had reported negative growth and can try to pull of some clients from Satyam. Though Satyam's telecom pie is small, it should be prospective for Infosys. Here, Telcom intensive Tech Mahindra is also after Satyam's business.
Tags: Satyam, Infosys, Qantas, Outsourcing, IT, Satyam Fraud,Satyam competitor
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Satyam - update
After posting the events that shook Satyam in 2008, I didn't expect the next day to be so big. Satyam CEO has confessed that he manipulated the quarterly reports for years with high numbers. He cited slow growth and competition pressure had pushed him to manipulate the books.
Read the confession letter from Raju:
CLICK HERE FOR SATYAM UPDATES
Highlights from his letter:
Meanwhile, Satyam stocks got removed from the National Stock Exchange(NSE) as its market cap plunged. But, it is still on BSE.
Tags: Satyam, Satyam fraud, Ramalinga Raju, Raju letter, Satyam fraud
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Read the confession letter from Raju:
CLICK HERE FOR SATYAM UPDATES
Highlights from his letter:
- Q2's actual revenue was Rs.2112 Crore against the reported Rs.2700 Crore. Also, the operating margin was Rs.61 Cr against Rs.649 crore
- Q2 alone had artificial balance of Rs.588 Cr
- To justify the operating margin, he wanted to show some real assets. That's when Maytas Acquisition was tried out.
- In the past two years, Raju arranged Rs.1230 Crore to run the company. This was not reported in any balance.
- He didn't take a penny from the company.
- He didn't sell a share in the past eight years.
- Company is open to mergers, Merrill Lynch will be the choice for this task.
- Ram Mynampati will be the interim CEO.
- He is ready to subject himself to the law of the land.
Meanwhile, Satyam stocks got removed from the National Stock Exchange(NSE) as its market cap plunged. But, it is still on BSE.
Tags: Satyam, Satyam fraud, Ramalinga Raju, Raju letter, Satyam fraud
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1/7/09
Satyam – spotlight!
After several pitfalls, today a news report emerged stating that, Tech Mahindra is planning to merge with Satyam. This news propelled both the stocks between 7 to 10 percent. Though, Satyam rubbed off the report during the mid-day, Tech Mahindra denied only after the market hours. This has become a common routine in the stock market, whenever a company fails, rumors/reports propels the share price. Earlier, news floated around that HCL, Cognizant, Mindtree are considering a merger.Below are the series of events that made Satyam to be in the spotlight:
• FOX news reported that Satyam Computer Services was barred by World Bank in doing any business, which was reportedly imposed from Feb 2008. This is effective for next Eight years. According to Fox, Satyam was responsible for financial wrong doing and data stealing. Though, analysts say that it may be highly exaggerated.
• Satyam announced the $1.6 billion acquisition of Maytas Infra and Maytas properties (Real-Estate firms) owned by the founders and family members ( Satyam spelled backwards is ‘Maytas’). Further, it stated that, it doesn’t need shareholders' approval as the acquisition is a good strategy! However shareholders dumped the stock to its low, which forced the founders to pull pack their decision in nine hours.
• Brokerages issued aggressive ‘sell’ calls on Satyam’s stock, which worsened the situation. The shareholders lost confidence on the board, wondering on how the board allowed the acquisition. If so, is the board really independent?
• Amidst the big setbacks, Satyam’s old client Upadi system filed a lawsuit in the Texas count against the acquisition of Maytas Infrastructure Ltd.
• Meanwhile, World Bank blamed Satyam “for providing improper benefits to the bank staff and for failing to maintain documentation to support fees charged for its subcontractors.”
• Satyam demanded an apology from World Bank for damaging its name, which ofcourse was not accepted by World Bank.
• Dampening Satyam’s business, International research firm Forrester issued a report that Satyam’s clients should review their contract if the management issues are not resolved in the next nine months.
• Satyam’s Independent director Dr.Mangalam Srinivasan resigned from the board.
• Despite the Management’s request, Satyam’s employees(including senior management) started looking out for other opportunities.
• Now, in the news for multiple mergers reports with various Indian and International IT firms.
More: Satyam Update.
Read: What went wrong at the 'deal'
The other side: World Bank corruption
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1/5/09
Who is Mr.Madoff?
Recently, many would have heard about the Madoff scandal which amounted to $50 billion. This would not have timed better, especially during this turbulent times. But, this scandal cannot be exposed when the money is flowing regularly, so is the nature/model of the scandal.
Bernard Madoff is a former chairman of NASDAQ stock exchange and founder of a wall-street based investment firm Bernard L. Madoff Investment Securities LLC. Madoff roped in investors to his firm, citing the regular strategy of investing in stocks and indexes. Madoff firm’s was able to give consistent returns (rather than voluminous profits) that made investors to think it as a safe investment. Investors include major European banks, celebrities and independent firms. Everything was going fine until the suspicion rose to its peak, when he paid his investors with consistent profit, even during the year 2008, when the markets were bleeding. So investigators started drilling him and that’s when they uncovered a historic scandal in the financial Industry.
So what is the scandal?
His strategy/scandal is something similar to Ponzi Scheme. A Ponzi scheme is a fraudulent investment operation that pays returns to investors out of the money paid by subsequent investors rather than from profit. Madoff tweaked the Ponzi scheme to suit the securities sector. When an investor pays money to Madoff to invest in certain stocks, he will use the investor’s money to buy shares under his firm’s name. If the stock fails miserably, he will show them as a loss to investor. In case, the investor requires money and demands Madoff, he will use other investor’s money to pay him. Although, he will manipulate the customer’s report to disguise that the stock are invested under their name.
This scandal will not be exposed unless the investment is less than the payments demanded by the clients. Moreover, he maintained his investment strategy as a secret and would not divulge it. Investors did not care much, as they got the required money whenever demanded. But the light was heavy on him and he looked odd, when his investors got consistent profit at the time of market going south. This led to investigation, arrests etc..
Analysts are unable to predict on when exactly Madoff started to adopt this scandalous scheme. There are speculations that he was too good with the profits in the early days, that he don’t want to loose down and it’s when he started to manipulate the money flow.
This scandal was not exactly unnoticed. According to NY times, Mr. Markopolos wrote to US Security Exchange commission (SEC) that “Madoff Securities is the world’s largest Ponzi Scheme.” SEC’s cursory investigation pronounced him free of fraud. Thought, now SEC defends that, its primary role is to protect investors and not regulation.
By the way, Ponzi scheme is something you can vaguely relate to Multi-level marketing!
Read the Economist article
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Bernard Madoff is a former chairman of NASDAQ stock exchange and founder of a wall-street based investment firm Bernard L. Madoff Investment Securities LLC. Madoff roped in investors to his firm, citing the regular strategy of investing in stocks and indexes. Madoff firm’s was able to give consistent returns (rather than voluminous profits) that made investors to think it as a safe investment. Investors include major European banks, celebrities and independent firms. Everything was going fine until the suspicion rose to its peak, when he paid his investors with consistent profit, even during the year 2008, when the markets were bleeding. So investigators started drilling him and that’s when they uncovered a historic scandal in the financial Industry.So what is the scandal?
His strategy/scandal is something similar to Ponzi Scheme. A Ponzi scheme is a fraudulent investment operation that pays returns to investors out of the money paid by subsequent investors rather than from profit. Madoff tweaked the Ponzi scheme to suit the securities sector. When an investor pays money to Madoff to invest in certain stocks, he will use the investor’s money to buy shares under his firm’s name. If the stock fails miserably, he will show them as a loss to investor. In case, the investor requires money and demands Madoff, he will use other investor’s money to pay him. Although, he will manipulate the customer’s report to disguise that the stock are invested under their name.
This scandal will not be exposed unless the investment is less than the payments demanded by the clients. Moreover, he maintained his investment strategy as a secret and would not divulge it. Investors did not care much, as they got the required money whenever demanded. But the light was heavy on him and he looked odd, when his investors got consistent profit at the time of market going south. This led to investigation, arrests etc..
Analysts are unable to predict on when exactly Madoff started to adopt this scandalous scheme. There are speculations that he was too good with the profits in the early days, that he don’t want to loose down and it’s when he started to manipulate the money flow.
This scandal was not exactly unnoticed. According to NY times, Mr. Markopolos wrote to US Security Exchange commission (SEC) that “Madoff Securities is the world’s largest Ponzi Scheme.” SEC’s cursory investigation pronounced him free of fraud. Thought, now SEC defends that, its primary role is to protect investors and not regulation.
By the way, Ponzi scheme is something you can vaguely relate to Multi-level marketing!
Read the Economist article
Read rest of the entry...
1/3/09
Explanation of the code that froze Zune 30
I always have a habit of browsing the hot searches in Google trends, which has the list of most searched item for that day. On Dec 31st morning, I found too many Zune related searches(Zune lockup, Zune no display, Zune issue etc...) in Google. Initially, I wondered if Zune introduced a new product and users found product issues! At that moment, I could not think of any other reasons for the voluminous Zune related searches on a particular day. So, my obvious next stop is the Zune website, where I found the acknowledgment from Microsoft that there is an issue with the existing Zune 30GB version and is being worked out.
Below is the code logic that froze the Zune 30GB version on Dec 31st, 2008. The Zune hardware clock stores the time in the format of 'No of days and seconds' since 1980( Eg: 1835 days, 19999 seconds) So,when the Zune is switched 'ON' and the software starts accessing the hardware clcok, then the 'total number of days etc..' are converted to actual year, month, date, time etc. For instance, 735 days will be year 1982 and Jan 5th. The leap year should be taken into account, while performing this conversion.
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Below is the code logic that froze the Zune 30GB version on Dec 31st, 2008. The Zune hardware clock stores the time in the format of 'No of days and seconds' since 1980( Eg: 1835 days, 19999 seconds) So,when the Zune is switched 'ON' and the software starts accessing the hardware clcok, then the 'total number of days etc..' are converted to actual year, month, date, time etc. For instance, 735 days will be year 1982 and Jan 5th. The leap year should be taken into account, while performing this conversion.
Now, to the code bit which calculates the actual year with the number of days:
year = ORIGINYEAR; /* = 1980 */
--step 1
while (days > 365)
{
--step 2
if (IsLeapYear(year))
{
--step 3
if (days > 366)
{
--step 4
days -= 366;
year += 1;
}
}
else
{
--step 5
days -= 365;
year += 1;
}
}
In the above code, on a non-leap year, the code with 'the number of days' will get into step 1, step2 and will jump to the 'else' clause in step 5 (being a non-leap year). In Step5, the number of days will be decremented by 365 and it will add upto 1 year upon each substraction.
Whereas, during a leap year, on the last day (ie 366th day), the code will get intostep1, step2, step 3 and it checks for the condition,
--step 3
if (366 > 366)
{
Since there is no 'Else' (or) 'Break' conditon, the flow will do nothing and just stands by!, which caused the Zune to freeze its operation.
This code will not cause issue, when you restart the Zune on the next day.
Category: $Programming$
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