|INFOTECH INDIA | Tech Briefs:
TCS, Infosys See Signs of Recovery on Order Flow | HP Captures 18 Percent Share of India's PC Market | WIPRO: Outsourcing to Benefit | GOOGLE: No Control | INFOSYS: New Securities | Yahoo! Eyes India | TATA CONSULTANCY: New Center | IBM to Invest
TCS, Infosys See Signs of Recovery on Order Flow
India’s top two software exporters TCS and Infosys are seeing the first signs of an economic recovery as their top customers start discussing outsourcing contracts in order to further reduce their operational expenses. For instance, customers of Infosys, which signed an over $100 million contract with Australian phone firm Telstra earlier this month, are now saying that the worst may be behind them.
“There is a lot more confidence among our clients; they feel that the worst is behind them. Especially in the U.S., many customers are saying that they were aggressive in reacting (to the recession)— they cut costs and renegotiated contracts,” S. Gopalakrishnan, chief executive of Infosys, told the Economic Times.
In a year when both Infosys and TCS have cautioned their investors on lower to negative growth in revenues, India’s $40-billion software exports industry is going through one of the toughest recessions in over two decades.
TCS, which counts Citigroup and GE among its top customers, is also seeing the first signs of recovery when it comes to the IT spending.
“We are seeing a recovery, but at a slow pace. The overall decline is slowly getting arrested. The recovery is showing but can’t predict the slope of this recovery,” N. Chandrasekaran, chief operating officer, TCS, told the Economic Times.
Despite financial problems and tightened IT budgets customers continue to work with offshore outsourcing companies in order to lower their operational costs anywhere between 20-30 percent.
HP Captures 18 Percent Share of India's PC Market
Hewlett-Packard improved its market share in the first quarter to continue its lead in the India PC personal computer space, according to technology research firm IDC.
HP captured 18.2 percent of the India PC market in terms of unit shipments in the January-March period, an IDC India report said. The PC maker had a 15.6 percent share in the previous (October-December) quarter. HP has been numero uno in the India PC market consistently every quarter over the past four years. With a market share of 9.8 percent in overall PC shipments, HCL Infosystems regained the second spot, after losing out to Dell in the October-December quarter. Dell slipped back to the third spot with a share of 9.7 percent in the first quarter this year, IDC said in a release.
The India PC market witnessed a 7 percent quarter-on-quarter growth in shipments in Q1 of 2009. A total of 16.79 million units of desktops and laptops were shipped during the January-March quarter of 2009.
Desktop PC shipments of 12.13 lakh registered a sequential growth of 9 percent, while laptop shipments of 4.66 lakh units grew 3 percent QoQ.
The research firm said the market share, over the next two quarters, would depend on how well PC vendors capitalize on opportunities in the consumer, education and government segments in India.
In Q1 2009, fourth-placed Acer’s market share dipped marginally to 7.3 percent. Fifth-ranked Lenovo showed a more pronounced drop — its share came down to 4.7 percent in Q1 2009 from 6.6 percent in the previous quarter.
WIPRO: Outsourcing to Benefit
The turmoil in the financial market is likely to spell good news for the Indian outsourcing companies, as the downturn will compel multinationals to seek further economies for sustenance in these tough times, Wipro Technologies founder Azim Premji has said.
In an interview to the Sunday Times, Premji insisted that “the Indian outsourcing giants will benefit from this downturn, as all multinationals seek further economies.”
Premji's statement comes at a time when U.S. President Barack Obama has proposed changes in tax laws to curb outsourcing.
Obama, proposing change in tax laws of the country, had reportedly said, “It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.”
Premji also voiced its concern about the “creeping tide of protectionism” in the West and said that “if we get into protectionism, then the West is going to get a wave of protectionism in response, and that is going to turn back the clock 20 years.”
Premji further warned that it will be America and Europe that will suffer, because they will be excluded from the only growth markets left in Asia, Africa and China.
GOOGLE: No Control
Google India said June 22 that it will not be able to control the publication of content on its blogging Web site. The company has moved the Bombay High Court over an order restraining the Web site from allowing the publication of defamatory blogs.
Google India’s lawyer Srikant Doijode said that it had no control over the blogging site and it was managed by Google Inc of the U.S. Even if there was an order restraining such blogs, it could not do anything, Google India submitted in court.
“The blogger service is provided by Google Inc. We (Google India) are not a party to the agreement between Google Inc and those who use the blog... We have no liability or responsibility for the content of the blog,” the company argued.
Earlier, city-based cardiologist Dr Ashwin Mehta had approached the court after finding that over 20 blogs on the Web site were defaming him.
A single judge of the high court had ordered Google to remove those blogs and prevent such incidents in the future.
“Google only provides a platform,” argued Google India’s counsel, adding that on account of the earlier order, it (Google) will be held in contempt if there was any fresh offensive blog about Dr Mehta. Doijode pointed out that if the content was defamatory and the court wanted its removal from the Web site, it could be done.
INFOSYS: New Securities
Software services giant Infosys Technologies has filed a prospectus with the U.S. Securities and Exchange Commission to enable the registration of new securities in advance.
The company recently filed form F-3 with the U.S. market regulator wherein it said that “from time to time, selling shareholders of Infosys Technologies Limited may sell American Depositary Shares, or ADS, representing our equity shares in amounts, at prices and on terms described in one or more supplements to this prospectus.”
Form F-3 is a kind of shelf-registration of a new issue which can be prepared up to two years in advance. This registration facilitates the process wherein a new issue can be offered quickly as soon as funds are needed or market conditions are favorable.
Each ADS that would be offered would represent one equity share.
The filing further said that “all ADS sold pursuant to this prospectus will be sold on behalf of the selling shareholders. We will not receive any of the proceeds from the sale of the ADS.”
Infosys ADS are listed on the NASDAQ Global Select Market and quoted at $34.84 per ADS on June 16.
Yahoo! Eyes India
Internet search giant Yahoo! said that India is a key market for the company and it will launch a host of new features for its mobile application to expand its user base.
“India was one of the first markets where we launched our mobile application and is a key market for us given the huge mobile base...We plan to launch a series of products for such mobile users that will help us increase user base,” Yahoo! Mobile senior vice-president David Ko told reporters here.
Yahoo! also launched a new home page which can be customized by users who access the Web site through their mobile handsets. The new interface allows users to customize his/her landing page and provides localized content, he added.
Yahoo! Mobile is now available in Australia, Malaysia, Singapore, Taiwan, Argentina, Brazil, Italy, Mexico and Spain, along with United States, Canada, Britain, Germany, France, India, Indonesia and the Philippines.
Ko said the focus in India would be on presenting localized content that would help Yahoo! Mobile to build its user base in the country.
He, however, declined to comment on the number of Indian users who access Yahoo! through their mobile.
TATA CONSULTANCY: New Center
Tata Consultancy Services, India's largest outsourcing firm, has opened a new center in Queretaro, Mexico, the company said.
TCS said it would hire 500 people to work at the new center, its third in Mexico since entering the country in 2003.
The company has seven centers across Latin America, in Brazil, Argentina, Uruguay, and Chile, as well as Mexico, and employs information technology consultants in 42 countries around the world.
The industry and its clients alike have been seeking to expand the number of countries they use for offshore outsourcing, and some U.S. clients are more comfortable sending work closer to home than to faraway Asia, analysts say.
India still dominates the industry, accounting for 85 percent of the $45 billion information technology services offshore market in 2008, according to Forrester Research.
“There are some clients out there, particularly the large ones, that are looking to diversify risk,” said John McCarthy, principal analyst at Forrester.
He said some companies, like General Electric, have tried to lessen their dependence on Indian outsourcers, but have struggled to find adequate alternatives.
“They can't find the skills in some of these other locations,” he said.
The push out of India began several years ago, as wages skyrocketed and attrition soared, McCarthy said. The recent downturn has curtailed both those trends, but last year's terror attacks on Mumbai and continuing political instability in neighboring Pakistan have renewed the push to alternate locations, he said.
“India clearly is going to be the dominant location for the foreseeable future, barring some major geopolitical issue,” he said. Argentina, Brazil, Mexico, Eastern Europe, Russia, Egypt, China, Malaysia, Vietnam, and the Philippines have all been developing as India alternatives, but none, save China, has the potential to be a real competitor, McCarthy said.
IBM to Invest
IBM has announced plans to shift $100 million of investment over the next five years into a major research effort which it said aims to advance mobile services and capabilities for businesses and consumers worldwide.
IBM said it is investing to create technology in its labs that bring “simple, easy-to-use services” to the millions of people who have bypassed using the personal computer as their primary method of accessing the Internet, and instead use their mobile devices for managing large forces of enterprise field workers, conducting financial transactions, entertainment and shopping.
Through this effort, the company said in a statement it is aiming to drive new intelligence into the underpinnings of the mobile Web to create new efficiencies in business operations and people's daily lives.
The three focus areas for IBM's research investment are: emerging market mobility, mobile enterprise enablement, and enterprise end-user mobile experiences. Analytics, security, privacy and user interface, and navigation would be concentrated on across the research effort.