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<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Report: India IT to generate $60B by 2010
DEC. 12 7:14 P.M. <b>Information technology and outsourcing are on track to generate US$60 billion (euro50.5 billion) in export revenues for India by 2010, according to a newly released report.</b>
If India makes the necessary investments in training and infrastructure, the report said, foreign companies would fuel the dramatic growth by continuing to move parts of their operations to India, where they benefit from low costs and a highly educated, tech-savvy, English-speaking work force.
The report by India's National Association of Software and Services Companies and international management consulting firm McKinsey & Company, released Monday, <b>said the industry would become the driving force of the Indian economy and account for 7 percent of the Indian gross domestic product in 2010, up from 3 percent today.</b>
<b>The growth would likely generate 2.3 million direct jobs and 6.5 million indirect jobs in India, it said.</b>
But the NASSCOM-McKinsey report cautioned that India would need to invest heavily in personnel training and in developing infrastructure to achieve the goals.
Urban infrastructure was key, the report said, and the government would need to create at least 10 new integrated high-tech townships, with appropriate land development, roads, electricity and international airports.
"Our cities are at choking point," said McKinsey's Jayant Sinha.
India's cities are notoriously underdeveloped, with frequent power cuts, potholed, traffic-jammed roads and poor municipal services.
The industry would also face a shortfall of some 500,000 properly trained workers. But this could be overcome by the companies providing their own training programs, the report said.
Overall, NASSCOM-McKinsey estimated the potential global market for offshoring at some US$300 billion (euro252 billion), of which US$110 (euro92.5 billion) will be offshored by 2010.
India's share of the market would grow by 25 percent a year over the next five years, from its current US$22 billion (euro18.5) to US$60 billion (euro50.5 billion), the report said.
One McKinsey partner, Noshir Kaka, said the figure was conservative and did not factor in potential innovations and regulatory reforms that could further speed growth.
His caution was matched by the exuberance of others, such as NASSCOM Vice Chairman Ramalinga Raju, who said India could see an additional US$15 billion to US$20 billion (euro12.6 billion to euro16.8 billion) on top of what the report predicted.
Copyright 2005, by The Associated Press. <!--QuoteEnd--><!--QuoteEEnd-->
<b><span style='font-size:21pt;line-height:100%'>India</span></b>
<b>The next wave</b>
<b>India's IT and remote-service industries just keep on growing</b>
<img src='http://www.economist.com/images/20051217/D5105WB1.jpg' border='0' alt='user posted image' />
ASKED for a sound-check at a function in Delhi this month, Bill Gates eschewed the â1,2,3...â favoured by ordinary mortals. âOne billion, 2 billion...,â he counted. They think big, these IT moguls, and especially, these days, in India.
Microsoft later announced plans to invest $1.7 billion in India over the next four years, about half of it in adding to its existing research and development (R&D) and technical-support operations. âThe only thing that limits us in India,â Mr Gates told the local press, âis the speed at which we can recruit.â A few days earlier, Intel, a giant chipmaker, had unveiled plans to invest more than $1 billion over five years, much of it in expanding its R&D centre in Bangalore. In October Cisco Systems, the world's largest maker of the routers and switches that direct internet traffic, announced its own plans to invest $1.1 billion in India.
The euphoria is confined neither to American multinationals, nor to information technology. It also encompasses India's own IT industries, and the expanding range of other back-office services that can now be performed remotely. The three biggest Indian IT-services firmsâTata Consultancy Services (TCS), Infosys and Wiproâare each recruiting more than 1,000 people a month. And to take just one example of the other services now moving to India, J.P. Morgan Chase, a big investment bank, this month revealed it is to double, to about 9,000, its staff there. Anyone who assumes J.P. Morgan will simply be doing low-level âback officeâ tasks in the countryâa bit of data entry and paper-shufflingâwould be flat wrong. One task for the new recruits is to settle complex structured-finance and derivative deals, what one insider calls âsome of the most sophisticated transactions in the worldâ.
All these investments illustrate that a third stage of the great Indian services-export boom is well underway. In the first, firms such as TCS developed world-class expertise in software âapplication development and maintenanceâ, and their low-cost developers became the preferred partners of many Western IT firms. In the second, Indian firms and the local âcaptiveâ operations of multinationals started offering low-end back-office services that could take place a continent awayâtelephone call-centres, transcribing medical records, processing insurance claims and so on. In the third, in both IT and the broader spectrum of other âbusiness processesâ, ever-more sophisticated functions are happening in India.
So strong are the forces driving this shift that what seemed improbably rosy projections by NASSCOM, the Indian software- and service-industry lobby, and McKinsey, a consultancy, back in 1999, are coming true. This week NASSCOM and McKinsey produced the second full-scale update of their study. It argues that exports from India's IT industry and from âBusiness Process Offshoringâ (BPO)âboth from services âoutsourcedâ to Indian firms and those performed by captivesâare on track to reach $60 billion a year by 2010.
That would be a huge surge from the $17.2 billion in the year ending in March 2005. But it implies a compounded annual growth rate of 28%âbelow that achieved in recent years. Moreover, according to McKinsey's estimates, it requires India merely to maintain its present shares of the markets for offshore IT services (65%) and BPO (46%). This is because the study predicts a massive rise in the size of the overall market, estimated at present to make up just one-tenth of those services that could be sent offshore. The proportion is expected to rise as demographyâa western labour shortageâbecomes more pressing than protectionism.
In IT the growth in Indian exports is expected to come both from the software market, and from âtraditional IT outsourcingââsuch as the remote management of whole systems, a market now dominated by the big global IT consultancies. This is expected to rise from 8% of Indian sales now to about 30% in 2010, while software-development's share will fall from 55% to 39%. In business-process-offshoring, the big industries will remain banking and insurance. But rapid expansion is also expected in other areas, like legal services.
The law, in fact, illustrates how vast is the untapped potential market. About $250 billion is spent on legal services world-wide, about two-thirds of it in America, and as yet only a tiny proportion goes offshore. Forrester, a research outfit, has estimated that, by last year, 12,000 legal jobs had moved offshore, and forecast that this will increase to 35,000 by 2010. India, with its English-language skills and common-law tradition is well-placed to secure a big share of the business. It is not just a question of âparalegalâ hack work such as document-preparation. Sanjay Kamlani, of Pangea3, a small Indian firm, calls it âreal lawyeringââdrafting contracts and patent applications, research and negotiation. His clients are both big law firms and in-house legal teams.
India's fundamental attraction has not changed since it first drew software developers: fantastic cost savings. With American lawyers costing $300 an hour or more, Indian firms can cut bills by 75%. Across the board, despite climbing rates of pay in IT and BPO, where rapid expansion has brought frantic job-hopping, India remains, say NASSCOM and McKinsey, the lowest-cost of all the main outsourcing destinations. It also has, among these countries, by far, the largest pool of employable peopleâthose with the necessary language and technical skills. On this measure, India, which produces 2.5m graduates a year, 250,000 of whom are engineers, has 28% of the global available workforce, compared with 11% in China.
Yet the supply of talent may be the biggest constraint on the Indian industry's growth. On these latest projections, the number of people working in IT and business-process exports in India will increase from about 700,000 now to 2.3m by 2010. But on today's estimates only 1.05m suitably qualified people will graduate from college between now and then, so there will be a shortfall of nearly 500,000, with business-processing the worst affected. McKinsey's Jayant Sinha believes the education system can be fixed in time to plug the gap. A bigger worry, he says, is India's creaking urban infrastructure. IT firms in Bangalore, for example, are in revolt against the local government for its neglect of basic amenities. Yet India's IT and business-process industries will need about 14m square metres (150m square feet) of office space by 2010: âa new Manhattanâ.
Hectic building is under way, and not just in the big IT and business-processing centres (Bangalore, Mumbai and around Delhi) or the âsecond tierâ of cities such as Pune, Hyderabad and Chennai (Madras). The industry's worry over infrastructure, as over education, is that it cannot do everything by itself. Having thrived by keeping government at arm's length, business now needs help.
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<b>Nokia Says India to Become 2nd-Largest Handset Market (Update3)</b> <!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The factory, built at a cost of $150 million, will make handsets and network equipment. Nokia, the world's biggest maker of cell phones, expects to employ 10,000 employees in the next few years, according to a statement issued by Nokia in the <b>southern India city of Chennai</b>.<!--QuoteEnd--><!--QuoteEEnd-->
<b>Is Maran arm-twisting Tatas?</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->CHENNAI: MDMK leader Vaikoâs allegation that Union Minister Dayanidhi Maran has been pressurising, even threatening, Mr Ratan Tata virtually to hand over Tata DTH [Direct to Home] project to his family may end up as more than just an allegation by a political rival during an election campaign.
Inquiries by this website's newspaper lead to the conclusion that Dayanidhi Maran has a lot to explain which he seems not inclined to.
The this website's newspaper sent a list of specific queries relating to the allegation to the secretariat of Ratan Tata.
Within hours, came a cryptic, but profound, response from a Tata spokesperson: âWe do not wish to make any comment.â The queries were pointed and contained serious allegations.
âYet the Tatas did not deny any of the allegations, but merely chose not to comment on them. In effect, by not denying, the Tatas have actually confirmed the allegations in substance.
As for Dayanidhi Maran, when contacted at Coimbatore where he was on his election campaign, he evaded a direct reply when this website's newspaper asked him whether the allegation that he had put pressure on Tatas to grab the Tata DTH project was true. Instead, he spoke disparagingly about Vaiko.
The this website's newspaper inquiries indicate that the matter is likely to snowball into a serious issue as it concerns the most respected and ethically most upright industrial group in India, the Tata group.
The case that is emerging against Dayanidhi Maran is briefly this. The Tata group is in alliance with the global giant Rupert Murdochâs Star TV for the Direct to Home [DTH] TV project. DTH broadcast carries the connectivity to TV at home without any cable through a set top box that sits on the TV. The value of this project runs into thousands of crores.
The Tatas presently hold 80 per cent of the project and Murdoch 20 per cent. The Maran family has acquired a DTH license. But there is a rider to that. Under its terms the Sun TV cannot hold more than 20 per cent like the Star TV cannot hold more than 20 per cent in the Tata Sky project. It has to find a partner for 80 per cent and also investment of thousands of crores!
Since the future belongs to DTH,Sun TV desperately needs to own DTH connectivity. That is why the Maran brothers, both Kalanidhi who runs Sun TV, and Dayanidhi who runs the ministry that is directly involved in DTH business, seem to have got interested in the Tata-Murdoch project.
This website's newspaper inquiries reveal that Kalanidhi Maran telephoned the Tata group chairman Ratan Tata and asked for a meeting. In the meeting he sought 33 per cent share in the Tata-Star DTH project with management rights. He demanded that Sun TV be given the shares at par, regardless of the real value.
This meant he not only wanted partnership but also at a huge concession. He also demanded to be included as promoter along with Tata and Murdoch.
Shocked by the brazen demand, Ratan Tata told him that it was Tatasâ project and they had no intention of parting with it to anyone. It was then that Dayanidhi Maran intervened.
Dayanidhi had meetings with Ratan Tata in which he began pressing him to part with the project. This seems to have intensified the struggle. Dayanidhi also contacted Rupert Murdoch himself and asked for 33 percent partnership, which the shocked global media baron politely declined.
Meanwhile, meetings took place in which the Marans began claiming that the executives of Tatas and Star TV and also Murdoch and his assistant at Hong Kong had accepted to give 33 percent partnership to Sun TV. These claims later reportedly proved to be false.
When Tata and Murdoch refused to oblige Dayanidhi and Tata wrote a letter to him saying that shares could not be given, Dayanidhi got upset. He reportedly threatened Tata that he would finish off their telecom project and subsequently his office promptly began withholding all normal clearances to Tata Telecom.
The minister ought to have known that since the telecom sector was beset by cutthroat competition, the withholding of ministerial approvals would impose huge costs and losses on Tata Telecom.
Evidently, that was the intent. Yet, despite all the pressures exerted, Tatas couldnât care less and stood their ground.
The this website's newspaper had also sent queries to Kalanidhi Maran who heads Sun TV, Peter Mukherjee who heads Star TV in India and also Rupert Murdoch through his second in command in Hong Kong.
While others chose not to respond, the substance of the telephonic response from Sun TV was that when it already had a DTH licence why should it put pressure on Tata to grab their DTH project. This answer lacks credibility in view of the condition that Sun TV cannot own more than 20 percent of the project.
The specific queries addressed by the this website's newspaper and the cryptic response of the Tata office which speak volumes are captured here: The this website's newspaper wrote to the Tata office:
ââWe understand that the pressure is on and that Tatas have resisted it so far and have also decided not to give in. We also understand that Mr Dayanidhi Maran has told Mr Ratan Tata directly that he will finish Tata Telecom and has also ensured that all normal clearances to the Tata group are withheld, so that the groupâs telecom business suffers vis-a-vis its competitors.
We want to know whether this is true in substance.
We also want your clarifications in regard to the following:
<i>Did Mr Kalanidhi Maran meet with Mr Tata and tell him directly to part with 1/3rd ownership of the DTH project.
Did Mr Peter Mukherjee of Star TV and Mr Ishat Hussain of Tata group meet with Mr Kalanidhi Maran in Chennai and tell him that it was not possible to offer any shares at par and the maximum that the Tatas could consider was to offer 20% at fair valuation?
Is it true that Mr Kalanidhi Maran got upset and spoke to Mr Tata in an inelegant language?
Did Mr Dayanidhi Maran speak to Mr Tata and advise him to offer 33% share in the DTH project to Sun TV?
Did he threaten Mr Tata that he would destroy the Tata telecom business?
Has he stopped all normal clearances of Tata Telecom?
Did Mr Kalanidhi tell Mr Tata that Mr Rupert Murdoch and his assistant in Hong Kong had agreed for 33% at par which was found by Mr Tata to be untrue?
Did Mr Dayanidhi Maran talk to Mr Rupert Murdoch for the 1/3rd share for Sun TV and threaten him also if he did not agree?
Did Mr Rupert Murdoch tell Mr Tata that he had not agreed for any share and that he had never come across any minister in any part of the world asking for ownership shares for himself?
Did the Tatas approach the PM and is it true that the PM has promised justice and has constituted a committee of secretaries to handle Tata-related matters.
Did Mr Tata write to Mr Dayanidhi Maran that he would not be able to offer shares in the DTH project?
Is it true that the Tatas are not talking about it openly because it is not their way of doing business or handling politics?</i>
It is in response to these specific queries that the Tata spokesperson responded cryptically, but significantly with his remark: ââWe do not wish to make any commentââ which is in itself a profound comment.
The critical aspect of the Tata reply is that they have not denied the facts mentioned in the queries addressed to them. Now that Tatas have not denied, it is for Dayanidhi Maran to respond. But, will he?<!--QuoteEnd--><!--QuoteEEnd-->
Corruption Corruption !!!!!!!!
India is not just the land of Bhartriahrii and Panini,the IT technologists of an ancient era,but it is the promise of tomorrow that is exciting. Look at the promising young faces of tomorrow
http://www.cfilt.iitb.ac.in/~mspil-06/misc/report.pdf
<b>Murthy to step down as Infy chief</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The staunch capitalist was once a socialist who travelled to Europe in the 1970s to learn more about communism, but came away disillusioned.
"I was a strong socialist. By the end of 1970 I got to the conclusion that leftism is just bogus. Socialism in India is meaningless. Creation of jobs requires entrepreneurship," the soft-spoken Murthy said.
Despite becoming a billionaire, Murthy set a model for India's wealthy business class by continuing to live simply and by sharing the NASDAQ-listed company's wealth with employees through stock options.
According to Indian media reports, that list includes not just the company's white-collar workers, but electricians, plumbers and Murthy's own driver, who at one time held close to half a million dollars in options.
"The value systems I incorporated in Infosys were taught to me by my parents," said Murthy, one of eight children of a rural schoolteacher father who earned 175 rupees (3.80 dollars) a month.
<!--QuoteEnd--><!--QuoteEEnd-->
An article on Indra Nooyi
A woman with fizz and bottle
Pepsi's new Indian CEO is set to make history and headlines, reports Anto Joseph in Mumbai Sunday August 20, 2006 The Observer
Indra Krishnamurthy Nooyi is not afraid of being outspoken. When she addressed Columbia University's Business School last year in her capacity as chief financial officer of Pepsi's parent company, PepsiCo, she compared each of the five continents to a finger on the hand, with the United States representing the middle finger.
She said: 'Each of us must be careful that when we extend our arm in a business or political sense, we take pains to ensure we are giving a hand ... not the finger ... Unfortunately, I think this is how the rest of the world looks at the US.'
After being accused of being unpatriotic, she issued an apology on Pepsi's website, thereby exercising 'communication' and 'conscience' - two of what she calls her 'Five C's to success' (the others being 'competence', 'compass', and 'confidence').
Overall, it doesn't seem to have done any harm, because last week she was appointed chief executive at the drinks giant - one of the most prestigious jobs in corporate America.
The appointment is a source of both pride and embarrassment for India. Pride because, when Nooyi replaces Steve Reinemund on 1 October to become Pepsi's fifth CEO, she will create history by becoming the first Indian woman to head a Fortune 100 company; embarrassment because, at almost the same time, a pesticide controversy has led some Indian federal states to impose a ban on Pepsi and Coca-Cola products.
Nooyi was born on 28 October 1955 and grew up in the south Indian town of Chennai (formerly Madras). Friends from Madras Christian College, where she studied for a Bachelor of Science degree three decades ago, remember her as a tough and independent team player whose first taste of business was managing college magazine advertising.
After completing a postgraduate diploma in business administration at the Indian Institute of Management in Kolkata, she worked at textile firm Mettur Beardsell and later as product manager for sanitary towels at Johnson & Johnson in Chennai - one of her most challenging roles, she says, because of the limited awareness of female health issues in India at the time.
In 1978 she won a place at Yale School of Management, where she attended classes by day and worked as a receptionist at night to make ends meet. It was there that she became known for working in her sari - something she has continued throughout her career, often attending PepsiCo functions in the colourful national dress.
After graduating, she spent six years at Boston Consulting Group, where she worked on international strategy projects. Between 1986 and 1994, she held senior management positions with Motorola and engineering firm ABB before joining PepsiCo in 1994.
At Pepsi she has played a pivotal role: she helped to spin off the company's restaurant businesses, such as Kentucky Fried Chicken, Taco Bell and Pizza Hut, into a new firm, Tricorn, took the lead in the acquisition of Tropicana fruit juices in 1998, and contributed to the $13.8bn acquisition of Quaker Oats in 2001.
Even so, the timing of her promotion was unexpected. Gary Hemphill, managing director of New York-based research and consultancy company Beverage Marketing Corporation, says: 'It was a surprise, because it was not commonly known that Reinemund was planning on retiring. But she is very effective. She has a great understanding of the business, she's a visionary and she's exceptionally driven.'
As recently as March last year Nooyi was denying suggestions that she was aiming for the top position, saying: 'My boss is very young, so let's keep it at that. We have great chemistry at work.' However, Reinemund's announcement that he was standing down to spend more time with his family left a gap that needed to be filled urgently.
Her outspokenness has often led her to discuss her unusual position in the US corporate world. In a 2002 interview in the United States, she said of her career progression: 'Being a woman, an immigrant and person of colour made it thrice difficult.'
Throughout her career she has championed diversity. In a speech to the South Asian Students' Alliance in January, she praised PepsiCo's moves towards creating a more ethnically diverse workplace.
For corporate India, Nooyi's promotion has come as an inspiration. HSBC India's chief executive, Naina Lal Kidwai, says: 'It's wonderful news. Not too surprising either, given her stature. It's great for India, great for womanhood and great for Pepsi.'
Unilever Asia/Africa president Harish Manwani says: 'This is a proud moment for corporate India as another Indian professional makes it to the very top of a big global organisation.'
Nooyi's first challenge comes from her homeland. A quarter of the country's 25 states have imposed partial or total bans on PepsiCo and Coca-Cola products after a New Delhi-based non-governmental organisation, the Centre for Science and Environment, claimed last week that the companies' colas contained several times the permitted level of pesticides.
On Thursday PepsiCo appealed to the Kerala state high court. PepsiCo India chief Rajiv Bakshi commented: 'We received the order on Thursday ... no grounds have been stated [for the ban].'
The controversy has threatened to escalate into a bilateral dispute, and last week Washington warned that foreign investment in India could be affected. The US Under-Secretary for International Trade, Franklin Lavin, said the ban could turn out to be a setback for the Indian economy.
None the less, PepsiCo has reaffirmed its commitment to the Indian market. Baskshi says: 'PepsiCo's long-term investments in India are not affected,' and adds that the company is prepared to accept any standards for finished products provided there is a standardised testing method.
However, Centre for Science and Environment chief Sunita Narain says both companies have strongly opposed proposals to set up standards for finished products. 'It is strange that there are no standards for finished products in the soft drinks category anywhere in the world, she says. 'The companies are claiming that it's a complex manufacturing procedure, hence there should be standards set for various ingredients such as water and sugar, and not on the finished product.'
She claims the cola giants fear that if India introduced standards for finished products, emerging markets in China and the Far East would follow suit.
Hemphill believes that Nooyi's appointment could help to ease the situation: 'Because of her Indian origins, I think she will have a good understanding of the market. It is well known that Nooyi frequently travels to India to cultivate ties with government officials.'
Another challenge for Nooyi is to counteract concerns about health and, in particular, obesity in North America and western Europe, and the resultant negative publicity for fizzy drinks and salted snacks. In 2005 PepsiCo and Coca-Cola saw their volumes decline by 2.5 per cent and 3 per cent respectively, according to a survey in Beverage Digest
Yet analysts believe Nooyi's sound business acumen will help to continue the company's strong growth trend. PepsiCo will certainly have to maintain its momentum in the 'healthy foods' category, with products like sports drink Gatorade, Tropicana fruit juices and Aquafina bottled water, if it is to hold on to recent success and grow in the face of increasing competition from Coke, whose healthy options include Minute Maid orange juice and the notorious -in Britain, at least - Dasani bottled water.
Meanwhile, many suspect that although Nooyi may tweak the business, essentially she will follow its present direction. Hemphill says: 'She will bring continuity because she has been in a key position for a number of years. I would expect more changes, but not dramatic changes.' He also believes that Pepsi's growth will continue to outstrip that of Coca-Cola. 'Pepsi has been very aggressive in developing the "wellness" end of their portfolio and I would expect them to continue that,' he says. 'Pepsi is probably ahead of the game in that regard.'
The CV
Age 50
Education BSc, Madras Christian College, post-graduate diploma, Indian Institute of Management, Yale School of Management
Career Mettur Beardsell textiles, personal hygiene specialist Johnson & Johnson, Boston Consulting Group, electronics group Motorola, engineer Asea Brown Boveri. Joined PepsiCo in 1994, instrumental in spinning off Kentucky Fried Chicken, Taco Bell and Pizza Hut in 1998, appointed chief financial officer in 2001, chief executive officer 2006
<b>Dhvani:</b> Dhvani [ http://dhvani.sourceforge.net/] (which means `soundâ in Sanskrit) is a text-to-speech system for Indian languages by the Simputer Trust. It takes phonetic input. Currently, there is support that accepts UTF-8 text in the Hindi and Kannada languages, and turns them into phonetics; therefore, text-to-speech is working for these languages.
[center]<b><span style='font-size:14pt;line-height:100%'>The technology industry</span></b>[/center]
[center]<b><span style='font-size:21pt;line-height:100%'>Different strokes</span></b>[/center]
<b>China and India are emerging as technology titans, but in different ways</b>
THE Dow Jones Industrial Average may have reached levels unseen since 2000 this week, but the technology industry has changed dramatically since the bursting of the internet bubble. The nature of the transformation is apparent in a new report on the state of the industry, released this week by the Organisation for Economic Co-operation and Development (OECD), the club of rich countries. Its league table of the world's 250 largest technology firms, measured by revenue, shows two big shifts. The first is that it includes far fewer hardware and manufacturing firms than it did five years ago, and far more software and service companies. The second is that Asian firms are pushing aside American ones.
<img src='http://www.economist.com/images/20061007/CWB401.gif' border='0' alt='user posted image' />
Companies from China, Hong Kong and India appear in this year's ranking for the first time and the number from Taiwan more than trebled (see chart). China is actually under-represented in the figures: many of the Hong Kong and Taiwanese firms do the bulk of their business on the mainland and many of the big Western technology firms have substantial operations in China. Indeed, China is now the world's largest exporter of technology goods (although much of the work is on behalf of foreign firms). Domestically, China is now the sixth-biggest buyer of high-tech goods and services in the world; by 2010 it will be in third place, behind America and Japan. Meanwhile, revenue from software and services has increased by around 50% between 2000 and 2005. So it is no surprise to see India's software stalwartsâTata Consulting Services, Wipro and Infosysâon the list.
For anyone who has choked on the exhaust in Shenzhen or crawled through Bangalore's notorious traffic, all this confirms what has been apparent for years. Yet although China and India are often lumped together as tomorrow's technology titans, there are marked contrasts in their technological development. They have roughly the same population, but China spends 2.5 times as much on technology as India does. It is already the world's largest mobile-phone market, and the second-largest market for PCs. Moreover, at the end of 2005, China had around 110m internet users, compared with 51m in India; and today China has 430m mobile-phone users, versus 120m in India. The two countries are adopting technology at different paces and in different ways.
China's lead is partly the result of co-ordinated government action. Centralised economies can pour resources into projects and direct the development of entire industries, something that is much harder in India's sprawling, bureaucratic democracy. For mobile phones, China established a second state-owned operator to challenge the incumbent, while India's operators remained tangled up for years in legal fights over a botched regulatory framework. China has also tried to develop its own technical standards so that it can avoid paying royalties to foreign firms for using intellectual property.
A further difference is that China's manufacturing strength means high-tech gear is available locally at low cost, whereas India must import it, explains Sacha Wunsch-Vincent of the OECD, who helped write the report. India has focused more on software and services, which can be delivered via networks without bureaucratic interference, unlike physical goods. But both Chinese and Indian firms are now setting up shop in central and eastern Europe, as a low-cost stepping-stone towards European Union countries, notes Mr Wunsch-Vincent.
Another striking finding is that although revenues and R&D spending are around 20% higher than in 2000 among the top 250 global technology firms, the level of employment is lower. Does that mean more automation is putting people, even in the most advanced industries, out of a job? Probably not. Instead of implying that the human-capital intensity of the technology industry has declined, the opposite is more likely: companies are increasingly outsourcing their operations to smaller, specialist firmsâmany of them in China, India and Taiwan, as well as in the Westâthat do not appear in the top 250. As a result, the rise of Asia is best characterised as the welding of the region into the global technology supply chain, in a way that benefits firms in other parts of the world as well.
Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
[center]<b><span style='font-size:14pt;line-height:100%'>Outsourcing mortgages</span></b>[/center]
[center]<b><span style='font-size:21pt;line-height:100%'>Home and away</span></b> <!--emo&:ind--><img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /><!--endemo-->[/center]
<b>India moves in on the West's mortgages</b>
SOMEBODY'S misfortune is often another's big chance. Rising interest rates and shaky property prices have made life harder for homeowners and mortgage lenders in America and elsewhere. Many mortgage providers are responding by outsourcing processing work to specialist firms. According to NelsonHall, a consultancy, the total annual value of such outsourcing contracts around the world is about $10.9 billion, with about a third of that in America alone. As yet, only a small proportion is being sent offshore. But as costs mount, says Sunil Mehta of NASSCOM, the Indian outsourcing industry's lobby, mortgages are âripe for offshoringâ.
It has also, he says, reached an âinflection pointâ. India in particular is poised to benefit from a huge rise in âmortgage-process outsourcingâ in the next few yearsâworth anything from $100m-150m a year to $3 billion-7 billion. Big lenders are now using their own âcaptiveâ operations in India for many mortgage processes, and independent âthird-partyâ business-process outsourcing firms are also on the hunt for work.
One force driving this, as usual, is cost. Higher interest rates eat away at the money-spinning business of refinancing outstanding mortgages, slash business volumes and squeeze margins. So the attractions of a low-cost destination, such as India, increase. Mortgages, moreover, involve a whole range of processes ripe for outsourcing. At âoriginationâ, they might include telemarketing, data entry and document verification. âServicingâ a mortgage can be performed remotely. So, to some extent, can managing defaults and âsecuritisingâ mortgages by aggregating them and dicing them into tradable instruments. Victor Martinez-Angles, of Genpact, India's biggest independent outsourcing firm and once an arm of General Electric, estimates that 50-80% of mortgage-related work can be done offshore.
In August Genpact became the latest Indian firm to acquire an American âfront officeâ when it completed the purchase of MoneyLine Lending Services, an American mortgage-service firm. The savings in using Indian firms can be huge. Mr Martinez-Angles reckons Genpact can make savings of 30-40% for each mortgage loan compared with an American bank. But Andy Efstathiou, of NelsonHall, says that the main impulse behind outsourcing in the industry as a whole is not so much cost-cutting as shifting from a fixed cost base to a variable one: the contracts give companies more flexibility to scale up and down as volumes vary.
Like all outsourcing to India, however, mortgage-servicing is vulnerable to protectionism, justified by fears about data security, such as those aired in a British television âstingâ operation this week in which Indian call-centre workers were caught extracting confidential information from customers and selling it. NASSCOM remains confident that India's record on this is as good as anywhere's, though Mr Mehta says one attraction of the mortgage business for India is the potential for its firms to diversify away from âvoice-basedâ workâie, call centres. Expanding operations in the West, through acquisition or otherwise, recognises the limits of âoffshoringâ. Some mortgage servicesâsuch as advising nervous customers on the biggest financial deal of their livesâmight actually be better performed at home, or even face-to-face, than down a telephone line from India.
Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>CITU split wide open on IT stir </b>
Pioneer News Service | Kolkata
Though the Centre for Indian Tade Unions (CITU) announced a nationwide industrial stir on December 14, <b>the labour arm of the Communist Party of India-Marxists (CPM) seems to be divided over inclusion of IT and ITes in their agitation plans.</b>
According to inside sources, a majority of the leaders in the CITU State unit have decided to go along with Chief Minister Buddhadeb Bhattacharjee. With the Chief Minister earlier having promised a hassle-free day for the IT sector, State CITU president Shyamal Chakroborty has decided to allow the 'Intelligent City' at Salt Lake to function on December 14.
Though leaders refused to comment on what transpired in a State Committee meeting, according to reports from the closed-door meet, <b>Chakroborty urged the CITU national president and CPM politburo member MK Pandhe -matter-of-factly - to first enforce a strike in the IT concerns in Bangalore, Hyderabad and Noida and then only, "we will follow suit". </b>
Chakroborty's statement, which also reflects the Chief Minister's mind, is being treated as a final verdict insofar as keeping the IT sector out of the strike's reach is concerned, say insiders.
According to sources the Chief Minister - who was confronted by IT bigwigs after the sector came under attack after last year's September 29 industrial strike - had assured the investors he would not allow it to be repeated in Bengal.
Noticeably in an earlier development, Bhattacharjee managed to dispatch militant CITU leader and CPM politburo member Chittabrata Majumdar to Rajya Sabha, thereby creating a space for Chakroborty - a reformist in State CITU president.
For the records, <b>West Bengal became the first State where IT professionals recently formed an association under the CITU</b>. According to sources, though the Chief Minister got the backing of Left Front chairman and Politburo colleague Biman Bose as well as party patriarch Jyoti Basu, he faces stiff resistance from Cabinet colleague Subhash Chakroborty who strongly feel the IT should also be included in the strike. "If we have to leave IT why shouldn't we leave paan shops as well?" an irate Transport Minister, not known to be best of friends of the Chief Minister, maintained.
Notwithstanding the CITU's official stand, the IT sector still remains under threat, sources said, adding that the CM has already given the police a "free hand to deal with mischief mongers irrespective of their colour".
<!--QuoteEnd--><!--QuoteEEnd-->
[center]<b><span style='font-size:21pt;line-height:100%'>IT exports set to be USD 30 Billion this fiscal</span></b> <!--emo&:clapping--><img src='style_emoticons/<#EMO_DIR#>/clap.gif' border='0' style='vertical-align:middle' alt='clap.gif' /><!--endemo-->[/center]
Buoyant. A term that best describes the state of the Indian IT services industry, as it steps into â007. No carping, no cavilling. The industry is on the plane of high-rise expectations. As NASSCOM President Kiran Karnik says, âTwo years ago when we came out with the NASSCOM-McKinsey study, we had said that we had touched just one-tenth of the potential. Things are just beginning to happen now.â
The NASSCOM-McKinsey study which projected that IT exports were likely to touch $60 billion by 2010 and would clock an annual growth of 25% plus, had been met with some scepticism by some quarters, which included some from within the industry. As the industry enters the new year, such pessimism has no takers. <b>Total IT exports from the country is set to rise from $23.4 billion in 2005-06 to $30 billion this fiscal, cantering at a rate of 28%.</b> This has lifted the sentiments not only for the Tier 1 players but also for the Tier II & III.
TPI India MD Siddharth A Pai says that the reasons for the bullish mood are not far to seek as it is a combination of demography and maturity. India has 65% of the population under the age of 30 unlike most of the developed countries and the industry has displayed considerable maturity, making it one of the leading destinations globally for IT outsourcing. He says the maturity can be attributed to the presence of large Indian players as well as MNCs, adding, âthere is no dearth of business for Tier II & III players.â
That things are going swimmingly well for the Indian industry can be gauged from the fact that majority of the offshore contracts have 50% of the component coming into the country. Tholons CEO Avinash Vashistha says India is in a unique position where the demand far outstrips the supply and there is no competition anywhere on the horizon. He feels the buoyancy in the market has seen the tier 1 Indian players having enough projects on hand with the only constraint being supply.
India is also benefiting from a demand maturity where there is greater degree of acceptance among the global players of the need to go for an outsourcing or offshoring of their IT activity.
Karnik says it is conjunction of factors which has led to this buoyancy where the global economic scenario has seen an upturn with even Europe and Japan also increasingly looking at outsourcing IT activity.This has also spawned newer areas of IT outsourcing like engineering services, equity research, business analytics which were earlier thought of as segments which could not be outsourced.
Related to this mood of optimism is the performance of the small and medium enterprises (SME) sector. The earlier logic that the growth with mainly benefit the large players with established brands and full suite of services, as the industry has evolved it has found space for the mom & pop shops too. Earlier, the talk was all about the impending merger and acquisitions (M&A) in this segment owing to widening gap between the top five Indian service providers and them. Today, things are not very distressful as even SMEs are recording high growth rates.
Karnik points out that at an aggregate level it may look that the SMEs are not recording very high growth rates but once the segment is desegregated then it becomes apparent that there are lot many entities who are recording growths equal if not higher than the larger players.
Pai feels that the buoyancy in the market has also raised the valuation of these entities making them quite unaffordable making an M&A play difficult. It has also been the case that smaller entities been nimble and built a differentiator, carving a niche for themselves and thus getting marquee clients. Dr Sridhar Mitta, MD, e4e India says that it works on the premise that it not only provides IT services but also takes a consulting mode of solving the business problem through technology.
However, Vashistha says M&A is beginning to happen though it is not very visible. The recent examples have been of private equity giant KKR acquiring Flextronics Software or General Atlantic taking stakes in Hexaware and Patni.
However, the current high also brings in its own set of challenges. Though the most often quoted are the need for steady supply of talent and infrastructure issues, there are some which go beyond. Karnik feels the industry would have to take a more long term perspective and not merely tout the cost and efficiency factors. Over a certain period of time, the linear curve of lower costs will be flattened and companies will need to look at innovative solutions and process.
Further, the NASSCOM president fells that protectionist issues may rear their head again especially in US and UK, which are going to see a change in governments. There could be also certain non-tariff barriers coming up like cap on visas or restrictions on movement of people.
One thing is for certain, this momentum should remain for another three years. Even the China bogey might not materialise as some analysts feel that the country is good 8 to 9 years away from posing a significant threat to India.
Cheers <!--emo&:beer--><img src='style_emoticons/<#EMO_DIR#>/cheers.gif' border='0' style='vertical-align:middle' alt='cheers.gif' /><!--endemo-->
<b>Gossip, company secrets on e-mail? Think twice</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->All those who flirt on e-mail, send confidential company information, or send hate mail about their bosses from anonymous IDs: here is what to do.
Stop right there. The humble e-mail is bouncing back.
In the seven years after the country passed its information technology law that made e-mails legal documents, there has been almost no awareness and compliance - and few seemed to care. But that is all changing, with e-mails at the heart of a series of new Indian lawsuits.
"People are extremely flippant and casual. We often do not perceive the-mail as a serious form of communication. People do not realise that it can have serious legal repercussions," said Pavan Duggal, an expert on internet-related laws.
The costs are heavy. Under Indian laws, offenders can be imprisoned for a maximum of 10 years and may have to pay a penalty of up to Rs 1 crore.
Employees of Integrix, a networking company, recently received an e-mail purportedly from one of its directors, promising to help them pass a crucial certification examination without sitting or it-"for a consideration".
The e-mail was traced back to an Internet Protocol address that provides the exact location of a computer. Bharti, the service producer, released the IP address on a court's instructions - showing that the mail came from a former company director, sacked for alleged financial irregularities. He is now being prosecuted after the e-mail was admitted as evidence.
The case also set a new precedent - the Delhi High Court allowed Integrix attorney Duggal to sue an anonymous person identified only by his IP address, before his identity was known.
A management trainee at the HDFC Bank lost her job after it was proved that she shot off anonymous e-mails using the bank's network to the clients of her ex-boyfriend, a lawyer, falsely claiming that he had been debarred by the lawyers' professional body.
An employee who quit a BPO in Gurgaon to set up her own back office operation has been sued on the basis of e-mails forwarded to herself in the weeks leading up to her resignation, allegedly containing privileged company information and client data.
A man in Mumbai lost his job for writing an e-mail with sexual undertones to a fellow employee in an Information technology-enabled services company. An employee of a rubber company in Noida faces charges of writing an e-mail full of expletives about his managing director from a fake ID.
Names of employees and some companies cannot be disclosed before courts give their rulings.
But Indian laws require a complex set of requirements to prove that e-mails have not been tampered with.
Until now, "it was driven by corporate governance, not laws of the land," said Manoj Chugh, South Asia chief of the United States-based EMC, whose company helps archive e-mails in keeping with Indian laws.
But companies are swiftly realising the need to archive mails - EMC's customer base grew by 150 companies, from 350 to 500, between May and December last year, he said.
"You write an e-mail and it is as good as a letter written in the physical world," said leading intellectual property attorney Pravin Anand.
<!--QuoteEnd--><!--QuoteEEnd--><!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>⢠Indians are often not seen as skilful in writing e-mails - most do not realise that this often can become the basis for legal action.
⢠E-mails are increasingly becoming a foundation of litigation in India. Many cases have been brought to court. No judgement yet reported.
⢠Examples: Employee terminated for illegal or wrongful conduct, termination of legal relationships between entities and persons, use of e-mail to communicate resignation, abusive e-mails and "cyber defamation", leaking company data.
⢠E-mail archiving shaping up into big business</b> <!--QuoteEnd--><!--QuoteEEnd--><!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>What the law says
⢠E-mails are considered legal documents in India since 2000, when the Information Technology Act came into force.
⢠But the law specifies several conditions which need to be fulfilled before electronic information can be considered legal documentation.
⢠E-mails are legal if they are made available in electronic form, and accessible in a way that they can be used for future reference.
⢠They must be retained in the format in which they were originally generated, sent or received. Electronically available details showing the identification of the origin, destination, date and time of dispatch or receipt are a must.
⢠Offenders can be imprisoned for a maximum of 10 years and may have to pay a penalty of up to Rs 1 crore.</b><!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->⢠<b>Indians are often not seen as skilful</b> in writing e-mails - most do not realise that this often can become the basis for legal action.
<!--QuoteEnd--><!--QuoteEEnd-->
Indians???? <!--emo&:blink:--><img src='style_emoticons/<#EMO_DIR#>/blink.gif' border='0' style='vertical-align:middle' alt='blink.gif' /><!--endemo--> HT folk are not Indians and I am sure HT will teach Indians how to write emails skillfully... <!--emo&  --><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' /><!--endemo-->
01-31-2007, 08:09 AM
(This post was last modified: 01-31-2007, 08:14 AM by Husky.)
<!--QuoteBegin-k.ram+Jan 28 2007, 07:19 PM-->QUOTE(k.ram @ Jan 28 2007, 07:19 PM)<!--QuoteEBegin--><!--QuoteBegin--><div class='quotetop'>QUOTE<!--QuoteEBegin-->⢠<b>Indians are often not seen as skilful</b> in writing e-mails - most do not realise that this often can become the basis for legal action.
<!--QuoteEnd--><!--QuoteEEnd-->[right][snapback]63682[/snapback][/right]<!--QuoteEnd--></div><!--QuoteEEnd-->So what if I can't write emails skilfully? (But everything comes with practise, so us Hindoos need not lose hope. One day I may even be able to spell better... it's possible!) At least I don't make a living off lying - concocting uppity, conceited, and anti-Indian, anti-Hindu stories to brainwash a mass readership with - like HT fable-mongers do.
Don't HT 'journalists' know they can't trade their allegedly superior writing skills for some basic ethics, which the very poorest Hindu man or woman living in a remote Giri community has in vast abundance? Anyone and everyone can learn to write well, but it's way too late for these self-conceited HT writers to learn the humility and very humane ethics that is still innate to large parts of the same Indian population that they denigrate. Apparently learning English (yawn) has made them gawds, no longer to be compared with 'the little people of India'.
But littleness is a state of mind, and it's obvious who is trapped in it.
Don't know where this goes
http://news.bbc.co.uk/1/hi/business/6315823.stm
<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Last Updated: Wednesday, 31 January 2007, 05:01 GMTÂ
<b>Indian firm wins race for Corus</b>
A bid from Tata kicked off the battle for Corus in October
A giant Indian corporation has won the battle to take over the Anglo-Dutch steelmaker Corus.
Tata Steel's bid for the steelmaker - which was created from the merger of British Steel and Hoogovens - beat that of its Brazilian rival CSN.
Britain's Takeover Panel said Tata had won after offering 608p per share, valuing Corus at £5.75bn ($11.3bn).
Corus employs 47,300 people worldwide, including 24,000 in the UK at plants at Port Talbot, Scunthorpe and Rotherham.
Tata, which is based in Mumbai (Bombay), previously said its takeover would not lead to job losses in the first phase.
The takeover will create the world's fifth-largest steel group.
The two-way battle for the firm began in October when Tata tabled a £4.1bn bid for the group and, in December, the Corus board recommended a revised £4.7bn offer from Tata.
But, just hours later the board confirmed it had approved a £4.9bn, offer from Rio de Janeiro-based CSN.
Tata eventually outbid its Brazilian rivals.
Last year Corus was the ninth largest steel producer in the world with 18.2 million tonnes of output. It banked pre-tax profits of £580m on turnover of £10.14bn.
Last year Tata Steel, part of the Indian conglomerate Tata Group, was ranked 56th in the list of steelmakers around the world with output of 5.3 million tonnes.
The Tata Group - which owns Tetley tea and Daewoo cars - has operations in more than 50 countries. <!--QuoteEnd--><!--QuoteEEnd-->
Lesson from Sonia led Govt.
<b> How to take back India to 2% growth rate?</b>
Step 1:
<b>BPOs lose sleep over tax on ESOPs</b> <!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The BPO sector says the new tax announcements of 30 per cent on Esops, 12 per cent on rental space and 11 per cent MAT in this year's budget has made the industry in India less globally competitive.
Says CMD, Quatrro, Raman Roy, "We face the risk of losing our first-mover advantage. These policies are making us less productive in comparison to other countries."
On the other hand China, Sri Lanka, the Philippines and South Africa want a slice of the outsourcing pie.
Most of their governments offer 10 to 15-year tax breaks and China even offers BPO employees an income-tax holiday.
<!--QuoteEnd--><!--QuoteEEnd-->
<b>60,000 IT professionals in US return home</b>
Not many, if you consider H1 visa started from 92-93, initial limit was 40K, in 98 it was 115k, from 2001 it is 65 K. If one consider 50% used by Indian IT professional, It is too little. I am not considering O1, or L1 category or family GC.
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