IBM says it will continue large-scale hiring in India
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IBM plans to continue hiring global services delivery staff in India by the thousands, adding to the 73,000 it already has in its global services and other operations in the country.
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The work force at International Business Machines Corp. grew 8 percent in 2006, with most of the rise coming in India, where the technology company has been on a hiring binge in recent years.
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JPMorgan Chase &amp; Co. says it will rehire 4,000 workers whose jobs it had outsourced to IBM, bucking a corporate trend in information technology.
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COPENHAGEN  - IBM has signed a pair of outsourcing contracts worth more than &#36;1 billion US with two Danish companies, continuing the computer giant's push into northern Europe.
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(InfoWorld) - Indian chief information officers (CIOs) are finding it harder to recruit staff because of large-scale hiring by the countryâs outsourcing industry, a Gartner researcher said Monday. Indiaâs top IT services providers, focused on the global market, are regarded as the best employers, and get the best IT staff in the country, said Partha Iyengar, research vice president at Gartner, in a conference call. Indian user organizations are hence finding it very difficult to attract and retain technical staff, particular in the middle management, Iyengar said. A large number of Indian and multinational services companies have set up services delivery operations in India, and hire staff by the thousands each quarter. The problem for user organizations may only get worse as outsourcing companies start hiring business line managers as well to build their vertical industry expertise, Iyengar added. As large Indian outsourcers grow in revenue by 30 to 40 percent each year, they will hire business managers from the banking, manufacturing, and retail industries, bringing business knowledge that can be integrated into their services offerings, he added. This movement of business managers from the user industry to outsourcers will make it more difficult for CIOs to complete projects, as companies will have fewer business staff available to participate in the project, according to Gartner. India is fastÂ emerging as a key marketÂ in the Asia-Pacific region for outsourcing contracts, according to outsourcing consultancy firm, Technology Partners International Inc. (TPI) in Houston, Texas. Of the total value of contracts awarded in the region last year, Indian customers accounted for 24.8 percent, TPI said. That puts the country ahead of China with a 4.4 percent share, but still behind Australia at 32.4 percent and Japan at 26.8 percent, Peter Allan, a partner at TPI said Monday. Faced with shortage of staff, Indian user organizations are looking to outsourcing IT functions. But Indian outsourcing companies have not shown great interest in this business, as they are more focused on more lucrative business abroad, Gartnerâs Iyengar said. Multinational service providers like IBM andÂ AccentureÂ have bagged some of the larger contracts, but that still leaves a large number of Indian companies with smaller outsourcing contracts, who canât find a good service provider, Iyengar added. Indian IT spending is growing at a five-year compound annual growth rate (CAGR) of 14.8 percent, the highest in the Asia-Pacific region, to over $36 billion by 2009, Gartner said. This increase comes from rising expectations from businesses for IT to play a larger role in growth, efficiency and competitive advantage, it added.
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One of the country&#39;s biggest insurance firms, Royal &amp; SunAlliance, is to transfer more than 1,000 jobs to Bangalore in India.
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(InfoWorld) - Indian outsourcing companies have to move beyond low-cost services on an hourly-rate basis to offering complete services, according to an outsourcing consultancy. A model that is based primarily on the low cost of Indian staff will not be sustainable by Indian providers in the long term, as the cost advantage is eroding, said Dennis McGuire, chairman of outsourcing consultancy firm, Technology Partners InternationalÂ (TPI) in Houston, Texas. Large competitors like IBM and Accenture are also expanding operations in India to take advantage of low-cost staff, he said. âWhen I go to a restaurant, I want a chicken dish and not a rate-card telling me how much the chefâs time will cost me,â McGuire told reporters Wednesday. There isnât much risk, nor promise of great reward, in the current labor-cost arbitrage model adopted by Indian providers, he said. Indian service providers must make more investments in senior staff, and industry specific applications and tools if they want to win big contracts, said Peter Allan, a partner at TPI. They will have to develop industry-specific applications, such as a billing system for telecommunications companies, around which they can offer services to customers, said Siddharth Pai, another partner at TPI. Indian providers have been reluctant to trade current margins for long-term revenue opportunities because investors expect far higher margins from Indian service companies than from their multinational competitors, TPI said. Only recently have these outsourcers indicated that they are willing to accept total outsourcing deals that involve transferring customer staff and assets, Pai said. The reluctance of Indian outsourcers to address the lower-revenue domestic outsourcing business will also hurt them as the market shifts from plain coding and testing to higher-end transformation services, research firm Gartner said this week. Working on projects in India in these new areas would give Indian outsourcing companies the opportunity to prove their capabilities to customers abroad, said Partha Iyengar, research vice president at Gartner. Indian outsourcing companies such as Infosys Technologies and Tata Consultancy Services are attempting to go up the value chain into IT consulting and services delivered around their products. â They still donât offer the full array of services, and in applications they only have products in the core banking area,â Pai said. However,Â business is still strong for Indian outsourcers, according to data released by TPI. Of the number of contracts greater than $50 million awarded last year, the share of Indian service providers went up to 11 percent from 8 percent a year earlier, according to the consultancy. Their share of the total value of these contracts went up to 7 percent from 4 percent a year earlier, it said.
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(InfoWorld) - The emerging nations of Brazil, China, India, and Russia together represented five percent of IBM's second-quarter revenue, and the vendor is looking for those revenue levels to double over the next four years. "These emerging countries are among the fastest growing IT markets in world -- and we're investing to capture growth," Mark Loughridge, IBM's chief financial officer, told analysts during a Wednesday conference call to discussÂ the vendor's latest financial results for the three months ended June 30. IBM's revenue in China and India grew over 30 percent in the second quarter of fiscal 2007 compared with the same period a year ago. In Brazil, IBM's revenue rose nine percent, while the vendor's revenue in Russia rocketed by 52 percent versus the year-ago quarter. Asia-Pacific helped IBM's global services operation continue the return to health it began to demonstrate in the first quarter. Previously, IBM's overall services business had shown little or stagnant growth. Second-quarter revenue growth for the unit was up 10 percent to $13.1 billion on the year-ago quarter. Eleven deals signed in the quarter were larger than $100 million, according to Loughridge. IBM is also seeing more revenue growth from its existing customer base as it invests in the vendor's services, he said. In the area of strategic outsourcing, IBM saw particularly strong revenue growth in India with an increase of nearly 150 percent. Looking at IBM's services business as a whole in India, Loughridge was extremely bullish. "Weâre beating the local competition on their own turf," he said, citing deals with Delhi Airport and the Indian Tax Authority as well as an expansion of an existing agreement with mobile carrier Idea Cellular. Elsewhere in the world, IBM's global surveillance services business is performing strongly. Loughridge cited implementations of surveillance infrastructure at Chicago Transit Authority and the Unicredito Bank. It wasn't all good news. IBM's systems and technology business took a hit from lower demand than had been expected for chips to power games consoles. "We do have opportunities in other high-growth segments, including wired and wireless communications," Loughridge said. Sales of the vendor's external disk storage were disappointingly flat. On the plus side, IBM experienced very strong performance in its tape storage operation where revenue grew 19 percent. The vendor's System z mainframe continued to do very well driven by customers looking to consolidate servers and embrace virtualization. It's a trend, Loughridge said, that's leading users to purchase enterprise-level hardware. "This [z] box saves customers a lot of money; it's a strong economic proposition," he added. IBM's System i servers again performed poorly, but Loughridge hoped that situation will change once IBM refreshes the family with its Power6 processors, which recently made their debut in the vendor's System p midrange servers. On the software side, IBM experienced another "very strong quarter," Loughridge said, with the vendor's WebSphere middleware and its Tivoli systems, storage and security management products all performing very well. Overall, Loughridge was a happy man. "This was a really great quarter," he said. "I think every CFO waits for a quarter like this."
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Intel Corp., the world's largest  computer chip maker, said it would spend $40 million to expand  in the southern Indian city of Bangalore over the next two  years, maintaining its spending rate since the start of 2003.
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(InfoWorld) - Indiaâs outsourcing industry continues to do well despite theÂ appreciation of the Indian rupeeÂ against the U.S. dollar and higher staff costs. Indiaâs second largest outsourcer, Infosys Technologies, Wednesday revised slightly upwards its revenue forecast for its fiscal year to next March 31. The company said it expects revenue to grow by 29 to 31 percent during the year to between $4 billion and $4.05 billion. Infosys, of Bangalore,Â said in AprilÂ that it expected its revenue to grow by 28 to 30 percent to about $4 billion during the year. The company, which is listed both on Indian and U.S. stock exchanges, has however revised downward its revenue forecast in rupees, to take into account the appreciation of the rupee. Indiaâs software and services exports areÂ projected to growÂ by 26 to 29 percent to about $40 billion in the fiscal year to next March 31, India's National Association of Software and Service Companies (Nasscom) said this month. The countryâs revenue from exports of software and services and business process outsourcing (BPO) grew 33 percent to $31.3 billion in the fiscal year to last March 31, according to Nasscom in Delhi. The appreciation of the Indian rupee against the U.S. dollar pushes down rupee realizations for revenue earned abroad by Indian companies, even as staff costs in India are going up. The U.S. is the largest market for Indian outsourcers, accounting for about 66 percent of export revenue. Indian outsourcing companies seem to be holding out well against the pressures. Infosys of Bangalore has maintained its net margins despite the rupee appreciation, higher wages, and costs of visas to the U.S., the company said Wednesday, while announcing its results for the quarter ended June 30. iGate Global Solutions, a mid-size outsourcer in Bangalore, also said Wednesday that it had nearly doubled its operating margins in the quarter over the same quarter last year, despite a stronger rupee, on account of higher rates from customers, higher utilization, and increased use of offshore delivery of services. In the quarter ended June 30, Infosys posted revenue of $928 million up by 40.6 percent over the same quarter last year. The company's profits for the quarter were $263 million up by 51 percent from the same quarter last year. Infosysâ results are in compliance with US GAAP ( Generally Accepted Accounting Principles). The company added 35 new clients and 3,730 employees during the quarter taking the total number of employees as on June 30 to 75,971. Infosys plans to hire 26,000 more staff during the current fiscal year. Infosys and other Indian outsourcers compete with multinational services companies such as Accenture and IBM, which have set up offshore services delivery centers in India to take advantage of the lower cost of staff in the country. There is, however, enough business going around for both Indian and multinational companies, according to Indian outsourcers. The crunch comes in relation to hiring new staff. Wipro, Indiaâs third largest outsourcer will be announcing its results for the quarter next week.
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Indiaâs business providing software and services to companies outside its borders will grow a healthy 26 to 29 percent this year, the country's main trade association for that sector said Monday.
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Over the next to years more than 1,100 jobs located in United Kingdom, will be shift to India, according to the Royal &amp; Sun Alliance plans.
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As blue chip companies in developed marketsÂ scramble to outsourceÂ high-cost jobs to low-cost countries, one of the world's biggest technology companies -- IBMÂ -- seems content to keep more than 1,800 highly trained, well-paid IT engineers at its R&D (research and development) lab in BÃ¶blingen, Germany.
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Indian outsourcer Satyam Computer Services plans to train over 1,500 staff over the next two years on software and technologies from business software vendor SAP in a move to meet growing demand worldwide for consultants certified on SAP software.
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InfoWorld - IBM Corp. expects about $1 billion in revenue from India, as the company's hardware and services business in the local market soars.
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Microsoft is to form multi-million pound partnerships with two Indian software firms, and is expected to double the 1,500 people it already employs in India.
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IBM chief financial officer Mark Loughridge said last night the world&#39;s largest computer company expects to beat Wall Street analysts&#39; forecasts for the full year.