India&#8217;s BPO industry could reach $50 billion by 2012
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India&#39;s business process outsourcing companies could attain revenues of up to $50 billion by 2012, but the industry will need greater investments in education and infrastructure by the government, according to a new report released Tuesday.At its current growth rate, India&#8217;s $11 billion BPO industry will reach about $30 billion by 2012, said the joint report, published by consultancy firm Everest Group and India&#8217;s National Association of Software and Services Companies (Nasscom).If the industry reaches $50 billion in revenue, it will directly employ two million staff and provide indirect employment for two to three times more people, said Som Mittal, president of Nasscom. The industry would comprise 2.5 percent of India&#39;s GDP (gross domestic product).Mittal said India&#39;s federal and local governments would have to play a larger role in order to push revenue to $50 billion. Over the last 10 years, the industry has done much on its own, such as building power generation facilities and providing training to staff, but could use more government support, Mittal said.Indian companies spend a lot on in-house training because the education system in India does not have direct links with the BPO industry, said Raman Roy, chairman and managing director of Quattro, a BPO firm.The BPO industry needs more employable graduates with skills in new areas such as analytics or the industry could face staff shortages of up to one million&#160;people for entry-level positions, Roy said.Some companies have explored setting up operations in smaller cities due to competition for staff from the retail and telecommunication areas.&#8220;We hire people from small cities, but we cannot set up operations there because the infrastructure does not exist,&#8221; Roy said. It is unfair to ask managers to move to small towns where there are no hospitals or entertainment, he added.The BPO industry now plans to set up regional hubs and develop infrastructure, including communications capabilities and staff housing. Many BPO companies now spend time and money transporting staff between cities and suburbs.The industry is also demanding that BPO companies be allowed to use the same facilities during daytime to address domestic business. India prohibits using the same facility for domestic and export business.Since nighttime operations focus on servicing foreign customers in the U.S. and Europe, using the same facilities during the day for domestic business would benefit companies, Mittal said.
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Gartner researchers believe that as many as 50% of the IT operational jobs in the U.S. could disappear over the next two decades because of coming improvements in data center technologies.
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40% of SBs (small businesses, or companies with up to 99 employees) in  India plan to invest in computers for the first time in the next 12  months, opening up a huge opportunity for hardware, software and  solution vendors.
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India's nascent $30-million gaming  industry is set to grow to $700 million in the next five years,  driven by global companies that are pushing new generation  gaming consoles in the Indian market, industry watchers said.
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Indian outsourcers are planning to double the revenue from remote infrastructure management services by 2013.
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India was the fastest growing market for SAP last year, with licensing revenue increasing more than 100 percent over the previous year, a company official said Wednesday.SAP more than doubled its number of customers from 1,350 a year earlier to 3,024 in December, said Ranjan Das, SAP&#39;s president and chief executive officer for the Indian subcontinent.SAP did not disclose its revenue from India last year or the percentage of the country&#39;s contribution to SAP&#39;s global revenue.SAP has its largest product development operation outside Germany in India. The company also offers services to customers worldwide from India.India&#39;s IT market&#160;was valued at $9.6 billion last year, with hardware accounting for 54.9 percent, services 39.3 percent and software for 5.9 percent of revenue, according to research company Gartner.SAP is hoping to sign up 100,000 customers by 2010, and India and China will play a key role, the company has said.
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(InfoWorld) - SAP AG has doubled its customer base in India from 1,000 to 2,000 over the last one year. Markets in India and China will play a key role in its drive to sign up 100,000 customers by 2010, the company said Tuesday. The company's entire executive board, including Henning Kagermann, CEO and chairman of the executive board, is currently visiting India, reflecting the rising importance of the country to SAP as a market and a center for technology development and support services, the company said. On a previous visit to India, Kagermann had shown interest in working with Indian outsourcers both for their skills and the lower costs they offer to customers. Last year, SAP announced that it would invest US$1 billion in India by 2010, primarily in its offshore development and services and support hub in the country. SAP Labs India is currently the company's largest research and development and support operation outside Germany. While its Bangalore operations focus on product development, a new facility in Gurgaon near Delhi focuses on global service and support. The company also announced Tuesday that Indian outsourcer Wipro Ltd. will become an SAP global services partner and will establish a solutions lab in Bangalore to showcase the benefits of enterprise SOA (service-oriented architecture).
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It plans to begin manufacturing in India in the first half of next year, with an initial focus on the production of desktop computers.
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General Electric is selling a 60% stake in its business process outsourcing subsidiary in India, for about $500m (Â£270m). GE was one of the first multinational companies to outsource back-office work, datacentre
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(InfoWorld) - India's third largest outsourcer, Wipro, Thursday reported growth in revenue and profit, although like other Indian outsourcers, it too was affected by theÂ appreciation of the Indian rupeeÂ against the U.S. dollar. The company posted total revenue of Indian rupees 41.83 billion ($1.03 billion) in the quarter ended June 30, up 34 percent over revenue in the same period last year. Net revenue was rupees 7.1 billion, up by 16 percent for the same period a year ago. Wipro, of Bangalore, has both a domestic and export business. Its export-oriented outsourcing business, called Global IT Services and Products, posted revenue of rupees 29.4 billion, up by 20 percent over the same period last year. The company's operating margin for this business was however down from the same quarter last year because of the strong rupee. The results are based on U.S. generally accepted accounting principles (GAAP), the company said. The company's export business had 72,137 employees as of June 30, which included 53,073 employees in its IT services and products business, and 19,064 employees in the BPO (business process outsourcing) services business. The company added 4,319 staff during the quarter of which 2,719 employees were added in its IT services and products business and 1,600 employees in its BPO business. During the quarter, some of the company's services lines like technology infrastructure services and software package implementation grew by over 50 percent year-on-year, while its BPO and testing services grew by over 40 percent year-on-year. The company's export business accounted for 70 percent of total revenue and 91 percent of operating income for the quarter. Wipro does not report profits separately for this business, which added 39 new outsourcing clients in the quarter.
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There is a need for substantial increase in both public and private investments if India has to achieve the projected 8 percent growth rate in the coming years, said an Indian industry study released on Sunday.
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McKinsey predicts that the business process outsourcing industry will support 130,000 jobs in the region by 2008.
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Fifty years after the launch of the first man-made satellite, the global space industry gathers in India next week to find ways to benefit humanity -- and make money in the process.
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Cisco Systems plans to have one-fifth of its top executives in India by 2012, in line with its plan to make India the hub for the development of technologies and new business models for emerging markets.
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Indian outsourcing companies should expand their operations to other low-cost countries if they want to maintain their edge, experts said Thursday at an international software conference.
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Company intends to generate 50 megawatts of electricity from renewable energy forms for its operations by 2012.
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(InfoWorld) - It may now be the turn of Indian companies to offshore outside India their IT services requirements. Indian CIOs will have to consider outsourcing offshore, because of the shortage of IT skills in the country, and inadequate services standards of local service providers, according to research firm Gartner Inc. Indian companies have been looking at India alone for outsourcing, said a spokesman for Gartner India on Tuesday, who asked not to be named. They will now have to look at other locations like Singapore, Hong Kong, and even the U.S., he added. The services offshore will come at a premium to Indian prices, but will at least ensure that Indian CIOs get quality services, the spokesman said. Demand for skilled IT personnel as a result of initiatives like the Indian government's recent national e-governance program (NEGP), and resource-hungry Indian offshore service providers, are outstripping local supply, according to Gartner. Rapid economic growth in India is exacerbating the problem, and local chief information officers areÂ finding it difficult to manage the shortage of skilled local IT resources as internal business units become even more demanding in the area of IT requirements and schedules, the research firm added. Indiaâs gross domestic product (GDP) grew 9.2 percent in the countryâs fiscal year to March. A recent Gartner survey conducted among more than 1,400 CIOs worldwide showed that IT budgets in India had the highest growth of 16.19 percent, compared with an average of 3.16 percent in the rest of the world. Gartner warned in February thatÂ the problem for user organizations in India may only get worse as outsourcing companies start hiring business line managers from user organizations to build their vertical industry expertise. 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, that bring the business knowledge that can be integrated into their services offerings, it added. The focus of Indian outsourcers is primarily on markets in the U.S. and Europe where margins are far higher than in India, according to Gartner. Multinational services companies have targeted outsourcing deals by large Indian companies but the focus so far has been on very large deals, Gartner said in February. If Indian CIOs outsource work offshore, that may get Indian companies to try and reverse the trend, the Gartner spokesman said. An alternative to offshore outsourcing is for Indian CIOs to work with second and third-tier providers in India who are interested in local business, said the Gartner spokesman. The right provider may be able to provide domestic resources and perhaps a higher level of attention to issues and demands, he added. Â