Daily News Updates

[vyomb]

This thread is totally dedicated to daily news and hot and burning topic discussion...
This thread will act as a repository to all the important news and analysis...
here we can discuss post and argue over any current topic also any knowledgable stuff can be posted here
The source of knowledge could be anything..newspapers ..maganizes...
an the topic could be anything under the sun...

Lets contribute to this thread and make it a Habit to read daily....

and Puys please refrain yourselves from spamming...

Mods pls let this thread be on PG...

[vyomb]

In continuation .. my first post on this thread....

well me being an IT coolie...i am really wary about the recession.. so this post will explain ..what the Indian companies are thinking or taking action so as to ward-off the thwart of recession....
have alook youself..
http://economictimes.indiatimes.com/Indian_IT_firms_eye_Japan_to_counter_US_slowdown/articleshow/2745222.cms

Indian IT firms, bracing for an expected slowdown in the US economy, have zoomed in on Japan as a strategic market for future investments.

The Japanese IT market, the biggest after the US, is estimated at around $150 billion. At present, Indian firms get only 2-4% of their revenues from Japan and doubling this could be in their future growth agenda.

TCS, for instance, has built a facility in Yokohama, and set up a Japan offshore delivery centres (JODCs) in Kolkata and Pune. The country's biggest software services company has about 2,000 engineers servicing Japanese customers globally. The Asia Pacific region, including Japan, contributes around 5.5% of its revenues of Rs 5,923 crore in third quarter of FY08.

"Our Kolkata centre is the knowledge hub for Japan. It works with other satellite J-ODCs in China and other global development centers in India to serve Japanese clients," said Ashok Ganesh Pai, deputy general manager, TCS-Japan
According to Jonathan Browne, senior analyst at Forrester Research-Japan, Indian vendors have a chance to diversify into the Japanese market in the long term. But for now, the Japanese market is not ready for offshoring.

Indian firms believe the Japanese market is under pressure to cut costs and raise efficiency. Wipro has around 450 employees in Japan which made up around 3% of revenues last fiscal. Satyam has set up a Japan Centre of Excellence, with around 100 engineers from India, China, Vietnam and Japan.


Comments and arguments are cordially invited

[newbiedelhi]

also plz discuss on kpo sector future? i am real tense as my career is als starting with a kpo. Am i going for a slow death taking kpo as a carrer

[vyomb]

Global economy faces high risks: Moody's- Indicators-Economy-News-The Economic Times

Rarely has the global economy faced as high a level of "transition risk" in recent years as it does today, says Moody's Investors Service in a new report.

While the central scenario remains rather robust, the probability of a highly adverse outcome has increased somewhat, with a number of plausible stress scenarios meriting serious consideration.

The central zone of uncertainty is evidently the US, where the impact of the liquidity and credit crisis on the economic outlook remains unclear, Moody's notes.

"In this context, it remains essential for any micro-level credit analysis to take account of the broader economic and financial context and thus to consider the credit risk implications of a decidedly less favourable outcome for the world economy," explains Pierre Cailleteau, Moody's Chief International Economist and author of the report.

Moody's new report - entitled "Mapping the Near Future: Macro Stress Scenarios for 2008-2009" and the latest in a series of "Global Financial Risk Perspectives" papers - explains what the rating agency views as the baseline for the global economy in 2008-2009 as well as the key factors and developments that underpin this scenario. It then discusses what Moody's considers to be the three possible global risk scenarios.

The objective of this exercise is to increase the transparency of the macroeconomic and financial framework that underpins its credit opinions.

These economic scenarios are intended to help Moody's analysts formulate the outlooks for their specific markets and industries using a consistent set of assumptions that envisage various stressed economic and financial conditions.

"This is not a forecasting exercise, but rather contingency planning based on plausible but unlikely scenarios," adds Mr Cailleteau. Inspired by international organisations' forecasts, the baseline scenario tries to focus on the "medium range".

[vyomb]

Originally Posted by newbiedelhi

also plz discuss on kpo sector future? i am real tense as my career is als starting with a kpo. Am i going for a slow death taking kpo as a carrer

Hi newbie....
u dont have to worry as per the stats..
http://www.outsource2india.com/why_india/articles/KPO.asp

and keep contributing....
Knowledge Process Outsourcing

The evolution and maturity of the Indian BPO sector has given birth to yet another wave in the global outsourcing scene: KPO or Knowledge Process Outsourcing. The success in outsourcing business process operations to India has encouraged many firms to start outsourcing their high-end knowledge work as well. Cost savings, operational efficiencies, access to a highly talented workforce and improved quality are all underlying expectations in offshoring high-end processes to India.
India's intellectual potential

The myth that Indian companies can only provide "software coolies" is soon changing to the reality of Indian companies being capable of almost anything, even rocket science! India has a large pool of knowledge workers in various sectors ranging from Pharmacy, Medicine, Law, Biotechnology, Education & Training, Engineering, Analytics, Design & Animation, Research & Development, Paralegal Content and even Intelligence services.
This talent is soon being discovered and tapped by leading businesses across the globe resulting in the outsourcing of high-end processes to low-wage destinations. Hence Knowledge Process Outsourcing involves offshoring of knowledge intensive business processes that require specialized domain expertise.
The future of KPO

According to a report by GlobalSourcingNow, the Global Knowledge Process Outsourcing industry (KPO) is expected to reach USD 17 billion by 2010, of which USD 12 billion would be outsourced to India . In addition, the Indian KPO sector is also expected to employ more than 250,000 KPO professionals by 2010, compared with the current figure of 25,000 employees. A report by Evalueserve predicts that India will capture more than 70 percent of the KPO outsourcing sector by 2010. Apart from India, countries such as Russia, China, the Czech Republic, Ireland, and Israel are also expected to join the KPO industry.
Comparison of Opportunity in BPO and KPO markets

Low-end outsourcing services have an expected Cumulative Annual Growth Rate (CAGR) of 26% by 2010. In contrast, the global market is poised for an expected CAGR of 46% by 2010. The following figure demonstrates the expected growth in the BPO and KPO markets over the next seven years.
What high-end services can be outsourced to the Indian KPO sector?
Here are some KPO services that can be outsourced to India :

• Research & Development
• Business and Technical Analysis
• Learning Solutions
• Animation & Design
• Business & Market Research
• Pharmaceuticals and Biotechnology
• Medical Services
• Writing & Content Development
• Legal Services
• Intellectual Property (IP) Research
• Data Analytics
• Network Management
• Training & Consultancy

The challenges in KPO

KPO delivers high value to organizations by providing domain-based processes and business expertise rather than just process expertise. These processes demand advanced analytical and specialized skill of knowledge workers that have domain experience to their credit. Therefore outsourcing of knowledge processes face more challenges than BPO (Business Process Outsourcing). Some of the challenges involved in KPO will be maintaining higher quality standards, investment in KPO infrastructure, the lack of talent pool, requirement of higher level of control, confidentiality and enhanced risk management.
Comparing these challenges with the Indian IT and ITES service providers, it is not surprising that India has been ranked the most preferred KPO outsourcing destination owing to the country's large talent pool, quality IT training, friendly government policies and low labor costs.
India is well equipped to meet this emerging sector's challenges and all set to be the global KPO hub.
Discover why Outsource2india is the ideal KPO outsourcing watering hole.
Outsource your Knowledge Processing Requirements to O2I

If you are considering outsourcing your knowledge processing needs, or would just like to know more about the various KPO services that can be outsourced to India, check out O2I's Knowledge Process Outsourcing Services.
We have specialized departments that focus on various areas of Knowledge Processing Outsourcing.

[newbiedelhi]

so is IT industry more in trouble i guess. Kpo shd do well for next 5 yrs atleast..
will IT industry take a hit and will there be job losses. Sometimes i shiver just at thought of what will happen if something goes wrong with INFY/TCS/WIPRO

[no signal]

Originally Posted by vyomb

In continuation .. my first post on this thread....
Indian IT firms, bracing for an expected slowdown in the US economy, have zoomed in on Japan as a strategic market for future investments.
.......................... ........................
Indian firms believe the Japanese market is under pressure to cut costs and raise efficiency. Wipro has around 450 employees in Japan which made up around 3% of revenues last fiscal. Satyam has set up a Japan Centre of Excellence, with around 100 engineers from India, China, Vietnam and Japan.

Comments and arguments are cordially invited

I read this article on hard copy. Coming to the point, what I think is cracking the Japanese market will not be easy and it will take time, considering the present levels or revenues generated from that region. Jumping from 4-5 percent to 40-50 percent will take time. I guess IT majors have started working to build a bigger client base in the asian region. In last quarter result's of all IT majors have been low due to Rupee appreciation. TCS announced cuts in salaries of employees, which is about 1.5% from January - March this year and will be reviewed again. Though WIPRO's performance was above expectations. IT firms may also go for job cuts

I think Indian brands need to diversify themselves both product wise and geographically as well. Wipro, TCS, NIIT, Infosys have started business in China. The most populous country in future there will be immense demand from China and other developing economies. Someone on BBC or CNBC was saying historically it has been noticed that recession doesn't have a huge impact on developing economies. PM and FM said "India's economy is fundamentally strong and recession will not affect us".. Words of confidence or something to hide underlying fear ?

Budget fiscal year 2008-09 will be announced in march expecting some Tax-cuts as preventive measure. Also IT firms are bound to renegotiate this march, I guess new deals will help.

*please correct if am wrong.. just a opinion

[no signal]

The Federal Reserve on Wednesday cut a key interest rate for the second time in just over a week, reducing the federal funds rate by a half point. It signaled that further rate cuts were possible.

The Fed action Wednesday pushed the funds rate to 3 percent. It followed a three-fourths of a percentage point cut on Jan. 22, a day after financial markets around the world had plummeted on fears that the U.S. economy was heading into a recession. That decrease had been the biggest one-day move in more than two decades.

The half-point cut Wednesday followed news that the economy had slowed significantly in the final three months of last year with the gross domestic product expanding at a barely discernible pace of 0.6 percent, less than half what had been expected. The report came amid increased concern from several quarters about a possible recession.

Federal Reserve Chairman Ben Bernanke and his colleagues held an emergency videoconference call on Jan. 21 after a turbulent day on world markets when investors grew increasingly worried about what a recession in the United States would do to the prospects for global growth.

Many analysts believed the Fed would quickly follow last week's aggressive move with a cut of at least a half-point at its first regular meeting of the new year. That view gained support on Wednesday hours before the Fed announcement, when the government reported that the total economy slowed to a barely discernible 0.6 percent growth rate in the final three months of last year.

The increase in the gross domestic product was just half what had been expected and some economists believe that the GDP could tumble into negative territory in the current quarter. One definition of a recession is two consecutive quarters of negative GDP.


However, other economists said they were still looking for just a quarter-point move by the Fed because other reports show the economy appears to be skirting a full-blown recession.


In the category of positive reports was news Tuesday that orders to U.S. factories for big-ticket durable goods jumped 5.2 percent in December, the biggest increase in five months, and demand in a key series that tracks business investment shot up at the fastest pace since last March.
The House, worried about the possibility of a downturn, overwhelmingly approved a $146 billion economic stimulus bill on Tuesday. Passage in the Senate could be slowed by an effort to expand the measure.


Whatever the Fed does Thursday, analysts said that further rate cuts are likely until the central bank is sure that the economy is back on sound footing. Bernanke pledged in a speech on Jan. 10 to take decisive action to combat a slowdown. Many economists believe the funds rate could fall to 2.5 percent before the Fed stops easing.


"It is clear that the Fed has moved into a crisis-fighting posture," said David Jones, chief economist at DMJ Advisors.
----
Fed Cuts Interest Rates by 1/2 Point - TIME

[vyomb]

http://economictimes.indiatimes.com/...ow/2754171.cms
Is IT dead? And is the stock market about to write the obituary of the information technology (IT) sector? Or, has it already done it? The sector, which appeared almost invincible not so long ago, is now under siege from investors and analysts alike.
Its future prospects have also come under a cloud on fears that the US economy is hurtling towards a recession which, in turn, will trigger off a global economic slowdown.

So, are the curtains finally coming down on the sector, or is there still some steam left? ETIG tried to find the answers to these questions and concluded that all is not over for yesteryear’s poster boys of Dalal Street.

IT stocks were laggards in ’07, even as the broader market continued to witness a bull run. The 30 components of the ET Infotech index lost over 5% during the year, while the BSE Sensex gained 45.5%. IT scrips could not escape the recent bear hug as well. Here again, the 20% drop in ET Infotech was sharper than the 13% fall in the Sensex. The market turmoil has also caused these scrips to trade at historically low price-toearnings (P/E) multiples.

Interactions with industry observers and analysts reveal a common thread. There seems to be a consensus that stocks of IT exporters, especially the top companies, are attractive at the current levels for long-term investors. The argument is largely based on the commonly used P/E valuation method.

[vyomb]

domain-b.com : Indian IT services market to grow to $10 billion by 2011: Gartner
Even as user organisations continue to grapple with the high attrition rates in internal IT departments, the Indian IT services market is pegged to grow to $10.73 billion by 2011 at a five-year compounded annual growth rate (CAGR) of 23.2 per cent, according to Gartner, Inc.

Key factors driving growth are agility, growth, cost takeout and innovation. But a factor which is acting as a prime impetus for companies to consider external service providers (ESPs) is the continuous turnover rates of key IT staff in the range of 15 to 20 per cent.

''Growth of the IT services market is primarily being driven by economic growth, high growth among the small and midsize businesses (SMBs), government projects and increased customer focus,'' said Arup Roy, senior research analyst, Gartner. ''Many IT service providers, multinational companies (MNCs) and domestic have now recognised this potential and developed strategies exclusively for the domestic market. Many IT organisations are planning to spin off their IT organisation into an independent entity to capture the growing opportunities,'' added Roy.

The market segments that are expected to witness the strongest growth are consulting, IT management and business process management (BPM) services with five year CAGRs of 28.1, 23.8 and 27.1 per cent, respectively. Consulting revenue, although coming from a small base, grew 30.1 percent to $340 million in 2006 compared with 2005.
As companies mature in their overall approach towards IT, it becomes more complex and sophisticated; they invariably have to rely on external providers to help them with consulting services. IT management revenue grew 27.3 per cent from 2005 to $549 million in 2006. Increased adoption of remote infrastructure management services has driven the development of network operation centres / security operation centres, remote management centres and other managed service offerings from ESPs.

BPM in India is a high growth area that is moving beyond traditional customer relationship management (CRM) services. The primary challenges that are driving organisations to engage business process outsourcing (BPO) are cost, growth and business innovation. The primary objectives of BPO engagements are productivity improvements, process/business transformation, and cost-containment to improve profits.

Table 1 India: IT Services Market Forecast by Segment, 2006-2011 (Millions of Dollars)
200720082011CAGR (%)
2006 - 2011Hardware Maintenance and Support8681033172420.7Software Support774950177124.8Consulting474607117428.1Devel opment and Integration17652125351621.1IT Management743915159823.8Process Management40651094827.1Total503161401072923.2
Source: Gartner (December 2007)

Both global and Indian vendors have leveraged these growth areas and the top three vendors, IBM, Tata Consultancy Services (TCS) and Wipro Infotech, together accounted for 26.1 per cent of IT services vendor market share in 2006.
In 2006, IBM surpassed TCS to become the top vendor, taking 11.2 per cent market share. TCS and Wipro occupy the second and third positions with 10.9 and 4.1 per cent market shares, respectively. However, the Indian IT services market is still fragmented, with the majority of the market being serviced by smaller local players that account for close to 40 per cent of the IT services market.

Commenting on the vendor landscape, Roy said, ''As the market matures, competition will intensify and then lead to consolidation. Vendors that are unable to find a niche for themselves, or smaller vendors with no real differentiators, will be acquired by larger, more-aggressive competitors. End user IT organisations or captive unit spin-offs will have a difficult time in competing with well-established providers unless they also find their own niche.''