IT Outsourcing India

Bangalore: Following the economic slowdown every industry has suffered, for Indian outsourcing firms particularly it has meant lower pays and more competition. For Indian engineers with two to five years of experience, the past 12 months actually saw them lose nearly seven percent of their income. The competition that the Indian outsourcing industry faces has also intensified.

The national average raise, according to a survey by IDC, the market intelligence firm, was about 1.4 percent, with most of the salary gains going to those with the most experience. This is a huge change from the boom years of Indian outsourcing, when wages rose regularly by double digits. They increased 18 percent in 2007-08 alone, and close to 30 percent per year for the five previous years, reports BusinessWeek.

The 2010 fiscal year, which ends in March, will be the first time the industry’s top players will see a revenue decline, according to their own predictions. Infosys expects a 3.1 percent decline in revenue to about $4.5 billion and Wipro expects revenues for the quarter ended Sept. 30 to drop to $1.05 billion from $1.11 billion a year earlier.

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New report by research firm XMG Global sees the market growing 14.4% this year, with India and China as the top two countries

In the report by Canada-based research firm XMG Global, India and China were singled out as the market’s top revenue generators, pulling in revenues worth US$48 billion and US$28 billion, respectively.

According to Vincent Altez, senior analyst at XMG, India will account for 44.8 percent of the global market, while China will hold at 25.9 percent. India’s market share is expected to remain similar over 2008, due in large to accounting adjustments following Satyam’s financial scandal and demand moving to other offshore countries.

Altez said in the report: "We are seeing new levels of normalcy in which the recession has provided the opportunity to rationalize, and shift work to other offshore destinations other than India.

XMG named the Philippines as the third-best performing destination, growing an estimated of 21.7 percent to register US$7.3 billion in revenues by year-end. The figure is still lower than the initial forecast of 24 percent, the research firm noted, where demand has been sluggish due to slower growth for IT services and delay in expansion plans by major market players in the country.

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Mphasis, a leading applications services, remote infrastructure services and business process outsourcing service provider, today announced that it will change its branding identity to become Mphasis an HP Company.

Mphasis continues to operate as an independent subsidiary of HP with its own board of directors. The company has seen stellar growth in its revenue with the growth of its business from HP as well as direct customers.

During the third quarter of fiscal year 2009. The Mphasis group, consolidated revenue was at Rs 1,105.6 crores and operating profit up by 132.8 per cent year on year.

Source: http://www.business-standard.com/

NEW DELHI: US-based venture capital firm New Enterprise Associates (NEA) is close to picking up a minority stake in Delhi-based RT Outsourcing, a company that offers repair and refurbishment services, technical support and call centre operations to third-party companies.

Although the exact deal size could not be ascertained, a person familiar with the development pegged it at Rs 65-75 crore. “Talks are at an advanced stage and the transaction is expected to close next week,” said the person, on condition of anonymity.

This would be the third round of capital infusion in RT Outsourcing. The other two VC funds, which invested in the firm, are Motilal Oswal and Sonoma Management Partners.

Motital infused Rs 31 crore in 2007, while the figures for Sonoma are not known. Emails sent to both RT Outsourcing and NEA did not elicit any response.

RT Outsourcing was established in 1995 and its clients include Microsoft, Ericsson, HP and Honeywell, among others. The company has a headcount of over 3,500 people across India.

The funds raised will be used by RT Outsourcing to set up a global repair plant in Chennai. Currently, it runs around 415 repair centres of which 60 are company owned and run. The rest are operating as franchisees.

NEA manages assets worth over $8.5 billion globally. Its India, its advisory team comprises Ben Mathias (vice-president), Jerry Rao and Amit Sharma (both venture advisors).

The firm was recently in news when ICICI Venture’s senior director Bala Deshpande joined the investment team.

NEA’s India investments include Sasken, Novatium and ISGN Technologies. NEA also runs an affiliate fund in India called NEA-Indo US Ventures.

Source: http://economictimes.indiatimes.com/