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 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/

IBM India, a local unit of International Business Machines Corp , said on 1 June that it has received an information technology contract from MTS India, the mobile telephone services arm of Shyam Sistema TeleServices Ltd, or SSTL. The company said that under the agreement it will design and build two data centres, one in Chennai and the other in Gurgaon, intended to support SSTLs plans to expand its pan-Indian telephony services. SSTL, a 74:26 joint venture between Russias Sistema JSFC and Indias Shyam Group, entered a tie-up with Russias Mobile TeleSystems to launch mobile services under the MTS brand in India.

The green data centres, which are energy efficient, will help SSTL achieve 20 per cent energy savings, it added.

SSTL is a joint venture company between Russias Sistema and the Shyam Group of India.

As a global telecom player with ambitious expansion plans for the Indian market, we are aware of the advantage of adopting energy-efficient operational measures and in the process will work proactively to reduce global energy emissions, SSTL President and Chief Executive Officer Mr Vsevolod Rozanov said.

While the Chennai site will serve as the main data centre for SSTL, the Gurgaon site will be the companys disaster recovery site.

SSTL is already providing telecom services in Rajasthan, Tamil Nadu and Kerala and has acquired licences and spectrum to provide mobile telephony services in all the 22 circles across the country under its MTS brand name.

IBM India will also build a network operations centre for SSTL. IBMs designs will include energy saving systems to reduce costs for SSTL. The Chennai site will serve as the main data centre for SSTL with the Gurgaon data centre serving as the disaster recovery site.

Source: http://www.offshoringtimes.com/

KOLKATA: NASSCOM has projected that some 30,000-40,000 students will be absorbed by IT companies this fiscal. Talking to ET, Nasscom president Som Mittal said: “Typically, we take one to two lakh people annually into our industry. In the current fiscal, we had made offerings to 80,000 fresh graduates, of which we are expecting that some 30,000-40,000 will join.”

He further added: “This year, we have asked companies to recruit those who have completed their eighth semester to ensure that hiring is closer to the need of companies. This is being done, so that companies don’t have a huge talent pool who are in the pipeline to join the industry.”

Asked about the outlook of the industry in 2010-11, He said the industry was on a wait-and-watch mode about the growth in FY11. “We will review the situation in December this year. We have already reached end of the recession. By end of the calendar year 2009, we expect deals, some large deals are coming up.”

Mr Mittal said the industry in the past one year has witnessed slowdown in growth, as a result of the global crisis. Nasscom estimates for the IT-BPO industry for 2009-10, include export growth at 4-7% and domestic market growing at 15-18%.

While uncertainty prevails, the sentiment now being reflected is that the worst of the crisis is over. “The industry has demonstrated maturity, resilience and enhanced efficiency. Of specific interest was the growth in domestic market, a three-fold growth in emerging verticals and geographies, enhanced globalisation and over 90% repeat business from clients in this tough environment,” he said.

Mckinsey & Company in its report on the perspective of the IT industry by 2020 has given the current pace of reforms and expected constrains in talent and infrastructure supply, the exports component of the Indian IT industry is expected to reach $175 billion in revenues by 2020.

The domestic component will contribute $50 billion in revenues by 2020, which is larger than the total exports revenues for India now.

The Nasscom president said the during the recessionary period the IT industry has invested in new verticals and geographies, which would start yielding results shortly. “Continental Europe, Latin America, the Middle-East, Japan and Korea remain the new emerging markets for IT industry,” he said.

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