Avastu Blog: Sustainable Global Clouds

Contract Winners: IBM CACI SRA Alcatel Lucent CSC Science App International Corp. Worth: $550 Mn Clients and Duration of contracts is obviously something you'll have to find out yourselves ;-) And this was just one week!

Tier-1 global service providers such as Accenture, ACS, Cognizant, Capgemini, CSC, EDS, Genpact, HP, IBM, Infosys, LogicaCMG, TCS, Satyam and Wipro continue to increase their global presence. The difference is that service providers such as IBM and Accenture are looking to tier-2 and tier-3 Indian cities for expansion, while the Indian providers Infosys, TCS and Wipro are heading toward cities in South America and Eastern Europe. In a way, the choice of the right city has become more important than the choice of the country. It is rather the city (than the country), which represents a more accurate package of attributes that service providers seek. Thus, Cebu City and Monterrey matter more than the Philippines and Mexico from a decision-making standpoint. This study identifies those locations that are globally recognized for their “specific” outsourcing services offerings as well as the ones that are establishing themselves as specialized locations for particular outsourcing functions....

HCL Technologies' acquisition strategy is three fold; smaller tuck-in buyouts are targeted towards purchasing firms that bring intellectual property (IP) to the company. The company sees these buyouts are in the range of $100 million and less. Some of the recent acquisitions like Capital Stream, Liberata Financial Services and Control Point Solutions fall in this category. The IT giant is also scouting for Japan and Germany as part of its second level of inorganic growth strategy to expand its geographic reach. Apart from these, HCL's plan includes big buyouts that it calls 'transformation acquisitions'. "Next two years will be crucial for HCL Technologies because of our proactive research and search for transformation acquisitions. We are active in all three zones of acquisitions and we have a good balance sheet to fund our plans," said Vineet Nayar, CEO, HCL Technologies. The company has cash reserves of $580 million. When asked about the impact of the re...

Satyam is firing about 4500 employees , Wipro fired some 3000 employees , Patni fired some 400 people , TCS got rid of some 500 beginning this year and a lot of other smaller firms, all firing non-performing staff .

NEW DELHI: Amidst news of pink slips at Wipro, Infosys Technologies Ltd has some good news for tech geeks. The country’s second-largest software-services company plans to recruit 25,000 people this year. Infosys may also recruit about 1,000 workers in China in the next two to three years, according to CEO Senapathy Gopalakrishnan. The company also has plans for “selective” acquisitions in the pipeline. It plans to add capacity in China, Eastern Europe and Latin America, he added at a conference in Singapore. “We’re looking at consulting and geographical expansion in Europe and the emerging markets like India and the Middle East,” Gopalakrishnan said. “We want to be very selective in acquisitions.” The plans aim at narrowing Tata Consultancy Services Ltd’s lead and boost revenue in Europe as customers in the US delay orders. Source

With Infosys buying in UK (although that may not have anything directly to do with the euro weakening, it was the pound that took the pounding that prompted Infosys to go strike). Will the increasingly euro lead to Asia companies going after SI and other Consulting firms within the Euro such as CapGemini etc? The Ifo index had been expected to fall this month, but recent falls in oil prices and the euro – which has dropped about 8 per cent since its mid-July peak against the dollar – had been expected to boost optimism about the future. The latest weak data sent warning signals to the European Central Bank, said Julian Callow at Barclays Capital. “Even Europe's biggest economy, which had in recent quarters been supporting overall euro area growth, is stalling - providing further evidence that the euro area will require an easing in monetary conditions,” he said. The ECB publishes revised eurozone forecasts next week but with inflation in the 15-country region still double its targe...

Tata Consultancy Services Ltd, India's top software exporter, said on Tuesday it had received a multi-million dollar contract from Singapore Airlines Cargo for a five-year period. Source

And so it begins… An acquisition of this kind, whereby one of the Indian IT giants acquires a sizeable Western IT services provider, has long been predicted. Factors such as currency fluctuation, employee churn and the rise of alternate offshore destinations are threatening to curtail the phenomenal success of the Indian IT outsourcing industry. Companies such as Infosys, Wipro and TCS are therefore eager to increase the value of the contracts they can offer their Western clients, moving from application development donkey-work to the kind of consultative partnership that the likes of Accenture and IBM have with their clients. To do this, however, requires local presence and a caliber of consultant that their vast software campuses are not yet geared to producing. And while they have cash in reserves and the rupee is strong, now is an ideal time for Indian IT providers to buy those in. Analysts predict that Infosys’ Axon deal will be the first of many ‘outbound’ acquisition...

CGSL is mostly into transaction processing and call centre processing which suits TCS. The Tata group company pulled out of Intelenet, a third party BPO backed by Blackstone, as it wanted to exit from the voice-based BPO sector. Its MD S. Ramadorai had earlier said that Intelenet’s focus did not fit into TCS’ BPO strategy which was focussed on transaction processing, e-mail processing and call centre processing. Both Citigroup and TCS declined to comment on the development. “At Citi, we follow the policy of not commenting on market rumours and speculation. Accordingly, we are unable to respond to your request.” said a Citi spokesperson in an e-mailed response. A TCS spokesperson said “As a policy, TCS does not comment on market speculation.” IBM was the other contender for the captive BPO unit, said another source. IBM was also believed to be keen on acquiring Citos, the technology and infrastructure outsourcing arm of Citigroup. “ But Citi intends to sell CGSL first. And IBM found the...

According to new research from Kennedy Information, "The Asia Pacific Consulting Marketplace 2008-2011: Key Trends, Profiles and Forecasts," China's unique need for localized firms -- combined with limitations in its education system -- are leading to a scarcity of consulting talent. The situation is, according to many consultancies in China, the sole issue limiting growth. Still the China consulting market is expected to achieve over 20% CAGR over the research's forecast period of 2011, and the Asia Pacific region overall maintains it status as the highest growth market in the consulting world today. "Even in 2005, interest in the APAC region was driven primarily by opportunistic servicing of growing domestic consulting demand in each market and the wish to support global clients in their endeavors in Asia Pacific," states analyst Damien Blenkinsopp. "Today, a much larger group of firms has moved toward an overall strategic interest in the APAC region....

This is indeed shocking for HP ( NYSE:HP ). HP has a big challenge of integrating EDS and the time it needs to do it will also tell how many new contracts they can keep. In this deal HP was supposed to dave $1 Billion for its (now lost) client. I guess people in DT got smarter and did the math themselves. These days a lot of firms are asking for independent advise. In the past months I have done a lot of calls myself to discuss deal that were as big as $500 Million to some multi-billion mergers/acquisitions. So why would someone ask a lone ranger, a nutcase blogger about it for advise. The answer was simple: They preferred to invest horizontally and vertically across several domains rather than just asking Gartner or any other advisor firm. A lot of firms lately are taking advise from independent consultants and advisors. Obviously I do feel proud at times when I see an international announcement of a merger, acquisition or other investment is where I participated as well. Anyways back...

As part of this new contract, Atos Origin will manage all infrastructure services for NXP’s core business 24/7 to help consolidate and optimize all global manufacturing and engineering data centres. These services, which comprise consulting and outsourcing services, are based on Atos Origin’s global sourcing strategy. Atos Origin and NXP will work with jointly agreed key performance indicators including systems availability, continuous service, cost reductions and output performance levels. This indicates the strategic importance to NXP and high level of confidence that Atos Origin holds to perform according to set targets. "We have been working with Atos Origin for many years, and they have proven to be a reliable partner that generates results. For this deal which supports our core business, we need a partner with international presence and who knows our business. Our strategy focuses on increased efficiency by returning to our core activities, and Atos Origin will be our long-t...

This one is pretty optimistic about India: Two other Indian cities also made it to the top 10 list--New Delhi edged out Manila for the number two spot, while Mumbai dropped three places from last year's list to seventh. Jenna Griffin, senior research analyst for global delivery services research at IDC Asia-Pacific, told ZDNet Asia that Bangalore and New Delhi were attractive due to existing infrastructure, large quantity of skilled workers as well as competitive pricing. She noted, however, that the appreciating rupee was eroding the cost arbitrage. Auckland and Beijing made significant progress over last year, moving up five and three notches, respectively. Griffin said Auckland's ranking was influenced by factors such as greater government support, an increased emphasis toward a digital economy and currency depreciation. On the other hand, the investment into Beijing's infrastructure and the environment for the upcoming Olympic Games has sharpened the city's competit...

What I have to tell you in the coming articles? Virtualization : Industry insiders are pushing me and telling me things such as the "The Big KVM surprise entry where VMware is soon to be relegated to being just one of the many virtualization vendors". Clearly the triangle is going to be KVM (vendors who will come up with a variety of offerings both on desktops and server families), Xen (which will have to find its way seriously into cloud computing to keep its differentiation alive) and find a sweeter embrace with the Microsoft in order to ride the Hyper-V wave and VMware, which will basically have to deal with the inevitable- that is decreasing market cap and market share". Global Economy and Global Sourcing : Here I will talk about " The Great Unjaring " Mashup Sourcing Framework : Here I will detail out, as I have done in the past, with several angles such as agile LOBs, Horizontal approach and Spreading the risks, but this one will focus and will go a step ...

IT outsourcer Infosys ’s clients are increasingly dissatisfied with the company’s service, according to a respected report into the IT outsourcing industry. The 2008 Black Book of Outsourcing State of the Industry Report ranked Infosys 56th for client satisfaction after polling customers. The previous year it was in the top 10. “[Infosys] clients reported a noticeable shift from customer service to corporate revenue generation, and a corporate culture that has become disappointingly elitist,” the report found. Infosys is emblematic of the Indian IT industry as it struggles to withstand changing macro-economic forces and graduate beyond simply being a service provider to become a strategic partner to its clients. The company’s approach to that challenge is examined in a profile in the new issue of Information Age magazine. The findings of this new report suggest that in its quest to become a strategic partner, the company may have sacrificed simple customer service. Rest is here ...