Hyderabad: The Andhra Pradesh Chief Minister, Mr N.Kiran Kumar Reddy, today held parleys with officials of the World Bank and made a case for more engagement in irrigation, roads, rural schemes and other social sectors.
A delegation of the World Bank headed by Mr. Hubert Nove Josserand, Operations Adviser, World Bank, New Delhi, and Mr Venu Rajamani, Joint Secretary, Department of Economic Affairs (DEA), met the Chief Minister at the secretariat on Monday. The delegation included several sector specialists and economists.
During the discussion, the Chief Minister cited the good track record of the State in implementing several of the World Bank projects and sought its assistance for projects in the irrigation, Tank Reliant Irrigated Area Development project, AP Post Flood Project, support project for Urban SHGs (self-help groups) and for the Health Systems Strengthening Project.
According to a statement from the Chief Minister's Office, the State Government is implementing six World Bank assisted projects with an outlay of Rs 11,230 crore, of which the World Bank share is Rs 6,613 crore and the State Government share Rs 4,617 crore. These include AP Road Sector Project with an outlay of Rs 3,165 crore with a World Bank share of Rs 1,568 crore and the GoAP share of Rs1,597 crore. The project envisages better quality and safe roads in sustainable manner.
The total assistance from the World Bank was Rs 10,696 crore.
Success in my Habit
Wednesday, January 25, 2012
YouTube surpasses 4 billion video views per day
Google recently confirmed that YouTube now receives more than 4 billion video views per day.
Reuters reported the news Monday morning and noted that the site has seen a 25% increase in videos viewed per day since May. Google, which owns
YouTube, also confirmed that there are more than 60 hours of fresh video uploaded each minute, up from the 48 hours of video added per minute in May. Advertisements on videos generate roughly $5 billion in revenue each year, Reuters said, but just 3 billion videos feature ads each week. The growth in viewership was attributed to users accessing the service from
Reuters reported the news Monday morning and noted that the site has seen a 25% increase in videos viewed per day since May. Google, which owns
YouTube, also confirmed that there are more than 60 hours of fresh video uploaded each minute, up from the 48 hours of video added per minute in May. Advertisements on videos generate roughly $5 billion in revenue each year, Reuters said, but just 3 billion videos feature ads each week. The growth in viewership was attributed to users accessing the service from
Why foreign travel is no more an incentive for techies
For IT engineers, the periodical one- or two-year stints in the US or Europe used to be the primary attraction of their jobs. They not only got to live in places that most Indians aspire to but, during those stints, they also received salaries substantially higher than in India and which allowed them to make significant savings. For business development professionals in IT, foreign travel used to be for shorter stints, but more frequent.
But that opportunity for travel is now fast diminishing for economic, business, diplomatic, strategic and technological reasons.
Foreign customers are asking IT vendors to maintain only a minimal staff onsite, given that they have to pay more for such staff, something they would like to avoid in the current dull economy. Visa and immigration rules have become extremely stringent, leading to a large number of visa rejections - 50% in L1 visa applications , 10% in H1 applications and 30% in the B1 category.
Indian IT providers are enlarging their local talent pools in customer markets in order to overcome the visa challenge, as also the political pressure in Western markets to hire locally. Some have even started hiring freshers from American and European university campuses. Such hiring means they need fewer Indians to travel to customer locations.
And finally, technologies like cloud computing, mobility, remote infrastructure management and Web collaboration solutions have made the aspect of physical presence in client locations less necessary.
BS Murthy, CEO of executive search firm HumanCapital, says foreign travel used to be the biggest carrot dangled by recruitment and HR heads till some time ago, but not any more. "Earlier, techies with two years of experience and more used to make three-four foreign trips to multiple geographies a year.
Today , travel is extremely limited, needbased and only cherry-picked senior people in business development, client engagement/delivery and consulting are traveling, and not so much the young crowd." Indian IT's body shopping phase of the 1990s had witnessed 100% of employees being onsite, at client locations overseas. The first half of the decade 2000-2010 saw the emergence of a hybrid model, with 60% of the staff in India, and 40% overseas. In subsequent years it came down to 70:30, and more recently it is said to be 80:20 and even 85:15 for many companies.
Mahalingam C, HR head at Symphony Services, says cost-conscious clients are trying to get as much work done offshore . But the basic premise of the offshore model, he says, is not just cost arbitrage , but speed-to-market and ability to follow the sun (being able to work 24 hours). "Companies today are diversity-conscious , want to be truly global players, are keen to be known in customer geographies and want to be an integral part of local communities and local activities. Therefore, they are hiring big time in the US and Europe and that has reduced the quantum of tech travel from India," adds Mahalingam.
SD Shibulal, CEO of Infosys Technologies , says, "Clients do have a say on the size of onsite staffing and also we are hiring in customer markets. So it's possible that travel from India has reduced."
Ravishankar B, senior VP at HCL Technologies, says countries across the globe are viewing immigration issues in a different perspective. "So, what is critical today is under what methodology you send people, where, and to do what. The preference goes to local talent . In the last year or more, we have been trying to create a lot of local jobs close to our customers."
But that opportunity for travel is now fast diminishing for economic, business, diplomatic, strategic and technological reasons.
Foreign customers are asking IT vendors to maintain only a minimal staff onsite, given that they have to pay more for such staff, something they would like to avoid in the current dull economy. Visa and immigration rules have become extremely stringent, leading to a large number of visa rejections - 50% in L1 visa applications , 10% in H1 applications and 30% in the B1 category.
Indian IT providers are enlarging their local talent pools in customer markets in order to overcome the visa challenge, as also the political pressure in Western markets to hire locally. Some have even started hiring freshers from American and European university campuses. Such hiring means they need fewer Indians to travel to customer locations.
And finally, technologies like cloud computing, mobility, remote infrastructure management and Web collaboration solutions have made the aspect of physical presence in client locations less necessary.
BS Murthy, CEO of executive search firm HumanCapital, says foreign travel used to be the biggest carrot dangled by recruitment and HR heads till some time ago, but not any more. "Earlier, techies with two years of experience and more used to make three-four foreign trips to multiple geographies a year.
Today , travel is extremely limited, needbased and only cherry-picked senior people in business development, client engagement/delivery and consulting are traveling, and not so much the young crowd." Indian IT's body shopping phase of the 1990s had witnessed 100% of employees being onsite, at client locations overseas. The first half of the decade 2000-2010 saw the emergence of a hybrid model, with 60% of the staff in India, and 40% overseas. In subsequent years it came down to 70:30, and more recently it is said to be 80:20 and even 85:15 for many companies.
Mahalingam C, HR head at Symphony Services, says cost-conscious clients are trying to get as much work done offshore . But the basic premise of the offshore model, he says, is not just cost arbitrage , but speed-to-market and ability to follow the sun (being able to work 24 hours). "Companies today are diversity-conscious , want to be truly global players, are keen to be known in customer geographies and want to be an integral part of local communities and local activities. Therefore, they are hiring big time in the US and Europe and that has reduced the quantum of tech travel from India," adds Mahalingam.
SD Shibulal, CEO of Infosys Technologies , says, "Clients do have a say on the size of onsite staffing and also we are hiring in customer markets. So it's possible that travel from India has reduced."
Ravishankar B, senior VP at HCL Technologies, says countries across the globe are viewing immigration issues in a different perspective. "So, what is critical today is under what methodology you send people, where, and to do what. The preference goes to local talent . In the last year or more, we have been trying to create a lot of local jobs close to our customers."
Pharma retail market grows 15% in 2011
Mumbai: Domestic pharma retail market clocked a robust 15% growth during 2011, mainly driven by therapies like anti-diabetic, vitamin, anti-infectives and dermatology. The pharma sector continued to show its resilience amid slowdown concerns in the economy with December posting a strong growth, with anti-infectives back in favour during the month. The domestic pharma retail reached a new milestone by recording overall sales of Rs 60,000 crore for the year 2011.
The pharma market grew at 15.7% during December, with growth in key therapy areas, including anti-diabetics, derma and vitamins outperformed the market, data compiled by market research firm AIOCD (All India Organization of Chemists and Druggists) said. While the growth in anti-infectives and pain and analgesics at 11% and 12.1%, respectively, grew slower than the market during the month.
During December 2011, the companies that reported a strong year-on-year growth significantly above the pharma market include Glenmark (35.3%), Sun Pharma (27.5%), Pfizer (27.9%) and IPCA Laboratories (21.6%). While Sun has grown more consistently due to its large presence in the chronic segment, Glenmark and Ranbaxy have seen bouts of high and low growth due to larger acute dependence, experts say.
The laggards for the month include Ranbaxy (5.1%), Zydus Cadila (9.8%), Dr Reddy's (11.0%) and Cipla (13.6%), an analyst from Nomura stated.
Also, during December, Sun remains the fastest growing company in the top 10, and Macleod's clocked growth in range of 40% level.
The top pecking order in terms of market share was led by multinational Abbott (6.11%), and followed by Cipla (5.14%) and GlaxoSmithKline (4.86%) at the second and third slots during the mont
The pharma market grew at 15.7% during December, with growth in key therapy areas, including anti-diabetics, derma and vitamins outperformed the market, data compiled by market research firm AIOCD (All India Organization of Chemists and Druggists) said. While the growth in anti-infectives and pain and analgesics at 11% and 12.1%, respectively, grew slower than the market during the month.
During December 2011, the companies that reported a strong year-on-year growth significantly above the pharma market include Glenmark (35.3%), Sun Pharma (27.5%), Pfizer (27.9%) and IPCA Laboratories (21.6%). While Sun has grown more consistently due to its large presence in the chronic segment, Glenmark and Ranbaxy have seen bouts of high and low growth due to larger acute dependence, experts say.
The laggards for the month include Ranbaxy (5.1%), Zydus Cadila (9.8%), Dr Reddy's (11.0%) and Cipla (13.6%), an analyst from Nomura stated.
Also, during December, Sun remains the fastest growing company in the top 10, and Macleod's clocked growth in range of 40% level.
The top pecking order in terms of market share was led by multinational Abbott (6.11%), and followed by Cipla (5.14%) and GlaxoSmithKline (4.86%) at the second and third slots during the mont
India's economic growth to remain robust: UN report
New Delhi: India's economic growth is expected to remain robust in 2012 and 2013, despite likely headwind of double-dip recessions in Europe and the US. This has been highlighted in the World Economic Situation and Prospects 2012, the United Nations' annual economic report released today.
Indian economy is expected to grow by between 7.7 per cent and 7.9 per cent this year, the report said. South Asia's economies are expected to grow by 6.7 per cent this year and 6.9 per cent next year, accelerating slightly from 6.5 per cent last year.
Robust domestic demand will sustain this increase (in South Asia), but the economic slowdown in India, where growth declined from 9 per cent in 2010 to about 7.6 per cent last year, brings down the regional average, the report said. South Asia comprises India, Pakistan, Nepal, Iran, Bangladesh and Sri Lanka.
On Inflation
Among the major developing countries, growth in India and China is expected to remain robust. Brazil and México are expected to suffer a more visible economic slowdown.
The UN report expects inflation in most developing countries to decelerate this year, along with an anticipated moderation in global commodity prices and lower global growth.
Fiscal Deficit
On fiscal deficit, the report said that the Indian Government is unlikely to achieve its fiscal deficit target of 4.7 per cent of the gross domestic product for 2011-12 as lower growth has brought down tax revenues and disinvestment in state-owned entities has been put on hold.
On the global economic prospects for 2012 and 2013, the report noted that the world economy is on the brink of another major downturn and anaemic growth is expected during 2012 and 2013.
Indian economy is expected to grow by between 7.7 per cent and 7.9 per cent this year, the report said. South Asia's economies are expected to grow by 6.7 per cent this year and 6.9 per cent next year, accelerating slightly from 6.5 per cent last year.
Robust domestic demand will sustain this increase (in South Asia), but the economic slowdown in India, where growth declined from 9 per cent in 2010 to about 7.6 per cent last year, brings down the regional average, the report said. South Asia comprises India, Pakistan, Nepal, Iran, Bangladesh and Sri Lanka.
On Inflation
Among the major developing countries, growth in India and China is expected to remain robust. Brazil and México are expected to suffer a more visible economic slowdown.
The UN report expects inflation in most developing countries to decelerate this year, along with an anticipated moderation in global commodity prices and lower global growth.
Fiscal Deficit
On fiscal deficit, the report said that the Indian Government is unlikely to achieve its fiscal deficit target of 4.7 per cent of the gross domestic product for 2011-12 as lower growth has brought down tax revenues and disinvestment in state-owned entities has been put on hold.
On the global economic prospects for 2012 and 2013, the report noted that the world economy is on the brink of another major downturn and anaemic growth is expected during 2012 and 2013.
Karnataka Govt to revamp schemes for youth
Mangalore: The Karnataka Government will introduce new programmes in the larger interest of youths in the State.
Speaking at the valedictory of the 17th National Youth Festival in Mangalore on Monday, the Chief Minister, Mr D.V. Sadananda Gowda, said his Government will take a lead from this youth festival and will revamp the schemes and introduce new programmes through the Department of Youth Services and Sports in the larger interest of youth.
Stating that the Karnataka Government has been generous in budgetary allocation for developing infrastructure under the Department of Youth Services and Sports, he said the festival emphasises the need to infuse young blood and vigour at all levels of administration, especially at the grassroots levels of the Department of Youth Services and Sports.
“My Government is committed to this by enabling the latent potential of youth power in its entirety to work towards nation building activities,” Mr Gowda said.
The training programmes in life skill development will be strengthened and the scope will be expanded to imbibe the teachings of Swami Vivekananda, he said.
Mentioning that there is a surge in the population of youth in Asia and India, he said: “Our work towards enabling the youth of this nation has hitherto not been given the importance it deserves.”
The Youth Festival in Mangalore has uncovered and highlighted the significance of Youth Services and Sports department in bringing the youth from various backgrounds into the mainstream and giving them an opportunity to realise each individual's contribution in nation building, he added.
Speaking at the valedictory of the 17th National Youth Festival in Mangalore on Monday, the Chief Minister, Mr D.V. Sadananda Gowda, said his Government will take a lead from this youth festival and will revamp the schemes and introduce new programmes through the Department of Youth Services and Sports in the larger interest of youth.
Stating that the Karnataka Government has been generous in budgetary allocation for developing infrastructure under the Department of Youth Services and Sports, he said the festival emphasises the need to infuse young blood and vigour at all levels of administration, especially at the grassroots levels of the Department of Youth Services and Sports.
“My Government is committed to this by enabling the latent potential of youth power in its entirety to work towards nation building activities,” Mr Gowda said.
The training programmes in life skill development will be strengthened and the scope will be expanded to imbibe the teachings of Swami Vivekananda, he said.
Mentioning that there is a surge in the population of youth in Asia and India, he said: “Our work towards enabling the youth of this nation has hitherto not been given the importance it deserves.”
The Youth Festival in Mangalore has uncovered and highlighted the significance of Youth Services and Sports department in bringing the youth from various backgrounds into the mainstream and giving them an opportunity to realise each individual's contribution in nation building, he added.
Budget 2012 to herald changes in line with planned GST
New Delhi: The finance ministry is likely to introduce a slew of measures in the budget to prepare the ground for the proposed goods and services tax that is yet to be approved by the states.
The indirect tax reforms are expected to withdraw some fiscal stimulus measures, raise excise on diesel cars and cigarettes and switch over to a negative service tax list. This would help the government align taxes with a unified GST, the country's most comprehensive indirect tax reform, and also raise additional revenue.
"The idea would be continue with what was initiated in the last budget... a full-fleged GST would be the culmination of the reform process, but that would take time," said afinance ministry official.
The finance ministry may opt for a gradual increase in excise rates because of the current slowdown even though policymakers say that the fiscal stimulus should be fully withdrawn. After the 2008 financial crisis, the government had cut excise duty from 14% to 8% and service tax was brought down to 10% from 12%.
"We should go back to the rates that prevailed before the crisis," C Rangrajan, chairman Prime Minister's Economic Advisory Council had told ET in an interview earlier this month. The North Block, which houses the ministry, is also studying a proposal to raise excise duty on diesel cars and cigarettes.
The steadily widening gap between the price of petrol and diesel has led to a spurt in demand for diesel-run vehicles, increasing the government's subsidy burden. The petroleum ministry and some sections within the finance ministry strongly support a higher excise on diesel cars.
The government earns aboutRs 8,000 crore from duty on diesel cars and Rs 10,000 crore on cigarettes each year. At present, the excise duty on cars is based on length and not fuel. An expert panel headed by former Planning Commission member Kirit Parikh last year has also recommended imposition of additional excise duty on diesel vehicles of up to Rs 80,000.
Finance minister Pranab Mukherjee had brought only 130 items under excise duty out of a list of 370 that enjoyed exemption. These include milk products, yogurt, baby foods, paper products, edible oil and equipment supplies to infrastructure projects.
Tax experts also support this pruning. "The tax base needs to be expanded... a gradual movement is a preferred approach," Pratik Jain, partner, KPMG. The ministry has kicked off a detailed analysis of the sectors in the backdrop of industrial slowdown to ensure that any change in the duty structure does not hurt growth. "Any decision on changes in the duty structure will take into account the growth scenario," the official said.
Economic growth in the current fiscal is now pegged at 7.2% as against the near 9% estimated in the budget 2011-12. The finance ministry also plans to raise its mopup from service tax, which yields just 10% of total taxes despite the sector contributing around 60% to India's GDP. It is working on a negative list approach that will not only help expand the service tax base but also clean up its administration.
The negative list concept, practiced globally, is proposed to be introduced as part of GST. Ministry officials are looking at changes that may be required for the switchover, such as credit rules, export-import norms and place-of-supply rules for services. States, too, are supporting the negative list proposal.
The indirect tax reforms are expected to withdraw some fiscal stimulus measures, raise excise on diesel cars and cigarettes and switch over to a negative service tax list. This would help the government align taxes with a unified GST, the country's most comprehensive indirect tax reform, and also raise additional revenue.
"The idea would be continue with what was initiated in the last budget... a full-fleged GST would be the culmination of the reform process, but that would take time," said afinance ministry official.
The finance ministry may opt for a gradual increase in excise rates because of the current slowdown even though policymakers say that the fiscal stimulus should be fully withdrawn. After the 2008 financial crisis, the government had cut excise duty from 14% to 8% and service tax was brought down to 10% from 12%.
"We should go back to the rates that prevailed before the crisis," C Rangrajan, chairman Prime Minister's Economic Advisory Council had told ET in an interview earlier this month. The North Block, which houses the ministry, is also studying a proposal to raise excise duty on diesel cars and cigarettes.
The steadily widening gap between the price of petrol and diesel has led to a spurt in demand for diesel-run vehicles, increasing the government's subsidy burden. The petroleum ministry and some sections within the finance ministry strongly support a higher excise on diesel cars.
The government earns aboutRs 8,000 crore from duty on diesel cars and Rs 10,000 crore on cigarettes each year. At present, the excise duty on cars is based on length and not fuel. An expert panel headed by former Planning Commission member Kirit Parikh last year has also recommended imposition of additional excise duty on diesel vehicles of up to Rs 80,000.
Finance minister Pranab Mukherjee had brought only 130 items under excise duty out of a list of 370 that enjoyed exemption. These include milk products, yogurt, baby foods, paper products, edible oil and equipment supplies to infrastructure projects.
Tax experts also support this pruning. "The tax base needs to be expanded... a gradual movement is a preferred approach," Pratik Jain, partner, KPMG. The ministry has kicked off a detailed analysis of the sectors in the backdrop of industrial slowdown to ensure that any change in the duty structure does not hurt growth. "Any decision on changes in the duty structure will take into account the growth scenario," the official said.
Economic growth in the current fiscal is now pegged at 7.2% as against the near 9% estimated in the budget 2011-12. The finance ministry also plans to raise its mopup from service tax, which yields just 10% of total taxes despite the sector contributing around 60% to India's GDP. It is working on a negative list approach that will not only help expand the service tax base but also clean up its administration.
The negative list concept, practiced globally, is proposed to be introduced as part of GST. Ministry officials are looking at changes that may be required for the switchover, such as credit rules, export-import norms and place-of-supply rules for services. States, too, are supporting the negative list proposal.
Telcos asked to ensure that towers are run on hybrid power
New Delhi: All telecom companies have been mandated to ensure that that at least 50% of all rural towers and 20% of the urban towers are powered by hybrid power by 2015. Further 75% of rural towers and 33% of urban towers are to be powered by hybrid power by 2020.
These directions have been issued after the government has accepted sector regulator Trai's recommendations on 'green telephony'.
The new rules also mandate that all telecom products, equipments and services in the telecom network should be certified "Green Passport [GP]" by the year 2015. The telecoms department's technical arm - Telecommunication Engineering Centre - will certify telecom products, equipments and services on the basis of Energy Consumption Rating ratings, the regulator said.
Besides, all service providers should declare to the regulator the carbon footprint of their network operations. This declaration should be done twice in a year.
Service providers should adopt a voluntary code of practice encompassing energy efficient network planning, infra-sharing, deployment of energy efficient technologies and adoption of renewable energy technology (RET) to reduce carbon footprints, the regulator said in a statement.
It has also asked service providers to evolve a 'Carbon Credit Policy' in line with carbon credit norms with the ultimate objective of achieving a maximum of 50% over the carbon footprint levels of the Base Year (2011) in rural areas and 66% in urban areas by the year 2020.
Operatores should aim at Carbon emission reduction targets for the mobile network at 5% by the year 2012-2013, 8% by the year 2014-2015, 12% by the year 2016-2017 and 17% by the year 2018-2019, the new norms on green telephony add.
These directions have been issued after the government has accepted sector regulator Trai's recommendations on 'green telephony'.
The new rules also mandate that all telecom products, equipments and services in the telecom network should be certified "Green Passport [GP]" by the year 2015. The telecoms department's technical arm - Telecommunication Engineering Centre - will certify telecom products, equipments and services on the basis of Energy Consumption Rating ratings, the regulator said.
Besides, all service providers should declare to the regulator the carbon footprint of their network operations. This declaration should be done twice in a year.
Service providers should adopt a voluntary code of practice encompassing energy efficient network planning, infra-sharing, deployment of energy efficient technologies and adoption of renewable energy technology (RET) to reduce carbon footprints, the regulator said in a statement.
It has also asked service providers to evolve a 'Carbon Credit Policy' in line with carbon credit norms with the ultimate objective of achieving a maximum of 50% over the carbon footprint levels of the Base Year (2011) in rural areas and 66% in urban areas by the year 2020.
Operatores should aim at Carbon emission reduction targets for the mobile network at 5% by the year 2012-2013, 8% by the year 2014-2015, 12% by the year 2016-2017 and 17% by the year 2018-2019, the new norms on green telephony add.
India key in IBM's 2015 roadmap
Mumbai: As a part of its 2015 Roadmap, India is going to be one of the crucial geographies for IBM, both as a delivery centre and as part of emerging market focus. IBM has six delivery centres in India.
It does not give a headcount, but third-party reports suggest its India unit has close to 100,000 employees and the India revenue is around $3 billion (Rs 1,509 crore).
Growth markets, Analytics, Next Generation Data Centre and Cloud & Smarter Planet are the four focus areas of its road map. A crucial aspect of this growth is how it deploys people and processes in an integrated manner to capture new opportunities.
The services unit will be key. Within the services unit, it will be the Global Business Services (GBS) unit which will be the core. For 2010-11, IBM reported revenue of $19.3 billion for its GBS unit; it was $4.9 billion for the quarter ended December 31, 2011. The GBS unit works closely with global delivery centres across the globe.
“IBMs global delivery strategy has gone through phases of growth. After the initial focus on centres in India, China and Latin America, the most recent initiative has been to create globally integrated capabilities, along with integrated industry and domain capability, with globally deployed assets and talents,” said Suhas Bhide, general manager - global delivery, India.
IBM set up its growth market units as early as 2009. “Before this, we had geography-based divisions. We realised that within these regions, there will be slices growing faster than the rest and with unique constraints. Hence, we picked certain growth markets from regions that then become part of our emerging markets focus,” he added. The markets of India, China, Latin America, West Asia and Africa represent the growth market unit.
With a prominent presence in some of these emerging market, it now intends to reap the early mover advantage in some. “We have invested so far $6 billion (Rs 30,000 crore) in India as a growth market. If you look at IBM India, it is a microcosm of IBM global, which is one-of-its kind,” said Bhide.
Some early successes in India include the IBM-Bharti Airtel deal, replicated in other emerging regions. Some entities that work with IBM include Idea and Vodafone in telecommunications; State Bank of India, Canara Bank and HDFC Bank in banking and financial services;, Amul, Tata Sky, Indian Railways and the income tax department.
“When you are working in some of the emerging market geographies like India, you realise there is no labour arbitrage. More, all these firms are competing globally and, hence, need global benchmarks in service delivery as well,” said Bhide.
For the year 2011, growth markets are 22 per cent of IBM’s revenue. The growth markets’ revenue grew 16 per cent year-on-year and the BRIC countries (Brazil, Russia, India, China) reported growth of 19 per cent.
It does not give a headcount, but third-party reports suggest its India unit has close to 100,000 employees and the India revenue is around $3 billion (Rs 1,509 crore).
Growth markets, Analytics, Next Generation Data Centre and Cloud & Smarter Planet are the four focus areas of its road map. A crucial aspect of this growth is how it deploys people and processes in an integrated manner to capture new opportunities.
The services unit will be key. Within the services unit, it will be the Global Business Services (GBS) unit which will be the core. For 2010-11, IBM reported revenue of $19.3 billion for its GBS unit; it was $4.9 billion for the quarter ended December 31, 2011. The GBS unit works closely with global delivery centres across the globe.
“IBMs global delivery strategy has gone through phases of growth. After the initial focus on centres in India, China and Latin America, the most recent initiative has been to create globally integrated capabilities, along with integrated industry and domain capability, with globally deployed assets and talents,” said Suhas Bhide, general manager - global delivery, India.
IBM set up its growth market units as early as 2009. “Before this, we had geography-based divisions. We realised that within these regions, there will be slices growing faster than the rest and with unique constraints. Hence, we picked certain growth markets from regions that then become part of our emerging markets focus,” he added. The markets of India, China, Latin America, West Asia and Africa represent the growth market unit.
With a prominent presence in some of these emerging market, it now intends to reap the early mover advantage in some. “We have invested so far $6 billion (Rs 30,000 crore) in India as a growth market. If you look at IBM India, it is a microcosm of IBM global, which is one-of-its kind,” said Bhide.
Some early successes in India include the IBM-Bharti Airtel deal, replicated in other emerging regions. Some entities that work with IBM include Idea and Vodafone in telecommunications; State Bank of India, Canara Bank and HDFC Bank in banking and financial services;, Amul, Tata Sky, Indian Railways and the income tax department.
“When you are working in some of the emerging market geographies like India, you realise there is no labour arbitrage. More, all these firms are competing globally and, hence, need global benchmarks in service delivery as well,” said Bhide.
For the year 2011, growth markets are 22 per cent of IBM’s revenue. The growth markets’ revenue grew 16 per cent year-on-year and the BRIC countries (Brazil, Russia, India, China) reported growth of 19 per cent.
Europe opening up to Indian IT services
Bangalore: The European crisis is acting as a catalyst in driving offshoring from a region that has traditionally preferred onshore IT services. The strong Europe revenue numbers and client additions of Indian IT majors in recent times indicate that clients are viewing offshoring as a cost and efficiency lever.
In calendar year 2011, top-tier IT companies grew their Europe revenues between 23% and 40%. In the just completed Oct-Dec quarter, they posted strong sequential growth in Europe, with Infosys growing at 17%, TCS at 19% and HCL at 6.3%. Europe also saw a larger share of multi-million dollar deals being signed than the US.
Infosys added 14 new clients in Europe of which two were in the $500-million bracket and these were the largest deals the company won in the quarter. TCS won 10 large deals in the quarter that included four from Europe, three from the US, and two from Asia-Pacific. HCL won 18 large deals worth $1 billion, in which Europe led the list in terms of value.
Europe accounts for about 20-30 % of Indian IT's revenues, but a large portion of this comes from the UK. In Continental Europe, led by Germany ($44 billion in IT spends) and France ($37 billion), Indian IT has just a single-digit market share of IT spends. Other large but under-penetrated markets include Spain, Italy and the Nordic regions.
There are other factors too that explain Indian IT's improved performance in Europe. Anil Chanana, CFO at HCL Technologies, said Indian IT has developed capabilities both organically and inorganically to take on large and complex projects. European IT spends are skewed towards higher-margin, project based services such as system integration.
There are also emerging opportunities in 'run the business services'. Cognizant CFO Gordon Coburn said, "One of the things we are seeing as part of the current economic cycle, even in places like France and Germany, is that clients are beginning to openly address the issue of lowering their cost by moving application management services to the global delivery model."
Indian vendors have also made huge investments in Europe in the past couple of years and have appointed country heads recruited locally. Sanjay Vishwanathan, CEO of Sonata Software, said the growing success of the global delivery model, as well as service lines like remote infrastructure and cloud, are helping the cause of offshorers. Indian IT companies also have near shore centres in Europe in countries like Hungary, Poland, Portugal and Romania.
A Deutsche Bank study with 55 major IT decision makers in Europe found that TCS and Wipro were the most favoured vendors. TCS has a greater revenue exposure to Germany and France, which gives it an advantage in this market. Wipro offers the best near shore delivery alternatives and has recently made some key strategic acquisitions.
Infosys is said to offer high-end services on par with European and American counterparts, but is not very flexible when negotiating commercial terms. HCL's acquisition of Axon and strong infrastructure management capabilities has enabled it to win key deals in Europe but is still not viewed as a tier-1 player.
However Infosys CEO S D Shibulal cautions that despite adding 120 European clients in the last nine months, he would wait for a couple of quarters more to say confidently that the European uptick is a secular trend. There is also the danger of Europe falling into a deep recession which might lead to cuts in IT spends.
In calendar year 2011, top-tier IT companies grew their Europe revenues between 23% and 40%. In the just completed Oct-Dec quarter, they posted strong sequential growth in Europe, with Infosys growing at 17%, TCS at 19% and HCL at 6.3%. Europe also saw a larger share of multi-million dollar deals being signed than the US.
Infosys added 14 new clients in Europe of which two were in the $500-million bracket and these were the largest deals the company won in the quarter. TCS won 10 large deals in the quarter that included four from Europe, three from the US, and two from Asia-Pacific. HCL won 18 large deals worth $1 billion, in which Europe led the list in terms of value.
Europe accounts for about 20-30 % of Indian IT's revenues, but a large portion of this comes from the UK. In Continental Europe, led by Germany ($44 billion in IT spends) and France ($37 billion), Indian IT has just a single-digit market share of IT spends. Other large but under-penetrated markets include Spain, Italy and the Nordic regions.
There are other factors too that explain Indian IT's improved performance in Europe. Anil Chanana, CFO at HCL Technologies, said Indian IT has developed capabilities both organically and inorganically to take on large and complex projects. European IT spends are skewed towards higher-margin, project based services such as system integration.
There are also emerging opportunities in 'run the business services'. Cognizant CFO Gordon Coburn said, "One of the things we are seeing as part of the current economic cycle, even in places like France and Germany, is that clients are beginning to openly address the issue of lowering their cost by moving application management services to the global delivery model."
Indian vendors have also made huge investments in Europe in the past couple of years and have appointed country heads recruited locally. Sanjay Vishwanathan, CEO of Sonata Software, said the growing success of the global delivery model, as well as service lines like remote infrastructure and cloud, are helping the cause of offshorers. Indian IT companies also have near shore centres in Europe in countries like Hungary, Poland, Portugal and Romania.
A Deutsche Bank study with 55 major IT decision makers in Europe found that TCS and Wipro were the most favoured vendors. TCS has a greater revenue exposure to Germany and France, which gives it an advantage in this market. Wipro offers the best near shore delivery alternatives and has recently made some key strategic acquisitions.
Infosys is said to offer high-end services on par with European and American counterparts, but is not very flexible when negotiating commercial terms. HCL's acquisition of Axon and strong infrastructure management capabilities has enabled it to win key deals in Europe but is still not viewed as a tier-1 player.
However Infosys CEO S D Shibulal cautions that despite adding 120 European clients in the last nine months, he would wait for a couple of quarters more to say confidently that the European uptick is a secular trend. There is also the danger of Europe falling into a deep recession which might lead to cuts in IT spends.
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