INFOTECH INDIA | Tech Briefs: FEBRUARY 2011
INFOSYS: IT Sector to Grow 25-26%: Narayana Murthy
TCS, Infosys Worry Euro Debt Could Mar Growth
APPLE: iPad in India; Starting Price Rs 27,990
WIPRO: West Criticized
3B in Health Projects
Cisco to Acquire
TCS: Eyeing China
Punjab Preferred
Larsen & Toubro (L&T): Center in Singapore
SATYAM: Review Sought
IBM: 5,896 U.S. Patents
IT Sector to Grow 25-26%: Narayana Murthy
 Picking up after being adversely hit by the global slowdown, India's IT sector is performing well and would experience an annual growth of 25-26 percent, Infosys Technologies founder-chairman N.R. Narayana Murthy said in Kolkata.
"Under the current circumstances, it is performing well," Narayana Murthy told reporters on the sidelines of a function here.
"Overall, things are fine. Our annualized growth will be 25-26 percent, and that is pretty good," he said. "The sector draws a revenue of $5 billion, and if we can grow at 25 percent, that's not bad," he said.
Asked for his reaction on U.S. President Barack Obama's remark "Say no to Bangalore and yes to Buffalo,” Murthy said the comments were symbolic of the foreign community's growing respect for Indian industry.
"When the U.S. president talks about Bangalore, that means there is certain respect," he said.
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TCS, Infosys Worry Euro Debt Could Mar Growth
 India's top two IT outsourcing firms Tata Consultancy Services and Infosys worry that Europe's debt crisis and rising inflation at home could slow growth.
In interviews with Reuters at the World Economic Forum in Davos, the chief executives of both companies said business remains good in 2011, but in the longer term, debt could hurt their profits.
Infosys Technologies , India's No. 2 software exporter, sees the debt crisis sweeping across Europe as its top concern. It is hurting the company's clients and could have wide-reaching impact on its growth this year.
"The top concern is Europe," chief executive Kris Gopalakrishnan told Reuters. "Although we can't do much about it, we can actually increase our footprint and get more customers."
The worries are set against a global backdrop of optimism in tech spending in 2011.
Technology executives attending the annual gathering of the world's power elite struck a confident tone owing to a big push into cloud computing, which uses Internet technology to move computers and information away from desktops and into remote data centers, and the rapid growth of mobile computing.
Still, rising commodities costs such as food prices, have pushed inflation in the region higher. Companies have worried about rising wages and production costs because of inflation. Some foreign and domestic companies have passed the costs to customers.
"Inflation is a worry," said TCS CEO N. Chandrasekaran. "If it continues to be bad, it will hurt the growth of companies (such as) retail markets, which will translate to less spending. That will come back to bite us."
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iPad in India; Starting Price Rs 27,990
 The Apple iPad is finally in India. The starting price of Rs. 27,990 will most likely make Apple aficionados rub their hands in delight. The base version of the iPad (16 GB, wi-fi only) has been selling at Rs 33,000 in the grey market and on online stores.
In less than a year of its launch, it has sold nearly 15 million units, earning close to $10 billion in revenue. The iPad launch was announced in the U.S. a year ago, though it only went on sale in April 2011. Since then, the iPad has single-handedly reinvented the tablet market.
Though not through Apple, iPad has been on sale in India since August 2010, mostly through the grey market. Several e-commerce websites also started selling the device subsequently. Analysts peg the total number of iPads in India currently at about 40,000 units. This includes sales through the grey market, online sales or those who simply purchased the device abroad.
Not only is the India launch of the iPad delayed (it was launched in Hong Kong and Singapore in July 2010) but the iPad 2, due out in a couple of months, is rumored to have dual cameras, a higher resolution “retina” display and a faster processor. Add that to the increasing competition from other tablet makers like Samsung, Motorola and BlackBerry and the choice becomes confusing.
Like elsewhere in the world, an entire ecosystem is getting created around the iPad. Accessories for Apple products are a flourishing industry and various accessories for the iPad have been available for the past few months at electronics stores and e-commerce sites.
BSNL has announced 3G plans specifically for the iPad while Airtel, Vodafone and Idea have been selling micro SIM cards (for 3G versions) for some time.
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WIPRO: West Criticized
 In harsh criticism of "restrictive" U.S. policies, Wipro chairman Azim Premji told a gathering of global CEOs in Davos, Switzerland, that the emerging economies are "more than fed up" of being lectured by the West to open their economies without any reciprocity.
"I think they (emerging economies) are fed up of being needled for opening their economies," Premji said at the annual meeting of the World Economic Forum.
He particularly expressed his disappointment with the U.S. seeking more market for its goods in the developing economies, while putting restrictions on its import of services. The liberalization of goods and services was being treated differently.
"People don't seem to equate, liberalize both products and services. If you are talking about global trade—it is products and services.
“You cannot have one standard for opening up the economy for emerging countries to products and contrary (for the others) particularly the U.S., which has put all sorts of restrictions on services. This cannot be one-way traffic," Premji said.
The Indian IT industry, which gets $50 billion of its revenue from global outsourcing, mainly from the U.S, is peeved by a string of restrictions by the American authorities for service imports.
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3B in Health Projects
Britain’s National Health Service plans to outsource back office and IT projects worth up to $3 billion. The move could help IT giants HCL and Tata Consultancy Services gain more business from the country's government departments.
Apart from offshoring projects to India-based vendors, NHS also plans to send more work to captive operations of U.K.-headquartered Steria, people familiar with the outsourcing plans of NHS said. Last year, TCS signed a $960-million contract to administer Britain's new pension scheme.
"When you compare with the U.S. government, the U.K. seems to be just the opposite. The U.K. government is seeing outsourcing as a solution and is more open to cost saving through this," Pradeep Ulhas, head of IT and ITES services at KPMG, said.
According to experts tracking the contracts, the total size of these contracts could anywhere between $1.5-3 billion. While a part of this work is likely to go to Paris-based Steria, with which NHS has a tie-up, some may also come to large Indian IT players who already work with the NHS.
"The National Health Service would be targeting savings around $450-900 million," said a U.K.-based outsourcing expert requesting not to be named.
Several U.K. government departments have already started sending IT jobs overseas in order to lower their cost of operations and cope with unavailability of skills locally. For instance, the U.K.'s tax authority, HM Revenue & Customs, is beginning an offshore an outsourcing pilot project in India with technology vendor Capgemini. The 18-24 month-long pilot, being launched with the European vendor, is part of HMRC's five-year $84-million outsourcing contract for tracking the agency's imports and exports.
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Cisco to Acquire
 Global Networking leader Cisco has announced its intent to acquire privately-held Pari Networks, provider of network configuration and change management and compliance management solutions for an undisclosed amount.
Based in Milpitas, Calif., with part of its employee base in Hyderabad, Pari Networks' technology will integrate into Cisco's smart services and help accelerate the ability of Cisco and its partners to manage the health and stability of customer networks through proactive, personalized services, Cisco said in a statement.
The acquisition is subject to various standard closing conditions and is expected to be complete in the third quarter of Cisco's fiscal year 2011.
"As business functions become more reliant on devices and applications that run over their networks, customers realize that maintaining the health and performance of the network is critical. Pari Networks will help Cisco and our partners to deliver smarter, more proactive services that help our customers to identify potential network problems before they occur and optimize the performance, management and efficiency of their networks," said Joe Pinto, senior vice president of Cisco's Technical Services.
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TCS: Eyeing China
Indian information technology companies have reportedly ramped up efforts to win the confidence of more Chinese companies in a bid to consolidate their foothold.
Tata Consultancy Services Ltd, India's largest IT services company by sales, is leading the effort to expand the presence of the Indian IT industry in China — although cracking the Chinese market may not be an easy job.
"Chinese companies are still used to the traditional global brands. They have not yet seen us. So it is also a question of brand-building for us," Girija P. Pande, head of the Asia-Pacific region of TCS, told the China Daily.
India exported $50 billion in IT services to China in 2009 and industry analysts expect the number to exceed $100 billion annually in the next five years.
In recent years, TCS has emerged as the largest Indian software business company servicing large Chinese state-run companies.
Four major Chinese banks including Bank of China and Hua Xia Bank have been clients of TCS' core banking system.
"I think we have to get more Chinese large companies to see our capability," Pande said.
TCS currently hires more than 170,000 people in 40 countries around the world, but it only has 1,200 people in China.
Pande said the company plans to increase its workforce in China to 5,000 people in the next three years.
Wipro Technologies Ltd, a leading Indian software company, is also following TCS' step in expanding into the growing markets.
"China has become our preferred delivery center for our Japanese customers. We want to build our biggest research and development center in Asia in the city of Chengdu," said Gangadharaiah C.P., vice-president and global head of Wipro Technologies' testing services.
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Punjab Preferred
Though Punjab has not been able to attract big ticket projects from IT giants like Infosys, TCS, the state has been declared as the preferred investment destination in the field of IT sector by a study.
Revealing the facts of the study, which was conducted by Punjab Infotech, state Industry and Commerce Minister Manoranjan Kalia said that seven out of every 10 organizations surveyed had expressed interest in looking at Punjab for expansion of their businesses.
Fifty existing and 150 potential investors were covered under this study.
According to the study, 71 percent of investor organizations felt that Punjab had good visibility amongst IT/ ITeS organizations because of number of similar organizations, he said.
"Another major factor contributing towards IT investment in the state is its clean labor history as a whopping 78 percent of respondents felt that positive labor history is conducive for business," he said.
With respect to infrastructure, 82 percent of organizations surveyed felt that telecom infrastructure for IT sector and other aspects such as transport infrastructure were very conducive to set up a venture, he said.
Potential investors are appreciative of a power policy that exempts IT organizations from statutory power cuts and exemption from electricity duty for five years, he said.
Despite the positive findings of the study, no big IT player like Infosys or TCS has set up shop in the state primarily because of high cost of land and non-availability of big chunk of area for IT development. The state government had been trying hard to attract investment from prominent IT players here but without much success.
"We want a big IT player like TCS, Infosys should set up a facility here which can be beneficial for the overall development of IT sector," a senior official of Punjab Infotech said.
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Larsen & Toubro (L&T): Center in Singapore
 Mumbai-based L&T Infotech Ltd Jan. 18 opened a new center in Singapore, intensifying focus on wealth management technology for its clients, mostly in the banking and finance sector.
"The decision to start our operations in this strategic business hub (of Singapore) is a part of our global strategy to strengthen and accelerate our Asia Pacific focus," said L&T Infotech chief executive officer Sudip Banerjee.
The Center for Excellence for Wealth Management and Technology would be serving international clients operating out of Singapore, including CitiCorp, Barclays and Credit Suisse.
The company was earlier operating in Singapore through a branch office which was opened in 2002.
Addressing reporters at the inauguration of the center, Banerjee said the Singapore center would eventually be a hub for the Asia Pacific region, supplementing L&T Infotech operations in Melbourne, Pusan and Tokyo.
He projected 30 percent year-on-year growth for L&T Infotech, adding that the company would expand operations through organic growth as well as seek out new acquisition opportunities.
At present, 65 percent of L&T Infotech earnings come from the United States market, where it has two major centers, 20 percent from Europe through its three offices and six percent from Japan and South Korea . Rest of the earnings come from South Africa , the Middle East and Singapore.
Banerjee said L&T Infotech is increasing its business in India , especially by securing contracts with the Railways and Education Ministry.
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SATYAM: Review Sought
 Scam-tainted Satyam Computer founder B. Ramalinga Raju has approached the Supreme Court seeking a review of its order cancelling the bail granted to him by the Andhra Pradesh High Court in the multi-crore rupee accounting fraud.
The petition was filed against the Oct. 26, 2010 order by which a bench of Justices Dalveer Bhandari and Deepak Verma had set aside the order of the high court granting bail to Raju along with his brother Rama Raju and four others.
The apex court had allowed the appeal of CBI and cancelled the bail granted to B. Ramalinga Raju and five others and had asked them to surrender by Nov. 10.
The Supreme Court had observed that the fraud eroded "corporate credibility of the nation."
"Ordinarily this Court would be slow in cancelling the bail already granted by the High Court, but in extraordinary facts and circumstances of these cases, we are of the considered view that the impugned orders passed by the High Court granting bail to the respondents, cannot be sustained in law and the same are accordingly set aside," the bench had said.
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IBM: 5,896 U.S. Patents
 Global IT giant IBM has said it received 5,896 patents in the U.S. in 2010, topping the list of world's most inventive companies for the 18th consecutive year.
According to IFI Patent Intelligence, which maintains U.S. patent databases, IBM received a record 5,896 U.S. patents in 2010.
Samsung with 4,551 patents took the second position, followed by Microsoft which had 3,094 patents last year.
"Patent leadership is an important element of our high-value business strategy, which is focused on enabling instrumented, interconnected and intelligent infrastructures that can change how systems of all kinds work to support a smarter planet," IBM general manager and vice president Kevin Reardon said.
IBM received 1,087 patents in 1993, which has steadily grown to 2,658 patents in 1998, 3,411 in 2001 and 4,914 in 2009.
The list of top ten patent recipients from the U.S. Patent and Trademark Office includes Canon (2,552), Panasonic (2,482), Toshiba (2,246), Sony (2,150), Intel (1,653), LG Electronics (1,490) and HP (1,480).
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