Archive for July, 2009

IT Company Metrics

July 26, 2009

July 26, 2009, Business Line

Wipro sees an increase in demand for shared services for software application management from its package implementation clients (13.4% of Wipro’s revenue is from Package imp) – such projects reduce cost of application management by 20-25%. Wipro currently has a 300-people team for this business, known as FlexDelivery. Strong demand from Manufacturing, Retail and High-tech customers. This model is available for one package currently and is part of Wipro’s non-linear strategy.

July 19, 2009, Businees Line

TCS results…quarter ending June 2009

  • Offshore revenue: 50.4%
  • Utilization 71.3%
  • employees: 1,41,642; Attrition level: 11.5%
  • SGA 21% (as of Mar 30, 2009 quarter)

July 14, 2009, Business Line

Wipro has launched 5 new service lines aimed at helping customers in overcoming business challenges and achieve cost savings:

  1. WipMap to address issues such as IT transformation
  2. WipMigrate to help customers and vendor migration
  3. WipSave helps them reduce IT costs
  4. WipMerge helps customers address IT integration issues post M&A and
  5. WipOptima helps them rationalise IT assets.

Through these new service lines, Wipro is assuring its customers an upfront cost savings of some 25 per cent over the current costs.

Feb 8, 2009, Business Line
BL reports the revenue contribution of top 5 and top 10 accounts of some IT companies.
Top accounts Contribution (BL Feb 8, 2009)

Nov 13, 2008 Economic Times
New clients and SGA expenses acquired by top IT services in the first 3 quarters (Jan – Sep) of 2008.
• TCS – 138; 19-20% of revenues
• Infy – 129; 12-13%
• Wipro – 107, 10-12%
• CTS – 182, 23-24%
• Satyam – 99, 18-19%
Oct 29, 2008 Business Line
Debtor Days / time it takes to collect payments from their clients, @ Q2 2008.
• TCS – 90 days (Q1 2008 92 days)
• Infy – 60 days (69; Q3 2007 – 61)
• Wipro – 67 days (67, 70)
• Satyam – 88 days (93, 92)
• HCL Tech – 80 days (79, 77)

Gartner 2007
SWITCH share of global IT services… It was 1.9% in 2006, which increased to 2.4% in 2007.
• Rank 28, TCS, 0.6% (2006), 07.% (2007)
• 37, Infy, 0.4, 0.5%
• 40, Wipro, 0.3%, 0.5%
• 63, CTS, 0.2%, 0.3%
• 69, Satyam, 0.2%, 0.3%
• 76, HCL, 0.2%, 0.2%

iPhones in India

July 26, 2009

October 23, 2008

iPhone facts in India… – Service Provider View

Unlike US and many other places, Apple has launched iPhone with 2 SPs viz. Airtel and Vodaphone on Aug 21, 2008. In the US, acitivation of the device occurs wither at the retail outlet or through downloading of iTunes whereas in India, iPhone is launched w/o iTunes. iPhone is highly priced in India at 31K for 8GB ver and 36K for 16GB ver(approx. 18K i.e $450 when it launched in the US).

Last year in the US, Apple and AT&T entered into an exclusive, landmark deal to share revenues every month. Though the details were not published, it was estimated that apple would get about 11$ every month from AT&T for 2 years – committed time an user would be with AT&T. This gave 700+$ to Apple on every iPhone. In another estimate, iSuppli mentioed of 500+$ profit from each phone..

Similarly, in the Europe, it is estimated that Apple wanted 40% of monthly charges. iPhone seems to be smash hit – yesterday Apple released its Q4 results for 2008 JAS Qtr having shipped 6.9M iPhones! iPhone uses ARM chips internally.

India – Multiple Sources

July 26, 2009
November 22, 2008
CIA has released a new report just about when Obama is set to become the 44th president of USA titled “Global Trends 2025 – A Transformed World”. For those who are following the rise of China and India after the “BRICs and beyond” in Nov 2007 from Goldman Sachs – this report includes the Next 11 as well, the CIA report offers more interesting insights.

Key messages from the report are:

  • Global multipolar system is emerging with the rise of China, India etc. However, US will be the single most powerful country but less dominant.
  • Transfer of global wealth and economic power from West to East due to rising oil and commodity prices; shifting of locus of manufacturing and services industries to Asia.
  • Demand for food will rise by 50% by 2030 due to rising popultion; middle class; affluence etc.
  • Terrorism is unlikely to disappear, but its appeal will diminish.
  • Climatic changes and their impact – when rather than if; resource issues will gain prominance – food; oil etc. New technologies could provide a solution.1

     

     

     

     

     

Since, the last report was published by CIA “Mapping the Global Future – 2020” in 2004, China and India have grown from strength to strength. In that report, there was a fictional letter of WEF happening in China instead of Davos – In September 2008, China gave a glimpse by hosting the “Annual meeting of New Champions”.

India Business Year book, 2008
India, a country of 28 states and 7 union territories – Life expectany is 68.59 yrs
Age structure of 1.03B people, of which UP accounts for 166.2M

  • 0 – 14 yrs: 31.8%
  • 15 – 64: 63.1%
  • 65+ – 5.1%

Literacy Rate: 64.84%
India’s GDP accounts for 6% of world’s GDP – it is pojected to grow to 11% by 2025. The GDP in 2006 was 906.3B, growing at 9.2%. Avg. income is Rs.2500 / month; inflation was 5.3%.Time required to start a business in India is 35 days.

India Economist

Fortune 2008BW Infotech 2008

BCG 2008 New Global Challengers

The Next Urban Frontier – 20 Indian cities to Watch

NCAER has published a recent report (mid 2008) on 20 Indian cities to watch. Grouping them into 3 categories are:

Megactities (8) (10% of population and 30% of income)
• Mumbai
• Delhi
• Kolkatta
• Chennai
• Bangalore
• Hyderabad
• Ahmedabad
• Pune

Boomtowns (7)
• Surat
• Kanpur
• Jaipur
• Lucknow
• Nagpur
• Bhopal
• Coimbatore

Niche Cities (5)
• Faridabad
• Amristar
• Ludhiana
• Chandigarh
• Jalandhar

The cities at 1st glance are concentrated in the Northern India, West, South and just 1 Kolkatta in the East. (Just this morning, newspapers blared that Tatas have pulled the Nano project out of Singur. Tatas were investing Rs. 1500 crore and the dupute was over the 1000 acre land given to them at subsidized rates from farmers. At the time of this writing Tatas and its vendors had made significant investment inside the area; trained people etc. etc.)

Under this study, 30% of Indian population lives in Urban areas and contributes to 44% of India’s income. The average household income is the highest in Surat at Rs. 4.5L; Chandigarh at Rs. 4.2L and Mumbai at Rs. 4.0L. More than 50% of India’s population will be middleclass by 2016 and this mean that 300+Mn population will move towards the cities and towns.

In the megacities, 57% of middleclass people own cars; 47% motor cycles; 73% mobiles; 91% TVs; 63% DVDs; 17% Computers; 90% Refrigerators; 66% washing machines; 14% microwave ovens and 10% A/Cs. Even in the Boomtowns and Niche cities, over 43% middle class owns a car; 89%+ refrigerators; and 55%+ washing machines.
• Credit Card penetration inthe 20 cities is about 8%
• The surplus income in the megacities is about 47% or so while the national surplus income is about 25%. For the cities, 60% of the people keep the surplus in banks.
• The % of spend on household expenditure is interesting (mega cities)
• Food, Beverages & Tobocco – 35%; Transporation – 20%; Housing & Utilities – 10%; Healthcare – 7%; Apparel – 6%; Eduction & Recreation – 5%; Household & Personal Products – 14%; Communication – 3%.

2007 – 2008 estimates put Mumbai at 20+M population, Delhi 15.5M; Kolkatta 13.8 Mn; Chennai 6.9 Mn and Bangalore 6.3Mn.

India's Share of Wallet of Basic & Discretionary items

Composition of Household Exp. (NCAER, 2008)

Oct 2008

Forbes has identified the following Indian companies in its “Fab 50”.

  • Bharti Airtel
  • BHEL
  • HDFC Bank
  • Infosys
  • ITC
  • L&T
  • Mahindra & Mahindra
  • Reliance Ind
  • Tata Steel
  • Wipro

Influential People – Survey Data

July 26, 2009

BW 25 influential people on the Web – 2008

BW, as usual has come out yet another of its famous lists – the BW 25 influential people on the Web. It includes the following people…

  • The Marshall: Mitchell Baker – mozilla.org
  • The Innovator: Jeff Bezos – amazon.com
  • The Searchers: Sergey Brin, Larry Page, and Eric Schmidt – google.com
  • The Investor: Jeff Clavier – softtechvc.com
  • The Papa Bear: Paul Graham – ycombinator.com
  • The Muckracker: Arianna Huffington – huffingtonpost.com
  • The Adviser: Joi Ito – joi.ito.com
  • The Mastermind: Steve Jobs – apple.com
  • The Filmer: Jonathan Kaplan – theflip.com
  • The Communicator: Loic Le Meur – Leweb3.com, seesmic.com
  • The Trader: Jack Ma – alibaba.com
  • The Publisher: Matt Mullenweg – WordPress.org
  • The Mogul: Rupert Murdoch – myspace.com
  • The Community Organizer: Craig Newmark, craigslist.com
  • The Traffic Driver: Gabe Rivera – techmeme.com
  • The Poster Boy: Kevin Rose – digg.com
  • The Adult: Sheryl Sandberg – facebook.com
  • The Edutainer: Jon Stewart – thedailyshow.com
  • The Money Man: Peter Thiel – clariumcapital.com, thefoundersfund.com
  • The Crafter: Maria Thomas – etsy.com
  • The Advocate: Anssi Vanjoki – nokia.com
  • The Crowd Sourcer: Jimmy Wales – wikia-inc.com/wiki/wikia
  • The Blogger: Evan Williams – twitter.com
  • The Fighter: Jerry Yang – yahoo.com

100 Most Influential People in IT (eWeek) – 2008

eWeek has released the list of 100 most influential people in IT – The editors should have spent a lot of time on this… Really, the who’s who of IT / people shaping the IT industry. Microsoft has a 8 people in the top 50!, showing their influence.

  1. Larry Ellison, CEO, Oracle
  2. Steve Jobs, CEO, Apple
  3. Steve Ballmer, CEO, Microsoft
  4. Sam Palmisano, Chairman and CEO, IBM
  5. Marissa Mayer, Vice president, search products and user experience, Google
  6. Jean-Philippe Courtois, President, Microsoft International, Microsoft
  7. Joe Tucci, Chairman, president and CEO, EMC
  8. Mark Hurd, Chairman, president and CEO, Hewlett-Packard
  9. John Chambers, Chairman and CEO, Cisco Systems
  10. Larry Page & Sergey Brin, President of products and president of technology, respectively, Google

LinkedIn Network… Indians and Chinese returning home?

July 26, 2009

9 Jan 2010

Recd. a group email today from LinkedIn country manager that the network has 4M members in India (5M – Mar 2010) and 55M (60M+ – Mar 2010) across the world! Great going!!

7 March, 2009
Vivek Wadhwa of the Harvard Law school and his collaborators have published their findings recently on Immigration workers in the US. http://www.globalizationresearch.com/

  • 1 out of 4 engineering and Technology companies founded between 1995 and 2005, had an immigrant founder. They employed .45M people and generated $52B revenues in 2006.
  • Indian immigrants founded more companies than the next 4 groups combined – UK, China, Taiwan and Japan. 80% of the immigrant found companies were in the field of Software or Innovation / Manufacturing.
  • Foreign nationals residing in the US were inventors / co-inventors for 25.4% of the patents filed in the US in 2006. 16.8% of overall patents had a Chinese name and 13.7% had an Indian name in 2006. Chinese inventors tended to live in Californai, New Jersey and New York while a large number of Indian inventors were in California, New Jersey and Texas.
  • US issues 65,000 H1B visas every year and an additional 20,000 visas for individuals who had an advanced degree in the US. While a number of well known individuals in the industry including Reid Hoffman of LinkedIn have called for increase or reviewing the immigration laws –
  • The authors tracked down 1,023 Indians and Chinese through the LinkedIn network who had worked or received advanced degrees from the US for the study. 51% of Chinese had Masters and 41% had Ph.D’s. 66% of Indians had Masters and 12.1% had Ph.D’s. (Chinese were receiving lot more Ph.D’s!)
  • A strong factor in returning home for 79% was there was a growing demand for their skills in their countries. They also said that they enjoyed a better quality of life, though they were making less money.
  • Indians who returned complained of Traffic and congestion; lack of infrastructure; excessive bureaucracy and Pollution. Chinese complained of Pollution; reverse culture shock; inferior education for children; frustration with government bureaucracy and quality of healthcare. China clearly has more fundamental issues to tackle.
  • In 2006, there was a backlog of over a million applications for permanent resident visas against an yearly grant of 120,000 – 10 times over.

4 February, 2009
I have been using LinkedIn for over 8 months now and watched my connections grow to about 130+. I have connected to some very old friends and recommended it to others. Founded by Reid Hoffman, LinkedIn has 35M members, compared to 120M+ in Facebook and Myspace.com. According to Hoffman, a typical 30-year old should have 50 – 100 contacts. LinkedIn, incredibly was profitable in 2007 and 2008. It was valued at $1B+ in June 2008 (in contrast Microsoft valued Facebook at $15B and invested $240M in it, a while ago). It expects to get about 30% from ad revenues ($75Mn+); another 30% from recruiting and rest from sales of premium subscriptions. BusinessWeek mentions that the average age of a LinkedIn member is 41 with a median salary of $109K.

Nasscom Strategic Review

July 26, 2009

Indian IT Industry FY2009E

March 7, 2009

Nasscom has recently released its Strategic Review for FY 2009. Some key mesages from the report…

• Worldwide IT spending in 2008 was $1.6T: SW and Services = $967B; HW = $594B; (FY 2012E: SW and Services = $1.2T; BPO = $181B; IT Operations = $275B)

• Indian IT will be a $71.7B industry in FY 2009E; of which SW and Services (inc. BPO and Products) are $59.6B; while HW will be $12.1B.

• US accounts for 60% of the exports and UK 19%.

• On the vertical side, BFSI accounted for 41% of the revenues;Hitech / Telecom 20%. Manufacturing 17%; Retail 8%

• Direct employement in the IT-BPO sector was 2.2M. (IT Services = 947K; BPO = 790K; Domestic IT industry = 500K). HW employement not available.

• IT-BPO sector will contribute 5.8% to India’s GDP.

Economic Downturn

July 26, 2009

McK Economic Survey (Mar 2009) - Primary reasons for the CrisisMcK Economic Survey (Mar 2009) - Steps by CompaniesMarch 25, 2009

Based on a survey in March 2009, McKinsey has reported that well managed companies are looking at:

  1. Reducing Operating Costs
  2. Improve Productivity and
  3. Introducing new products to gain market share

Most of the respondents felt Financial firms misunderstanding of the risk was a key reason for the economic decline.

Leading Geeks

July 26, 2009

Paul Glen, C2 Consulting has written an insightful book on “Leading Geeks”. He covers three areas: 

  • Geeks themselves, their motivation etc. 
  • Geek Work ie., the nature of their work 
  • Leaders, how do leaders manage them.

 A fast read and great book.Geeks

Managing the Professional Services Firm by David Maister

July 26, 2009

Maister says, “Principles (or values) are the most effective management tools” for PS firms. He calls on the PS firms to align their actions based on their espoused values.

He advocates…
– Close, trusting relationships with clients
– negotiating clear goals
– having good client communications
– managing the project team effectively…

Gerald Weinberg, says the consultant should be prepared to return his fees if the client did not get value from the advice!

Thoughtful Quotes

July 26, 2009

Three core beliefs expounded in “A business and is beliefs” by Thomas J. Watson Jr., IBM:

  1. Have respect for the individual
  2. Give the best company service of any company in the world
  3. Pursue all tasks with the idea that they can be accomplished in a superior fashion

Steve Ballmer on Microsoft’s focus in these trying times (Gartner ITxpo 2008 – Oct 2008)

  1. Help Customers to make information available to employees, partners and customers.
  2. Agility in business and
  3. Cost.

“For IT specialists, Expertise alone does not inspire trust and credibility. Successful IT specialists work on their trustworthiness and build good relationships with clients at the same time…” Barbara Beshein, et al SMR Summer 1997.

“Not all problems have a technological answer, but when they do, that is the more lasting solution.”
– Andy Grove, Founder of Intel Corporation
“How you handle your own time, is in my view, the single most important aspect of being a role model and leader”, Andy Grove in High Output Management