Panasonic outsources email to IBM
February 2, 2010
Source:  ET Bureau

BANGALORE/NEW DELHI: India’s third-biggest software exporter Wipro has been empanelled by General Electric as one of the outsourcing vendors as More Infotech Stories part of a master services agreement (MSA) signed between the companies recently, at least three persons familiar with the transaction told ET last week. 

The agreement with GE will allow Wipro to bid for nearly $1 billion worth of outsourcing projects fleshed out by different business units of GE every year, against rivals Tata Consultancy Services (TCS) and Genpact. 

“While it does not in any way guarantee assured contracts, GE is a good account to have for long-term, annuity-based revenues because even if the micro environment is bad, one of the GE units would have something to outsource, offshore,” said a senior executive at one of the tech firms currently serving GE. He requested anonymity because he is not authorised to comment about his company’s customers. 

Outsourcing experts and officials familiar with GE’s offshoring to Indian vendors said while TCS does nearly $150-200 million worth of projects for GE annually, Genpact and others could together account for over $700 million offshoring. When contacted by ET, a Wipro spokeswoman declined to offer any comments. A GE spokeswoman, too, did not respond to an ET query sent last week. 

For Wipro, GE is not entirely a new customer. In fact, when Jack Welch visited India around two decades ago scouting for partners to sell his company’s healthcare products, Wipro’s Azim Premji was one of the first partners for Mr Welch. “They did start healthcare business and an outsourcing alliance later, however, since 2000 Wipro has not been doing any significant outsourcing work for GE - in many ways, this is a great comeback,” said another person familiar with the agreement. 

Meanwhile, outsourcing experts such as Siddharth Pai, managing director of TPI’s India office say as customers such as GE come out of recession there would be more Indian tech firms empanelled as a tier one vendor. “If a company is empanelled as a vendor, it has fairly good visibility on the various projects and revenues that may come in. It’s not a commitment for business, but certainly strengthens relationships,” Mr Pai said. 

“Of late, Indian companies have realised that they don’t have many annuity-based contracts in their kitty and have to constantly fight for revenues on an ongoing basis whether empanelled or not,” he added. 

Gaurav Gupta, principal and country head-India at outsourcing advisory firm Everest Group said Wipro already has the healthcare alliance with GE, which helped. “However, GE is a demanding customer and several tier-1 companies in the past have shied away from doing business with GE as either the terms are perceived to be unfavourable, or GE can become too large a portion of their revenues and therefore create a customer concentration risk,” Mr Gupta said. 

Some experts however, do not expect GE to become a large account for Wipro anytime soon. “They could start at around $10-20 million annually, but with so much of competition for the GE business, I am not sure if Wipro would also like it to become big,” a senior executive at one of the rival firms told ET on conditions of anonymity. 

“Going by emerging IT industry trends, it’s likely that the company (GE) has reviewed its supplier portfolio and found that there is supplier fragmentation with multiple suppliers across business units and functions and trying to consolidate to a more manageable number,” said Gupta of Everest. 

“And given that large customers are in general consolidating their supplier base to drive more value and reduce the risk of fragmentation, Wipro could see more opportunities open up in GE,” he added. 

India needs a separate cyber police force: Moily
February 2, 2010
SOURCE : TNN

NEW DELHI: India urgently needs a well-trained special police force to deal with cyber crimes and it must be equipped and trained to deal with all kinds of internet bugs, Law Minister Veerappa Moily said on Sunday. 

"India does not have a specific police force to deal with cyber crimes and implementation of laws against crimes in the virtual world. India needs it urgently following the footsteps of US and South Korea," Moily said at an interactive seminar for judges, heads of police forces and prosecution of states here. 

He said there were many impediments that needed to be overcome soon. While a vast majority of the police force or prosecutors in the country had no experience of tackling cyber crime, judges too lacked experience in appreciating evidence in such cases. As cyber crime knows no geographical boundary, the absence of international cooperation between police forces adds to the woes of victims and lets the culprit go scot free, he said. 

It was attorney general G E Vahanvati who pointed out the danger potential of cyber crime as was shown by `Trojan horse' and `I love you' bug and said cyber crime was not limited to the web world but had been extended to mobile phones, which could be used to bombard a victim with messages and send illicit MMSes. 

Chief Justice of India K G Balakrishnan said cyber crimes caused irreparable damage to the victims though it may not involve inflicting of physical pain. "Someone's bank account can be wiped off depriving him of life-long savings and others can face huge loss of reputation when his face is morphed and put in an obscene video on the net," he said while emphasising on sensitisation of the police, prosecutors and judiciary about the consequences of the crime. 

Supreme Court judge and Cyber Law Enforcement Committee chairman, Justice Altamas Kabir, said the attending DGPs and judges should make efforts to understand the nitty-gritty of the anti-cyber crime law enacted by the country in the shape of IT Act, 2000. However, he said going by the growing ingenuity of cyber criminals, there was a need for expanding the definitions of various crimes listed in the law. 

IT service exports to grow 15% in FY11
February 2, 2010
SOURCE: ET Bureau

NEW DELHI: US President Barack Obama might have set the cat among the outsourcing pigeons once again with his State-of-the-Union address last week, but Nasscom believes the country’s IT services exports will grow at 13-15 % in 2010-11 , slower than the boom years, but almost double the rates the industry had to endure last year on account of the financial meltdown. 

The industry body refused to confirm the latest estimates — the third time it’s revising its figures in the last 12 months — as an official announcement is due later this week. However, for the current fiscal, it continues to maintain the low 4-7 % growth for the sector, despite betterthan-expected quarterly results and an improved market outlook. Technology majors TCS and Infosys had reported increase in dollar revenues of 6.6% and 6.8% respectively for the third quarter, beating market expectations . 

“Growth for next fiscal is unlikely to be at 2008 levels (around 22% a year), although it will be better than the current fiscal,” Nasscom vicepresident Ameet Nivsarkar said. 

Nasscom believes demand for services is picking up and uncertainty has reduced in core sectors like banking and telecom and in core markets like the US, which account for 60% of the business. 

In a recent interaction with ET, Nasscom president Som Mittal had said for the current fiscal, there won’t be any change in our growth estimates . “The first two quarters were bad, seeing almost flat growth. But overall outlook looks more promising ,” he had said. 

The positive outlook is corroborated by Technology Partners International (TPI), a global sourcing advisory firm. In its quarterly index, TPI noted that globally, almost $25 billion worth of contracts were awarded in the last quarter (October, November, December), up 47% on a quarterly basis and 8% on a yearly basis. 

“The market bottomed out in the first half of 2009 and turned around in the second half. There’s plenty of pent-up demand that sets a positive trend for 2010, though it could be lower than the 2008 levels,” said Sid Pai, partner and managing director, TPI India. TPI tracks outsourcing contracts valued $25 million or more. 

Driving the turnaround are sectors like financial services, manufacturing, telecom and media, where global majors offshored services to cut costs. Even industry players-big and smallreckon a better outlook for the sector. For instance, Ananda Mukerji, MD & CEO, Firstsource Solutions notes there’s strong momentum in sectors like telecom where global services providers are entering into new areas like broadband wireless and DTH and are seeking services from technology support to Web-chat .