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The issue of information technology usage and empowering of Small and Medium Enterprises (SMEs) in India got another push in the recently held ‘Envisioning the Wired SME conference’, organized by The Indus Entrepreneurs (TiE) and IndiaMART.com, at the Sheraton, Sak “Despite having a contributive share of 40 per cent in total industrial output, the SME sector has been lagging behind in the technology front,” said Mr. Mritunjay Kapur, Managing Director, Protiviti. “Unorganized transactions are what need to be controlled, if the SMEs are to make themselves more investor-friendly”, he added. The need of the hour is in making businesses transparent and risk-free to achieve sustainability, he said. Citing affordability as the major concern for the SME sector not embracing I-T in a big way, Ms. Neha Lobo, Marketing Manager, IBM Software Group, advocated scalable and flexible IT solutions for SMEs. Businesses today need to develop vision to reach out globally. And technology is the bridge that can make domestic markets and global investors come on a common platform. By bringing SME-friendly software such as Lotus and packaging IT solutions into small affordable units, IBM is constantly working in making this a reality. This would cut down depreciation, she said on the issue of Leveraging technology and innovation to achieve scale. Elaborating on pocket-friendly IT solutions for SMEs, Mr. Rajiv Sodhi, Director, Online Business, Microsoft India, advocated entrepreneurs to consider pay-as-you-go-up and try-before-you-buy approaches when buying software. Considering the high-price issue involved in the implementation of software, cloud computing and renting of software through service providers and vendors are two cheap options for small businesses, he advised while discussing Microsoft’s $2 per month low-cost solution for SMEs. Also present at the occasion, Mr. Vipan Sawhney, Head Internet Data Centre Services, Progression Infonet, highlighted the need of turning IT into a business solution instead of a technology solution for SMEs. Renting IT services through vendors is a great option as it cuts down the maintenance costs, which is a big relief for SMEs. However, proper attention should be paid in differentiating ‘what is available’ from ‘what is needed’ and in finalizing user training plans to prevent post-deployment software problems, he added. The issue of wiring SMEs with the help of IT needs more than software. Developing SME-focused software is not enough. Proper IT training is required to enable entrepreneurs to leverage the technology for business growth, stated Dr. Anil Wali, MD, Foundation for Innovation and Technology Transfer, IIT-Delhi. Bringing to focus the need of setting up IT institutes to encourage young entrepreneurs to come up with viable technology-driven business ideas, Mr. Wali urged the government to establish more business incubation centers across the country. The journey from wireless to wired is an uphill task for SMEs. With technology changing every day, smart planning can go a long way in cutting down on unnecessary expenditure on soon-to-expire software,opined Dr. Mahesh Taneja, General Manager Finance and IT, Munjal Showa Ltd. The session on empowering the SME was chaired by Mr. Prasanto K. Roy, President and Chief Editor, ICT Publications, CyberMedia, while the next session on information technology was chaired by Mr. Rajeev Karwal, Founder Director, Milagrow Business & Knowledge Solutions. Courtesy Bignews |
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IT Services will now be ‘on-demand’
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A long and fierce storm tends to change the landscape forever. Likewise, an economic crisis brings about some permanent changes in the business landscape. While some behemoths collapse, some emerge stronger. And most importantly, it changes the rules of the game. It changes the way business is done. Something similar is evolving in the Indian IT space.
The most important of these metamorphosis, is the trend for on-demand services. As the recovery is starting to take shape, customers have started to loosen the strings of their wallets. This is evident from the number of deals that are coming on table these days for the Indian IT majors. However, the customers are still shunning away from big capital expenditure for IT. They are asking for on-demand delivery of IT-services. In technical terms, Software-as-a-Service (SaaS) is what most clients demand. Instead of buying an entire software application for themselves, clients want the IT vendors to manage, host and deliver the software application as an on-demand service. The customer can log-in, use the software and pay only for that transaction. In layman’s terms, it is like going to a restaurant. One does not need to own a one. Instead one can go there, order one’s favorite dinner and pay for just that. And also one can go to the same restaurant as many times as one wants. In the changed business environment, the existing way of selling IT services would not work. As per traditional method customers were charged for the time and resources used to build their customized software. These software applications were then deployed on client’s machines and needed constant maintenance and enhancements. But now rules have changed. Clients no longer want to own the software. Why? Because, this on-demand service model brings the total cost of service for the clients down by as much as 40% in some cases. They can also avoid large, complex outsourcing contracts and instead pay-as-they-use. According to recent news, top customers like Nokia, Siemens, Royal Philips Electronics etc. are demanding such services from Indian IT vendors like TCs, Infosys and Wipro. Many business applications like customer relationship management (CRM) and enterprise resource planning (ERP) are being delivered on the SAAS model. According to Gartner, market for SaaS-based CRM was worth US $ 1.8 bn (about 18% of the total CRM software market) in 2008-09. But the question one might ask is that, is this equally beneficial for the software vendors? The answer is yes. This brings a sea of opportunity for the Indian IT vendors. The new business model ensures more proximity with the customers, aiding better understanding of their day to day requirements. This can help them mine more business from existing customers. Further, Indian IT vendors have dedicated offshore development centers for each of their marquee clients. This type of delivery mechanism allows them to do away with these client-specific centers of excellence (COE). It brings their cost of development down by as much as 30%. Most importantly, it allows them to reuse their software applications in serving different clients. As same software can be tweaked a little to cater to different clients. Or at least some basic logic can be reused and there is no need to start from scratch for every new client. So this method is quick and saves cost. Indian IT is gearing up with solutions based on the new model. Wipro is using its ‘FlexDelivery’ model to offer on-demand ERP software solutions to its customers. It generates nearly 15% of its ERP revenues from this and aims to take it to 50% of total ERP revenues. Infosys offers Oracle’s PeopleSoft HR management software on same lines. TCS is also catering to a plethora of small and medium businesses particularly in India on its IT-as-a-service platform. A number of deals on flexible on-demand model are being discussed. The sooner our home-grown mega-vendors master this art the better! Courtesy Equitymaster |
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33% Indians confident of Shopping Online
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The VISA e-Commerce Consumer Monitor conducted from April to June 2009 found that 33% of Indians are confident about using online modes of payment. This is higher than the average for Asia-Pacific countries, which stood at 29%. However, 30% of the sample size who were not exposed to this mode showed greater concern about the usage as compared to 16% of the sample size in the Asia-Pacific.
The study highlights that 72% of Indians look for security in online shopping; especially bank guarantee in transactions. Since the mandate passed by the RBI on August 2009 for VISA verification of all online transactions, this mode of payment has increased in popularity, VISA country manager Uttam Nayak said. VISA plans to tie up with 40 Indian banks to facilitate this process. Courtesy “Times of India” |
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The enterprise software market in India is expected to grow by a sharp 10.1% this calendar, which will improve further to 11.8% in 2010, a recent report by technology research firm Gartner says.  www.ipott.com Revenues for India’s business software market — the fourth in the region — are being driven by a large local customer base and government stimulus packages, not to mention relatively low penetration. Another report by consultancy Sprinboard Research predicts that India will leapfrog South Korea to be the third-largest business software market by 2011, garnering a 15.6% share in the region. According to Gartner‘s study, India’s compounded annual growth rate for the 2008-13 works out to 12.4%, second only to China’s at 14.6% and faster than that of Vietnam at roughly 10%. The Apac growth rate for the same period is a CAGR of 10.8%, the highest worldwide. The $20-billion Asia-Pacific market, with an anticipated growth of 10.2% in 2009, is giving a leg-up to slowdown-hit global enterprise software revenues, which may see flat year-on-year growth of 0.3%. Balaji Srinivasan, CEO of Delaware-based Aurigo Software, makers of ERP solutions for realty and construction, sees definite demand from private contractors in housing and commercial realty besides heavy engineering firms bidding for government tenders for infrastructure projects — a direct corollary of Centre’s liquidity-easing moves. “We have seen sharp growth since 2008 when we came in and are predicting a 100% year-on-year growth for the next three years from our India business. We have cobbled up 12 new clients over the last 16 months and see India contributing 45% of our revenues by 2010,” he adds. A tech sector tracker says while India has the same compliance norms as other western geographies, especially in financial services, it is still an emerging market in technology adoption. IDC expects the domestic IT market reaching $45 billion by 2013, a growth of 15.8%. The key to local growth is also lesser dependence on exports and a large number of SMBs and entrepreneurial firms which are realising the benefits of technology in a competitive market. “India holds great promise as a domestic market for Fiorano. We expect many Indian companies to drive the future growth of our business,” says Atul Saini, CEO of Silicon Valley-based Fiorano Software, a pioneer in virtualising distributed services. Fiorano, which already has Vijay Mallya’s UB as its main Indian client, hopes to add 30 new clients over the next couple of years. Spurred by the potential, billion-dollar enterprise software firm Compuware has recently appointed an India sales head while Australia’s Mastersoft Research — which creates data quality solutions — has started hawking its products here. Susan Hyland, CEO, Mastersoft Research said: “We are targeting verticals like telecom, banking, financials and insurance.” Courtesy “The Economic Times” |
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Major Indian IT firms doing good
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The appreciating Indian rupee against the US dollar which was creating havoc in the IT industry could eat into the operating (Ebitda) margins of the major Indian IT services providers. Tata Consultancy Services (TCS), Infosys Technologies and Wipro, the top three major Indian IT firms either met or beat market and analyst expectations in the quarter ended September 30, 2009, registering their best performance in six quarters. The analysts say the growth is in volumes which imply that business is picking up. TCS registered a 5 per cent growth in volumes while Infosys posted a 2.3 per cent growth. Wipro was the only company to show a dip in volume growth. But Edelweiss analysts opine that, since Wipro has not committed offers to the campus (unlike TCS and Infosys), it can absorb these volume declines without impacting margins in the coming quarters. The company has registered a margin improvement in IT services of over 140 basis points (bps) sequentially to touch 23.8 per cent and providing a healthy guidance for IT-services revenues for Q3FY10 (2.5-4.5 per cent growth quarter on quarter)”. |
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India’s stocks fell the most in a week, led by software service providers on concern a weakening dollar will hurt earnings of the country’s biggest exporters. Tata Consultancy Services Ltd., the largest software- services provider, fell the most in a week. Infosys Technologies Ltd., the second-biggest, declined 2 percent. Sun Pharmaceutical Industries Ltd., the most valuable drugmaker, fell the most in two months. “The dollar weakening is surely hurting,” said Vaibhav Sanghavi, a director at Ambit Capital Ltd. in Mumbai, who manages funds for wealthy individuals. “This might impact the next quarter numbers of export-driven companies.” The Bombay Stock Exchange’s Sensitive Index, or Sensex, fell 89.93, or 0.5 percent, to 17,141.18 as of 2:21 p.m. in Mumbai. The S&P CNX Nifty Index on the National Stock Exchange declined 0.5 percent to 5,093.95. Th BSE 200 Index lost 0.1 percent to 2,127.68. Tata Consultancy lost 2.6 percent to 577.75 rupees. Infosys declined 2 percent to 2,201 rupees. Wipro Ltd., the third- biggest software-services provider, slid 2.5 percent to 567 rupees. Software companies get 40 percent of their earnings in U.S. dollars. The dollar fell to a 14-month low against the euro as improving corporate earnings helped Asian stocks extended a global equity rally, encouraging investors to seek higher- yielding assets. The rupee rose for a second day, adding 0.3 percent to 45.9850 against the dollar. |
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Not even the biggest economic downturn since the Great Depression could slow the ongoing explosion of traffic over international Internet connections, and service providers are still building to accommodate it. The world economy slid into crisis about a year ago, crippled by key events such as the bankruptcy filing by investment bank Lehman Brothers, which occurred one year ago Tuesday. But between mid-2008 and mid-2009, the volume of Internet traffic between countries has actually grown faster than the prior year, according to research company Telegeography. International Internet traffic has grown at 79 percent since last year, up from 61 percent in 2008, a study released Monday found, according to a Telegeography press release. The study focused on links between, rather than within, countries. International traffic has more than doubled in the past year in emerging markets, including Eastern Europe, South Asia and the Middle East, but more mature regions are also seeing rapid growth, the company said. Traffic on international links connected to the U.S. and Canada grew 59 percent. Despite hard times, carriers have not been shy about building up their networks to handle the new traffic, which is being driven by new video services as well as mobile data hitting the wired backbone and other factors. For example, India’s Tata Communications said last month it would increase the capacity of its 6,700-kilometer TGN-Intra-Asia undersea cable, which went into operation just this year. TGN-Intra-Asia was designed partly to alleviate bottlenecks between Japan and Singapore and currently has a capacity of 650Gb per second (Gbps). It originally was set for expansion next year, but demand has grown, partly because the cable bypasses a seismically active area around Taiwan where some other cables have suffered earthquake damage. Service providers have been building up their international network capacity by 60 percent or more since 2007 and added 9.4Tbps of new international capacity just this year. Only two years ago, all international Internet links combined added up to just 8.7Tbps, according to Telegeography. Despite that expansion, the average utilization of networks has grown in some areas, rising from 56 percent to 62 percent within Asia. Copyright © 2008 IDG News Service |
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Budget should be IT Friendly: ISODA
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The InfoTech Software Dealers Association (ISODA) has charted out its expectation list from the upcoming budget. According to Harinder Salwan, Secretary, ISODA, “For the coming budget, we want that the government should bring an IT-friendly budget. We do have our recommendations for this upcoming budget.” The ISODA recommendations for budget are: With implementation of GST the imposition of CVD at point of entry and octroi in some areas will be a booster for the industry with lower prices.
Courtesy CT |
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The recently-announced Union Budget 2009-10 has received praise from IT industry. Sharing one such sentiment with ChannelTimes, Praveen Bhadada, Engagement Manager, Zinnov Management Consulting, said, “The exemption of the value attributable to the transfer of the right to use packaged software from excise duty will reduce the software piracy in domestic market and therefore, sales would go up.” “With the mandate to increase the banking network in the country, I see huge opportunity in the BFSI segment. This would provide an opportunity for Indian IT services companies to help the sector with solutions like centralization of core-banking system in un-tapped geographies,” he said. “The facilitation of ‘Mission in Education through ICT’ scheme would provide system integrators, software sellers and managed services providers with growth opportunity into the education sector,” he added. Furthermore, India would see new companies exploring further opportunities with minimal tax hassles. “If the Central Board of Direct Taxes (CBDT) is able to formulate safe harbor rules to resolve issues around transfer pricing by next year (considering that the STPI exemption is only for a year now), new companies would look at India as a growth market,” he said. Courtesy ChannelTimes |
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