- July 2002
- NASSCOM annual survey reveals software exports at Rs.36,500 crore and Domestic software market at Rs.11,500 crore
NASSCOM, the apex industry association of software and service companies in India today released the findings of its annual industry survey for the Financial Year 2001-02. The survey indicates that the industry in India grossed an annual revenue of Rs 48,000 crore (US$ 10.1 billion) during 2001-02, from Rs. 38,240 crores (US$ 8.4 billion) in 2000-01, registering an overall growth of 26% in rupee terms. The growth in dollar terms was 20%.
- Indian BPO players wear value-added services hat
Realising that low-end services mean low margins and low barriers to entry, many Indian BPO players are scrambling on the value-added bandwagon by offering niche, high margin services. Srikanth R P has the detailsThink of the Indian call centre industry and what immediately comes to mind are young graduates working odd hours in plush offices—handling hundreds of mundane calls. While call centres pay excellent salaries, as compared to other job opportunities that college graduates have access too, it’s also a fact that most call centre jobs are really mundane, low-end stuff. Providing services at a low cost has been one of the USPs of the Indian Business Process Outsourcing (BPO)/IT-Enabled Services (ITES) industry.
- IT-ENABLED SERVICES: Indian IT’s Lone Crusader
It stands out like a beacon of light in a storm,having withstood the test of the worst slowdown since the inception of the IT industry in the country. In a year of layoffs and benchings, it has generated employment at a faster rate than any other before it, and in times of slowing growth rates and slackening revenues, it has registered its strongest growth ever. In the process, the IT-enabled services segment has emerged as the new infotech wave, one that promises to get bigger each year, and promises to equal in revenue size and employment generation the IT industry itself?or perhaps even surpass those numbers.
- Business booms as call centres flourish in Bangalore
Headhunters in India’s Silicon Valley are jumping onto the IT-enabled services bandwagon by providing contract workers and software engineers to foreign firms for “back-office” operations.Headhunters are now betting on call centre business. “There is a huge demand now for English-speaking graduates and basic programmers in the IT-enabled sector,” said Gautam Sinha, chief of TVA Infotech, a recruiting firm headquartered in India’s IT capital of Bangalore.Sinha, who set up his company two years ago, said that several foreign firms looking to cut costs had set up base in Bangalore in the past year.Several foreign airlines, credit card companies and banks have shifted their “back- office” work to India which has the world’s second largest pool of English-speaking computer literates after the US.
- Satyam eyes buys, deals in BPO space
Satyam Computer Services Limited (SCSL), sitting on a pile of cash, is open to both acquisitions and strategic partnerships with potential clients to make the business process outsourcing outfit a major player in the global arena. Satyam has a huge cash reserve of Rs 1,200 crore, apart from a floating funds of over Rs 700 crore.To facilitate this, Satyam has floated a separate company called Nipuna Services Limited to focus entirely on strategic business relations in the BPO arena. The company, a few months before, had announced a foray into BPO space.
- TransWorks ropes in new VC, looks at $10 million revenue
ChrysCapital-funded call centre and BPO company TransWorks is set to announce the closure of its latest round of funding in the next couple of weeks. As reported earlier by eFE, the company is understood to have closed between $5-7 million and has roped in a VC investor as part of this round.ChrysCapital, which currently holds a majority stake in the company, is also likely to increase its stake in the company, according to TransWorks chief executive officer Prakash Gurbaxani. Commenting on the company’s overall performance, Mr Gurbaxani said that the company planned to close the current financial year with revenues of about $10 million.
- Call centre players see price war as rates come crashing
A price war has started in the call centre business. Some of the major players have slashed rates by as much as $13 and more per hour for outbound services, say sources. According to estimates, the rates are down from $18-$22 per hour to as low as $7-$12 per hour for outbound services in some cases. Prices have also come down for inbound services.
- BPO Growth Boosts Godrej & Boyce Business
In a bid to trigger sales growth, the office furniture division of Godrej & Boyce Manufacturing Company Ltd is planning to promote its recently introduced workstations and computer furniture range with aggressive marketing initiatives, this year.According to Mr Anil Verma, vice president and business head (office furniture division), Godrej & Boyce, the objective behind the launch of workstations was to cater to the growing business process outsourcing (BPO) segment which boasts of call centres, medical transcription centers, back offices and the like.
- Karnataka to unveil policy on IT enabled services
After its stupendous stride in IT services, Karnataka is now eying IT enabled services in a big way and is set to act on a McKinsey report which spelt out a strategy to create one million jobs in knowledge-based industries in the state over the next 10 years.McKinsey, which carried out the study at the behest of Confederation of Indian Industries (CII), Karnataka government and Software Technology Parks of India (STPI), has spoken about how initiatives in training, marketing and infrastructure could generate such a huge employment.The findings of the report were presented to Karnataka IT Task Force, chaired by Chief Minister S M Krishna, on July 22 evening.Briefing reporters later, Karnataka IT Minister D B Inamdar and IT Secretary Vivek Kulkarni, said that the government proposed to come out with a policy for IT enabled services in a month after incorporating suggestions from Task Force members.The Task Force members included Pradeep Kar, Srini Rajam and Ghanshyam Das.The McKinsey report was not made public. Das said that it basically talks of how strengthening of enablers would serve the cause.
The report, Kulkarni said, stressed the need to promote Karnataka and Bangalore as a brand and attract investment to the state. The million jobs in the private sector that would be targeted also includes in IT services and biotechnology.
McKinsey also recommended promoting secondary centres such as Mysore, Hubli, Mangalore, Gulbarga and Belgaum. “The potential for growth in these centres is 50 times compared to probably five times in Bangalore,” Kulkarni said.
Sources indicated that the government is likely to come out with ITES policy before Krishna’s visit to the US that begins on August 28.
Asked if Krishna would “kick-off” marketing campaign for Karnataka in the US, Inamdar replied in the affirmative.
- India Gains Ground Over Rivals In ITES
Over the last two years, India has scored over its nearest rivals – Ireland and Philippines in terms of being the most preferred destination for outsourced IT-enabled services (ITES) from the US. According to industry experts, Indian ITES industry might face serious threat from China in the next three years.National Association of Software Services Companies (Nasscom) estimates that the US annually outsources nearly $25 billion worth ITES activities. “By and large, US is the main country which heavily outsources its ITES activities and maximum ITES activities by the US companies are outsourced to India,” Nasscom vice president Sunil Mehta said.
- Satyam scouts for investors in BPO subsidiary
Satyam Computers has begun approaching private equity investors to raise capital for its business process outsourcing (BPO) subsidiary. The company is understood to have approached a few large funds and is believed to be valued at around $50 million.Though the amount to be raised could not be ascertained, large private equity funds are typically not interested in deal sizes of less than $10 million.
- Wipro acquires 66 per cent stake in Spectramind
In an all-cash Rs 4.07 billion deal, IT major Wipro Limited has acquired majority stake in Spectramind e-Services.The Bangalore-based Wipro has acquired an additional 66 per cent stake in Spectramind, in which the former’s aggregate interest would now be around 90 per cent of all outstanding equity shares, including convertible preference shares.
- HSBC Private Equity Scans IT Services And BPO Space For Deals
HSBC Private Equity has turned the searchlight on the IT services and business process outsourcing (BPO) arena in India.The firm will be making these investments out of the HSBC (Asia) Technology Fund which has a corpus of $55 million and is focussed on technology investments in Asia.
- ITES valuation honeymoon may come to an end
Good times seem to be coming to an end for the IT-enabled services (ITES) sector, which for the last one year has been enjoying high post money (or post-investment) valuations. According to some industry experts, the present (high) level of valuations after investments in the ITES sector will last only for another six months or so.Currently, post money valuations of some ITES companies like Spectramind, Daksh eServices and CustomerAsset have been over two times the revenues.
- IBM India woos ITES sector with bouquet of services
IBM India is focusing its energies on the call centre industry with a range of offerings and services like outsourced IT infrastructure. IBM India has enhanced its call center offerings to include a comprehensive range of VoIP solutions to address the emerging multimedia contact center markets in India.Explaining the rationale behind the company’s decision to expand its strategic outsourcing service to the call centre industry, IBM India regional manager (West) Ramesh Narasimhan said: “A call center is a people-intensive business and the bulk of business can be leased from IBM. Besides call centers will be utilising a variety of technologies and products from a variety of vendors making the management of all this difficult. IBM can undertake the management of both the IBM as well as the non-IBM infrastructure on a day-to-day basis thereby allowing the call centers to focus on their core business. This will also eliminate investments in areas unrelated to the core business.”
- General Atlantic set to take 20 percent in Daksh eServices
Daksh eServices is all set to raise over $20 million from US-based private equity investment firm General Atlantic Partners (GAP), by offloading over 20 per cent of its stake.According to reliable sources, the investment round is likely to be completed within a month, resulting in equity dilution of its existing investors like Amazon, CDC Capital and angel investor Ashish Gupta.
- FirstRing mandates Kotak to raise $10-15 million
Bangalore-based call centre company FirstRing has mandated Kotak Mahindra to raise $10-15 million its next round of funding.FirstRing, which is also believed to be considering a deal with Polaris Software Lab (the merged entity formed by the merger of Polaris and Citibank-promoted OrbiTech), is exploring various options including raising capital from financial investors, according to reliable sources.
- ECIT to offer call centre training
ECIT, the IT education arm of public sector ECIL, has pitched itself against the big IT training companies in India by foraying into the ITES area offering call centre training and technologies.Armed with the success of its IT training centres across the country, the IT education wing is now all set to diversify into providing courses and services in the IT enabled services (ITES) sector, ECIT director and in-charge VRS Natarajan said here.
- Datamatics allocates Rs. 50-100 Crore for BPO acquisitions
Datamatics Technologies has allocated Rs 50-100 crore for overseas acquisitions in the business processing outsourcing (BPO) space. The company, which has been active in the BPO segment for a while now, is targeting a growth rate of more than 50 per cent in the next two years from this segment.Datamatics Ltd chairman Dr Lalit S Kanodia said the company has always been active in this space through its group company Datamatics Technologies, specifically in the printing and publishing sectors. The company plans to expand its activities in the BPO segment with a focus on the accounting space. For the acquisition, Datamatics is targetting a company that is specifically focused on the accounting space and has a strong presence in the US markets. Dr Kanodia said revenues from BPO activities this year stood at Rs 80 crore.
- Port@l Net Services to set up 3 Call Centres
Port@l Net Services (PNS), part of the UK-based Port@l Group, on July 9 announced its plans to set up three Contact Centres in India over the next 12 months, investing $ 7.5 million.The Centres would have 1000-1500 seat capacity and in the first phase of its India operations, the company would use Port@l ‘s proprietary “Reverse Hosting” model to lease 750 seats from the existing Call Centre units in Delhi, Mumbai and Hyderabad, a company statement said.It said Port@l group along with other call centre and telemarketing companies in Britain had jointly commissioned a survey by a UK-based research agency on the Indian Call Centre market.According to the survey, the Call Centre industry development in India was highly speculative and approximately 74 per cent of the newly built call centre capacity in India was currently being under-utilised, the statement said.
- ISS India bags contracts worth over Rs. 15 Crore for back-office services
Integrated Software Solutions (India) Pvt Ltd (ISS), a subsidiary of $20-million-Radiant Softsol Inc, has bagged major orders from its US clients for back-office services in the areas of HR, insurance, transaction and insurance processing.Speaking to eFE, ISS (India) assistant vice-president Mr R Madhusudhana Rao said, “ISS has signed three major contracts of over Rs 15 crore with its US clients during June.”
- Crossdomain offers bulk filing of returns online
City-based business outsourcing company Crossdomain has launched Crossdomain-Suvidha, an Internet-based offering for filing income tax returns in bulk. The government, it may be recalled, has allowed employers to file tax returns on behalf of their employees in bulk.Speaking to eFE, Crossdomain executive director LS Ram said more than a revenue generating endeavour this was going to be a brand building exercise for Crossdomain. “Our corporate strategy is to emerge as the BPO behind the BPO and Crossdomain-Suvidha is in line with that strategy,” he added. The company has initiated discussions with companies such as GE, HP, Cisco and a slew of others in this regard.
- Satyam to grade ITES firms for eSCM certification
Satyam Computer Services Limited will be nominated as a lead evaluator by US-based Carnegie Mellon University (CMU) for its soon-to-be launched eSCM (eServices Capability Model) certification.Disclosing this to eFE, CMU School of Computer Science director (business development) Mr Annaswamy Gopal said Satyam, being the founding member of eSCM along with CMU, would assess those ITES companies coming for quality certification.
- Patni Computer Systems plans to foray into BPO
Patni Computer Systems (PCS), the Mumbai-based software solutions provider is evaluating opportunities in the business process outsourcing (BPO) space. Speaking to eFE, Patni Computer Systems senior vice-president Vijay Khare said that the company was open to acquisitions in this segment. He said that the company would first test the waters through an alliance with a niche player to gain domain expertise, before making an acquisition in the space.Commenting on the planned foray into the BPO space he said, “The BPO sector is lucrative and offers a lot of advantages as it will enable the company to provide full outsourcing services like financial systems and HR rather than just IT processes.”
- NASSCOM annual survey reveals software exports at Rs.36,500 crore and Domestic software market at Rs.11,500 crore
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