Indian Banks and Insurance Companies Squeeze IT Vendors

During the preceding months of 2009, when the growth of healthy companies outside India had slowed to around three or four percent annually, Indian IT companies were clocking up eight to ten percent. Why weren’t they hit as badly by the global recession? Because they turned their sights on the Indian market and, to their delight, discovered salubrious springs of business there. LARGE springs.

The Indian banks and insurance companies were major sources of the warm, mineral-rich water that the IT companies were relaxing in while the rest of the world moaned. But it seems that after a while, those same banks and insurance companies got wind of how important they were to the health of the IT companies, and they decided to leverage this.

The Indian banks and insurance companies are now knocking on the IT companies’ doors with a smile on their face saying, “Seeing that we’re giving you all this business and keeping you well-fed, and that without us you’d be up the you-know-what creek without a paddle, maybe you wouldn’t mind re-negotiating our contracts worth $800 million to provide one hell of a more services for the same money. If you say no, you might regret it.”

Knowing how things go in India, the IT cos will join their palms in a namaste, touch the feet of the clients and murmur, “Whatever you say… you are our friend, philosopher and guide.”

Let’s see how it pans out… I’ll keep you posted.

Cheers,

source: livemint.com

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Guy Kawasaki Visits Bangalore: Existence of India Confirmed!

Yup, the social media and web wizard, who was once the Chief Evangelist of Apple Computer, is the author of 9 books (especially "The Art of the Start"), and is now the Managing Director of early-stage venture capital firm Garage Technology Ventures,  attended India’s Nasscom (The National Association of Software and Services Companies) Product Conclave as the keynote speaker. NASSCOM held the event over the 27th and 28th of October 2009 at Bangalore.

It’s not often that stellar figures in Internet marketing (Guy is also a Twitter expert) come to this side of the planet. The fact that Guy has reinforces the idea that India is a software happening place.

That said, there are sections of the audience that felt he underestimated their familiarity with hip web culture, especially Twitter. He also apparently said that labour in India had a minimal cost. Wrong, Guy, WRONG. If you want to run a quality company you need quality people, and although they may not cost as much as in the overpriced West, they do demand, deserve and get salaries that afford them a very comfortable lifestyle.

Being a hard-core Tweeter myself, there were a few twuggets (Twitter nuggets) he threw at the crowd. If you’re into Twitter, you should read on… else skip the red text:

Guy’s objective is to gain as many followers as possible by tweeting interesting factoids. He believes there is value in repeating tweets (like the value of repeating TV ads), so each of his tweets are resent every eight hours  with a different wording. His reason for triple tweeting is that not all people are on twitter at the same time.

He pointed out that the first time he tweets something it gets him 700 page views, second time 500 page views and third time 400 page views.

He employs about three people to find interesting stuff and tweet on his behalf, and spends much of his day on Twitter himself. 

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The theme of his speech was startups.

>>> He advised startups not to spend money on venture capital (did he shoot his foot?) and advertising, but to promote their offering through social networks like Facebook and Twitter.

>>> He said that he made investment decisions based on a gut feel and didn’t expect due diligence by the entrepreneur. Case in point: Twitter (he was one of the early investors).

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I personally have read through his foundation articles on how to get more out of the professional social network LinkedIn. There was nothing new in them, but  then again, I believe he could have been the first to state the facts with an army of authors drawing on his wisdom. When all is said and done, I have a healthy respect for the man.

Cheers!

Sources: The Times of India, WATblog.com, Pluggd.in

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Outsourcing: Where India, China and Vietnam Are Going

BusinessWeek published an article dated 25th September, 2009 about the world’s outsourcing market being worth $373 billion.

The new Canadian research firm, XMB Global, predicts India and China as the leading outsourcing countries with a growing market of 14.4% this year, with India generating revenues of US$48 billion and China at US$28 billion.

Vincent Altez, a senior analyst at XMG says that the dynamics of global sourcing will undergo a sea change in 2010 because of various factors.

In his report he says that India will snag 44.8 percent of the global market with China following closely behind with 25.9 percent. But the growth is expected to remain more or less the same as that of 2008 with no significant growth because of Satyam Computer Services’ financial debacle and demand paving the way for other offshore countries. Altez in his report said that recession “has provided the opportunity to rationalize and shift work to other offshore destinations other than India”.

According to the XMG report, the Philippines is responsible for 6.9 percent of the total offshore revenue which is more than its 6.7 percent revenue generated in 2008. The Philippines has registered revenue of US$7.3 billion at the end of the year which makes it the third-best performing destination with revenue growing at 21.7 percent. The figure is perhaps less than the expected 24 percent because of indifferent demand due to slow growth for IT services and with key players like India and China delaying their expansion plans.

Though the worldwide growth graph this year at 14.4 percent will be lesser than last year’s 19 percent, it is still seen as positive because the expansion in the industry is in spite of the recession. Altez in his report noted that offshoring and outsourcing is “part of a natural ongoing economic revolution notwithstanding a financial crisis”.

Altez says that the economic recovery of Europe and the United States, as well as the Chinese and Vietnamese governments’ determination to attract foreign investors, will have a hand in changing the dynamics of global sourcing in 2010.

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