Source: www.business-standard.com

Increasing number of mid-market companies with about 3,000-15,000 employees, are expected to adopt Human Resources Outsourcing in the coming years in an attempt to bring down cost and reap gains from latest technologies, says a study.

Moreover, in terms of adopting HRO, these firms are projected to surpass larger corporations having 15,000 or more employees in the next few years, reveals the study conducted by Everest Research Institute, the research arm of global consulting firm Everest Group.

According to the report, companies in the mid-market segment are adopting HRO due to the allure of a growing supplier base that continues to bring forward focused offerings that support cost reductions, access to up-to-date technology and standardised processes.

Estimates show that even though the mid-market segment at present comprises 51 per cent in terms of HR outsourcing activity, it constitutes only 16 per cent of the total market in terms of annual contract value.

However, in terms of market activity, the study highlighted that the mid-market would grow at a faster rate than the large market in coming years.

Noting that HRO suppliers have developed profitable offerings to penetrate the mid-market level, Everest Research Institute’s Vice President, HRO Research Monica Barron said, “… This is why we’re seeing a significant increase in HRO suppliers — including offshore suppliers — and offerings focused on the mid-market buyer.

“And this, in turn, is really good for the buyer because they now have more suppliers and offerings from which to choose.”

Source: economictimes.indiatimes.com

NEW DELHI: Even as Indian IT services grapples with a slowdown in US and dollar volatility, the domestic IT sector is growing at a very past pace. India’s IT services market is expected to grow to $8.1 billion by 2011 as against $4.1 billion in 2007, according to a report released by market research firm Springboard Research on Thursday.

India is the fastest growing market in the overall Asia-Pacific region with compound annual growth rate (CAGR) of more than 18.6%, the report said. Infrastructure application integration is the single largest category in India and is expected to contribute approximately 21% of the total IT Services market in India by 2011, it added.

“Compared to the Asia Pacific countries, enterprise IT outsourcing enjoys the highest growth momentum in India with a CAGR of 24.4% during 2007-2011 and is expected to become the second largest market opportunity in the country by 2011,” said senior research analyst for services at Springboard Research, Sanchit Vir Gogia.

The report predicts that the enterprise application integration, the second-ranked market in India currently, will slip to the third place by 2011 despite registering a high CAGR of 19.1%.

The market segments that are expected to witness the highest growth is infrastructure services, which is estimated to grow in tandem with the overall market and reach $4.27 billion by 2011. This will translate into 14% market share of the overall Asia-Pacific market. Infrastructure services play a critical role in business transformation, which includes mainframe centric solutions, desktop and distributed computing, network operations and monitoring, asset management, service delivery management, e-commerce and collaborative computing.

However, applications services with a CAGR of 19.6% will remain the most developed market segment in the Indian IT services space, while IT consulting is estimated to grow to $0.40 billion by 2011 compared to $0.22 billion in 2007. Meanwhile, the overall applications market is expected to grow at CAGR of 19.6%, to represent 16% of the Asia-Pacific market by 2011.

Driven by small & medium business enterprises, application hosting services will grow at a CAGR of 21.2%, while customised application development services will see a surge of demand.

On the other hand, growth of enterprise IT outsourcing in India is expected to fuel the surge of IT consultancy services, which currently occupies just 5% of the overall market. IT Consulting is crucial to all vendors, who use it as a market entry point.

“Not only is the India IT Services market forecast to be the fastest growing in the region, the country also has a rather unique position in the worldwide outsourcing arena through a well-educated and language-proficient workforce, that sets it apart from other Asian competitors,” Mr Gogia added.

Source: www.business-standard.com

Bracing up to counter the deleterious effects of the slowdown in the US, Cognizant Technology Solutions Corporation is further expanding its presence in India. The company, which is targeting 10-15 per cent of its revenue share from outside the US and European markets in the next two to three years, will invest approximately $46 million (Rs 201 crore) to further expand its infrastructure in Kolkata.

A company source told Business Standard the company would add about 500,000 square feet of office space in the first phase of its new fully-owned techno-complex presently coming up on 20 acres of land in Bantala, a Special Economic Zone designated area. “Once completed, this new facility will be able to accommodate approximately 4,000 new employees,” the company said. Cognizant currently employs around 5,000 personnel out of Kolkata in six development centres — one fully-owned and the rest leased facilities.

The company is following in the footsteps of compatriots like Tata Consultancy Services and Infosys Technologies by diversifying and expanding rapidly into emerging markets like China and India where it has made sizeable investments. It is also looking at expanding its presence in the Middle East and Latin American markets.

A good number of companies who outsource financial and healthcare services to India have been affected by the credit crunch in the wake of the market downturn in the US. Some have scaled back significantly on their IT spends this year. Hence, Cognizant is targeting new growth areas like infrastructure services, business process outsourcing (BPO) and Knowledge Process Outsourcing (KPO) in Asia.

Cognizant, whose clients include AstraZeneca and Molina Healthcare, cut its 2008 outlook last week to $2.81 billion from $2.95 billion, despite meeting analyst expectations on bottomline. The management is also said to be expecting the company’s top five clients in the healthcare segment to cut back spending into the third quarter of 2008..

Only 1.5 per cent of Cognizant’s second quarter revenues (ending June 30, 2008) of $685.4 million came from Asian markets, with the majority from the US market and 20 per cent coming in from Europe. The company presently has over 59,000 employees on its rolls, of which almost two-third are placed offshore, providing low-cost software development services and support primarily to US and European companies.

Source: www.gamasutra.com

India development studio FXLabs says it’s moving into outsourcing services, adding a new division to support publishers and developers who want to use their development and art teams.

Hyderabad-based FXLabs will provide outsourcing services for PC and Flash games, and also offer 3D modeling, characters, props and environment models, rigging, texturing and animation.

The studio staffs over 100 artists and game programmers, and claims to be the only team in India to develop a complete game entirely within the country. FXLabs says it is experienced in using the Unreal and Torque engines, as well as other programming tools.

FXLabs’ current development slate includes Inferno, a game based on Dante’s Inferno, a game based on Dhoom 2, which it calls “the most valuable property in Bollywood,” and a game based on Archie Comics.

“The outsourcing division was created to address and support the challenges faced by today’s publishers and developers in their internal production capacity,” says FXLabs founder and chairman Sashi Reddi. “Through this new service offering, we extend our expertise to achieving our partners’ goals.”

Source: www.nbr.co.nz

by Allan Swann - Local IT services company, Fronde Systems Group, has been appointed Google’s first business enterprises partner in New Zealand.

The deal means Fronde – a software as a service sector (SAAS) provider – can now call on the resources of one of the most dynamic and powerful companies in the world.

The Wellington-based company will be Google’s first partner in New Zealand for the Google Security, Compliance and eDiscovery products as well as Google Apps.

“These products and services have not been available in New Zealand for enterprise customers before so this is a significant development for corporate organisations,” Fronde’s general manager Steve Graham said.

Cloud computing ( which allows applictions to be accessed from a brower) has long been mooted for business applications, but concerns over security, outsourcing of information and the desire to keep operations inhouse have held the evolution of the market back.

Mr Graham believes there is a sea change in the way companies think about these technologie, and that they are no longer averse to looking at the business model.

“A lot of large companies are now seriously looking at these systems not just to cut costs, but to raise efficiencies. It makes far more sense than spending billions changing and upgrading your entire software system every few years,” he says.

For example, instead of running their own email services, stored on a central server that needs to be continually maintained, upgraded and requires specialised IT knowledge, customers will now be able to take advantage of Google’s storage, serves and expertise through the web.

Google’s web-based applications offer functionality comparable to most office suites, spam filters and anti-virus programs, saving businesses licensing and compliance costs.

These services are based on a subscription model, so businesses can give the system a try and if it doesn’t work simply drop it.

“With the SaaS business model, there is nothing to install or maintain, and Fronde anticipates significant savings for corporate customers. It will be great to see Google and SaaS products being adopted in the enterprise space by New Zealand businesses alongside our other SaaS solutions,”Mr Graham says.