BUSINESS & TECHNOLOGY IN THE U.S. & INDIA JULY - 2010 SILICONINDIA.COM

PUBLISHED SINCE 1997sil iconindia

Upinder Zutshi

In My Opinion: Atul Bhatnagar, IXIA VC TALK: Ashwin Raghuraman, Ashwin Raghuraman, India Innovation Fund BPO Special

Clearspring secures $18 Mn in FundingThursday, May 22, 2008

McLean: Clearspring Technologies, the world's largest widget syndicationand tracking service, has secured $18 million in a series C funding roundthat includes leading venture capital firm New Enterprise Associates (NEA),Novak Biddle Venture Partners and other..

news groups events blogs messages mentorship

Clearspring secures $18 Mn in FundingThursday, May 22, 2008

McLean: Clearspring Technologies, the world's largest widget syndicationand tracking service, has secured $18 million in a series C funding roundthat includes leading venture capital firm New Enterprise Associates (NEA)Novak Biddle Venture Partners and other current investors. The new roundwill fund expansion of Clearspring's viral marketing network, which currentlyserves and tracks almost four billion widgets monthly. It will also be used toextend Clearspring's reach into international markets and further develop itsrapidly growing advertising network and vast data infrastructure andoptimization services. Clearspring's category leadership is well-established ?according to comScore's Widget Metrix report, Clearspring tallied 126 millionunique widget viewers in March 2008, making it the No. 1 widget platformin the world.

career videos

Global ICT spending to top $3 7 Mn in 2008: ReportThursday, May 22, 2008Kuala Lumpur: A study by the World Informatio hnology and Services Alliance (WIT A)

indicates that the global information and communi i s technology ( T) market will reach

$3.7 trillion this year and $4.0 trillion by 2011.

The report, titled "Digital Planet 2008", released by WITSA in conjunction h the ongoing

16th World Congress on Information Technology (WCIT 2008), indicated that slowing

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India-U.S. trade to touch $60 Bn: diplomatThursday, May 22, 2008

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India’s largest professional network

SiliconIndia.comSiliconIndia.com

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PublisherHarvi Sachar

Editor-in-ChiefPradeep Shankar

Managing EditorChristo Jacob

Deputy EditorsJayakishore Bayadi Jaya Smitha Menon

Editorial Staff

Anonya Roy BennyThomasBinuT Paul Eureka BharaliGargi Sinha JubyThomasKukil Bora PragyanAcharya

Roshna Sankar Vimali Swamy

Sr.Visualizer Raghu KoppalSubscription Manager P Magendran

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siliconindiaJuly 2010, volume 13-07 (ISSN 1091-9503) Published monthly by siliconindia, Inc.

siliconindia’s circulation is audited and certifiedby BPA International. siliconindia is available throughmainstream retail outlets such as Barnes & Noble, Borders, andTower Records. It is also available at ethnic Asian Indian stores inmajor Indian hot spots across the U.S. The magazine is also dis-

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Copyright © 2009 siliconindia, Inc. All rights reserved. Reproductionin whole or part of any text, photography or illustrations without writ-ten permission from the publisher is prohibited. The publisher assumesno responsibility for unsolicited manuscripts, photographs or illustra-tions. Views and opinions expressed in this publication are not neces-sarily those of the magazine and accordingly, no liability is assumed bythe publisher thereof.

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JULY - 2010

[Business]Indian BPO Industry A Silver Lining Ahead?By Vimali Swamy

Expansion of Domestic BPOCompanies Into SmallerCities, a Boon By Sudip Saha, Springboard Research

Healthcare A Challenging yetPromising Market for IndiaBy Gopi Natarajan, OmegaHealthcare

Managed Payroll ProcessingBy Vishwanathan K A, RamcoSystems

Lending Rescue Measures AConundrumBy Ashwini Kumar, Infosys Technologies

[Technology]On-Demand Vs On-PremisesCollaborationBy Nanda Ramanujam, Axentis Software

[Technology]Testing, the ‘Cloud’ WayBy C.V. Narayanan, Sonata Software

Software Testing The NextBig Employment WaveBy Pradeep Chennavajhula,Edista Testing

M-commerce Commerce forthe MassesBy Nayan Bheda, Suvidhaa Infoserve

Indo-US Trend in AMSSemiconductor DesignServicesBy Ash Patel, Sankalp Semiconductor

[CIO Profile]Technology is Fast ChangingBe Open to Embrace theChange By Vimali Swamy

[SI 20 Profile]

[In My Opinion]Preparing for the Promise of 4G By Atul Bhatnagar, CEO, IXIA

[Infocus]

[VC Chakra]LucidMedia Raises $ 4.5 Mil-lionJivox raises $4 Million

[CEO Spotlight]Effective End-to-End ServiceDelivery Capability is the MantraTodayBPO Vendors Align with Clients ViaRight Shore Global DeliveryDemand for Game Changing Ideas

[VC Talk]Start-up ideas We WouldLike to FundBy Ashwin Raghuraman, India In-novation Fund

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Contents July2010

16 Cover Story

Editorial

The BPO industry got India the tag ‘back office of theworld’. But now Indian players have to strive hard toretain the status as they have to compete with the newer

destinations like Philippines, China, Vietnam, and Mauritius.While India's business process outsourcing (BPO) industry isforecasted to increase its revenue this fiscal by 15 to 16 percent,there are serious challenges to achieve the grand goal of $50billion exports revenue by 2020. The domestic market seems tobe a silver lining and it opens the doors for new hopes for theIndian BPO players. But, to win the game it is high time for In-dian BPO players to think about the right model and fresh man-agement in order to redirect further growth. As the domestic BPO market is following the same curve

as that of BPO export market to move up the value chain, thechallenge for these players will be acquiring the right talentwith domain expertise, especially in the rural areas. Moreover,they have to compromise on the pricing and also will have tofind their own solutions for infrastructure as there are frequentblackouts in rural India. In the coming years, opportunities will not only be in back of-fice augmentation, but they will extend to processes throughwhich enterprises will be able to reap the benefits. Though theconcept of BPO in prisons and rural areas has already been im-plemented, it will be difficult to crack the mindset of the cus-tomers to gain the buyer’s confidence. It’s high time for all theBPO players to think about a strong business model that willwork in the domestic market. Let us wait and see, and not countthe chickens before they hatch!

Please do share your thoughts with us.Christo JacobManaging Editoreditor@siliconindia.com

High Time to Renovate!

NicheScriptingIT Services

Market

Infinitein

By Christo Jacob & Vimali Swamy

Upinder Zutshi

s i l i con ind ia |7|J u l y 2 0 1 0

Driven by the increasedconsumer demand forwireless data bandwidth,cellular data speeds haveincreased over the last

decade by a factor of 10 every 3-5years. Reporterlink has estimated thatwireless data traffic will increase ten-fold between 2009 and 2017 – a 59 per-cent CAGR. Fueled by a rapid increasein interactive data and multiplay appli-cations, data traffic is expected to hit1.8 exabytes/month. Video is the largestbandwidth consumer today, a trend thatwill continue in the foreseeable fu-ture.(see figure 1)Mobile carriers are hard at work de-

veloping next generation of networks tohandle the huge increase in mobile traf-fic. Long Term Evolution (LTE), alsoreferred to as 4G, is widely acknowl-edged as the next generation technol-ogy for both voice and data wirelesstransmission. With the exception of theair interface, LTE is an all-IP network– taking advantage of and convergingwith IP network technology. LTE hassome impressive capabilities:� Support for multiple-input, multi-ple-output (MIMO) antenna tech-nology, including 2x2 and 4x4configurations.

� 300 Mbps downlink and 150Mbps uplink bandwidth whenusing 4x4 MIMO.

� Latencies of less than 5 ms.� Hundreds of users per cell.Most major telecom equipment man-ufacturers (TEMs) and carriers haveannounced their intention to developand provide LTE products and serv-ices. As of early 2010, 51 providersin 24 countries have made commit-ments. Early deployments are ex-pected in Asia and North America in2010, with significant expansions inall major markets in 2012. 2013 willsee some 85 million LTE subscribersand nearly half a billion people willuse LTE by 2015.

In order for enterprises and carriersto be fully ready for the 4G transition,they must fully test their devices andnetworks:� From end-to-end, from the radiotower through the IP core.

� At scale, using well modeled sce-narios based on actual subscriberusage patterns.

� At load, especially over the mobilebackhaul network as it necessarilymoves from TDM to Ethernet-based infrastructure.

End-to-End Wireless TestingWireless network testing must en-compass not only the latest technolo-gies, but incorporate the interactionsbetween existing systems and emerg-ing solutions. The major componentsof an end-to-end wireless network so-lution are shown in the figure 2.

End-to-end testing of a wirelessservice must separately test the com-ponents in each of the radio access net-work, wireless core network, andInternet core networks, test each of thethree subsystems independently andtest the entire system end-to-end. Aswireline and wireless networks con-verge, multiple types of interfacespeeds must be tested in conjunction,including 10 GE, 40 GE, and 100 GE.Proper testing occurs at multiple

levels, usually in a sequential manner:� Compliance testing is an essentialfirst step in ensuring correct opera-tion and interoperability. Compli-ance tests are built from RFC andother standards.

� Functional testing further exer-cises device capabilities with com-binations of options, multipleconnections, differing types of traf-fic, and many sequences of opera-tions.

� Performance testingmeasures rawcapacity, such as the maximumnumber of connections, maximumrate of connection establishment,and maximum uplink and downlinkthroughput.

� Scalability testing measures realworld ability to handle a completeuser community, and requires real-istic traffic loads that meet and ex-ceed network capacity.

LTE Service Validation Multimedia and peer-to-peer applica-tions account for the lion’s share of the3G and 4G bandwidth usage. The per-ception of service quality is everything

to the customer, and the lynchpin inpreventing customer churn. Networksmust forward and shape traffic so as toensure balanced quality of experience(QoE) for all network users.

As smart wireless devices becomemore and more prevalent, serviceproviders must be able to test theirnetworks with exponential amountsof application traffic in diversemixes. They must anticipate the del-uge of voice, video, P2P, gaming, andother data traffic on their wirelessnetworks. (figure 3)In addition to traditional network

based packet metrics such as latency,

jitter, and packet loss, serviceproviders need to use QoE testing tounderstand the user experience prior tonetwork deployment. This requires theability to correlate QoE statistics on anaggregated and per-user basis, deter-mine if the service level agreements(SLA) are being met, and understandthe impact of one service on another asthey compete for network resources. Traffic shaping and QoS policies

are critical to the integrity of theseSLAs, and a growing and importanttrend in service provider networktraffic shaping is the use of data

packet inspection (DPI). DPI goes be-yond the typical processing of headerinformation and looks at the datawithin the packet to determine thetype of traffic being processed. DPIallows for better network control,prevents unauthorized users and serv-ice types, limits denial of service at-tacks, malicious traffic, and allowsproviders to manage bandwidth-in-tensive data such as P2P.

Preparing forthe Promise of

figure 2Wireless service, end-to-end

figure 3

The perception of service quality iseverything to the customer, and thelynchpin in preventing customer churn

iPhone is the perfect example of a highperformance, multimedia-capable device, and is the tip of the iceberg ofwhat is to come

iinn mmyyopinion

Atul Bhatnagar

4GBy Atul BhatnagarThe author is CEO, IXIA

s i l i con ind ia |6|J u l y 2 0 1 0

figure 1

Subscriber modeling, includingmulti-UE emulation, allows telecomequipment manufacturers (TEMs)and service providers to assess theperformance of their service delivery.Test engineers must:� Define how users connect to theirservice provider network.

� Designate upstream and down-stream bandwidth for each sub-scriber.

� Specify which applications areused and how they behave whentraversing the network and inter-acting with each other.

� Configure multi-service trafficdistribution for each subscriber.

� Model usage for each applicationwith advanced timelines for trafficload profiling over an hour, a day,or a number of days.

� Measure QoE per-application, in-cluding response latency, packetloss, jitter, MOS scores for VoIP,and MDI and MOS_V for video.

Validating Mobile BackhaulMobile backhaul is the network fortransporting mobile traffic betweencell sites (BTS/NodeB’s) and radiocontrollers (BSC/RNCs). Backhaul isone of the major contributors to thehigh costs of building out and run-ning a mobile network at approxi-

mately 25-30 percent of total operat-ing expenses. Rapid growth in mo-bile broadband traffic, however, hasoverloaded TDM circuits. Adding additional TDM circuits

to address this challenge is not a vi-able option. Operators are insteadlooking to move to packet-basedbackhaul techniques using IP andEthernet to gain a lower cost per bit.Using Carrier Ethernet for wirelessbackhaul potentially allows operatorsto support large bandwidth increasesfrom cell sites, while only incurringsmall increases in operationalcosts.(figure 4)The move from TDM to Ether-

net-based transport does not comefor free. TDM circuits are well es-tablished at providing ultra-high re-liability, voice quality of service, andaccurate timing. Ethernet technologyrequires careful attention to matchthese capabilities. Testing for Ethernet-based mo-

bile backhaul systems can be splitneatly into performance testing andconformance testing. Performancetesting determines how a deploymentwill handle real world traffic interac-tions at full scale, while conformancetesting determines if the appropriatestandards have been implemented onnetworking devices correctly.

It is essential that wired and wire-less components now be tested withthe same types and scale of traffic seenin actual network deployments. TheiPhone is the perfect example of a highperformance, multimedia-capable de-vice, and is the tip of the iceberg ofwhat is to come. Networks, both wire-less and wired, must forward andshape handheld-driven traffic so as toensure balanced quality of experience(QoE) for all network users.Such increases will require

providers to understand the network’sability, including mobile backhaul, todeliver services to millions of cus-tomers in a timely and consistent fash-ion. In order to accomplish this goal,providers must employ subscribermodeling in order to understand whattheir networks can handle in realworld situations.

ConclusionThe transition from 3G to 4G wire-less networks and the required inter-operability with legacy technologieswill unleash a level of unprece-dented complexity. Legacy tech-nologies need to seamlessly interactwith newer technologies in order toattract subscribers and limit mainte-nance and upkeep costs.

Service providers will continue tosupport multiple wireless technolo-gies. It is essential that the wirelesscore network be tested using multi-UEs, subscriber modeling, and end-to-end network testing. si

si l i con ind ia |8|J u l y 2 0 1 0

It’s time to pay the unpaid. At least550 high net worth individualsand entities have been listed by

the Income Tax Department whoeach have unpaid tax of Rs. 25 croreand above. The amount has doubledin the last two years to Rs. 2.5 lakhcrore, almost 66 percent of the totaldirect tax collection of 2009-10.The total tax arrears were Rs.

2.30 lakh crore till March 31. But an-other Rs. 20,000 crore has alreadybeen added to it in the new fiscal. Thedepartment has targeted to recoverRs. 14,000 crore this year. In the pre-vious year, nearly Rs. 12,000 crorewas recovered by the department.With the help of the Individual

Transaction Statement (ITS), incometax officers can have access to the in-

dividuals’current assets and to infor-mation like investment in mutualfunds, shares, and other expenditure.In 2009, the IT department’s Di-

rectorate of Recovery had analyzedthe dossiers that had outstanding de-mands of more than Rs. 25 crore. Outof the total of 551 such dossiers, only258 cases were found to be havingwholly actionable demands. Theseare the demands that had not beencovered by any write-off proposal,BIFR proceedings, and settlementcommission proceedings.As further analysis showed, 227

out of 258 cases were concentrated innine major cities. At the time of an-nual general conference which washeld in the capital last year in August,a list was also handed over to each

chief commissioner of IT.According to sources officers in

the Joint Director and AdditionalCommissioner ranks, armed withthese dossiers, have been asked tosupervise the cases and initiate at-tachment proceedings, if necessary.They can ask for records and latestbalance sheets in order to detect cur-rent assets from which recoveriescould be made.

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s i l i con ind ia |11|J u l y 2 0 1 0s i l i con ind ia |10|J u l y 2 0 1 0

Even though India has becomesynonymous with outsourcing,Indian companies have created

an amazing number of job opportuni-ties in the US. Through nearly 500 in-vestment and acquisition deals worth$26.5 billion, Indian firms have cre-ated about 60,000 jobs in the US in the2004-09 period. A report, ‘How America Benefits

from Economic Engagement withIndia’, released by the prominent Con-gressman Jim McDermott highlightsthat during 2004-2009, 90 Indian com-panies made 127 greenfield invest-ments worth $5.5 billion, and 16,576jobs created in the US greenfield in-vestments were those that were madeto start a new venture by constructingnew operational facilities from theground up. The top three destinationstates for greenfield investments were

Minnesota, Virginia, andTexas, in that order.The report, jointly pro-

duced by University of Maryland,India-US World Affairs Institute, andFederation of Indian Chambers ofCommerce and Industry, gives a com-prehensive analysis of America’s eco-nomic engagement with India duringthe period. It comes on the heels of USPresident Barack Obama ending taxincentives to the US companies thatmove jobs outside the country.The report focused on the specific

aspect of globalization of the Ameri-can economy, especially the US, Indiabusiness relationship.The investments mainly were in

mining, manufacturing, and other in-dustries, the report says. The top threestates in terms of jobs created wereOhio, Texas, and California, the report

says. IT services sector, which ac-counts for the bulk of the outsourcingdeals, received less than 15 percent ofthe total investment.During 2004-09, 239 Indian com-

panies made 372 acquisitions in theUnited States. The five US industrialsectors that received the most green-field investments were metals, soft-ware and IT services, leisure andentertainment, industrial machinery,equipment, and tools, and financialservices, accounting for almost 80 per-cent of the total greenfield investmentsin the US.A 2004 Goldman Sachs report had

forecast that nearly six million US jobswould be shifted overseas to low-wagecountries like India.

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In a bid to inspire the budding entre-preneurs, Obama has met the smallbusiness entrepreneurs at White

House and lauded an Indian woman en-trepreneur for her success. Prachee J.Devadas, who moved to the US to turnher entrepreneurial dreams into reality,successfully set up a technology servicescompany in the US that has grown from1 to 120 employees. Synergy Enterpriseswas named among Washington Tech-nology’s 2008 top 25 small contractors.Prachee Devadas is the President

and CEO of Synergy Enterprises, a cer-tified woman-owned company, whichprovides information technology andmanagement consulting services tolocal, national, and international clien-tele in the public and private sectors. Herhusband Anand Devadas is the VicePresident of the company. Before start-ing SEI, Prachee Devadas worked forsmall companies gaining experience inbusiness development, managing multi-million dollar contracts while providingprofessional services in training andtechnical assistance, publication devel-opment, grant review, and conferencemanagement.“Prachee told me that when she

started she had just one employee.Today, she employs more than a hun-

dred people including her husbandAnand,” said Obama with the IndianAmerican couple sharing the stagewith him after the meeting with smallbusiness owners.According to Obama, the central

promise of America is that it is a na-tion where anybody who’s got a goodidea and willingness to work hard cansucceed; and small businesses had cre-ated roughly two out of every threenew jobs in our country.“It’s that promise that has drawn

millions of people to our shores. It’swhat drives workers to become theirown bosses. It’s what propels somebasement inventor to bring a new con-cept to market,” Obama said citing theexample of Devadas couple. si

Indian Companies Created60,000 Jobs in the US

Prachee Devadas Shares Stagewith President Barack Obama

It may be a small part of the overallbusiness process outsourcing sec-tor, but the emerging KPO space in

India with a market size of $50-70 mil-lion at present is likely to grow by 25-30 percent annually till 2013.According to Gartner, coming from asmaller base, the growth is higher.Gartner Research Director Tervin-

derjit Singh said that the growth in theindustry is expected to be driven bythe rising demand for profession-based services. They include researchfor capital and financial markets, paralegal works, editing jobs for interna-tional publishing houses among manyothers.KPOs core value propositions are

premised on providing business-re-lated analysis and expertise on an on-going basis rather than transactionalbusiness process or technology-basedexpertise. For example, contact centresare a BPO capability, but collections

analysis is a KPO analytics service.In terms of the growing competi-

tion from other emerging markets forsuch services, Singh opines that al-though other offshoring sites likePhilippines and Indonesia are emerg-

ing, India is still ahead. Countries likePhilippines and Indonesia are still notmature enough in high-level profes-sional work which India can provide.Though the ongoing European

debt crisis is not likely to affect thebusiness volumes of domestic KPOs,the outsourcing firms having morethan 30 percent exposure in northernEuropean countries will be facingtough times even as their long-termprospects remain strong. Infact forhim, the domestic outsourcing firmsshould maintain a right geographicalbalance from the point of view of theirclient base and opt for multi-shoringof their operations to hedge againstsuch a crisis. si

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The growth that India hasachieved so far is based onpatents that have been gener-

ated outside the country and it’s timefor the scientists in India to becomepioneers in innovation and technol-ogy development. “Research nowmust be national, especially in basicscience, to be able to meet globalcompetitiveness,” said former Presi-dent A.P.J. Abdul Kalam.Addressing scientists and stu-

dents at the Homi Bhabha audito-rium, Kalam said that the institutewith its rich heritage in research,basic sciences, and technology re-search can help in upgrading thecountry’s growth and prosperity.

Kalam emphasized on green en-ergy and told that scientists shouldfocus on moon-based solar power orspace power as it is non-polluting.“We should work on safe transmis-sion of solar power from outer spaceto earth for human habitation. Theearth, moon, and mars are not sepa-rate entities but strategic entities forhumanity,” he added.Chalking out a mission for scien-

tists, Kalam put forth some scientificchallenges such as increasing solarphotovoltaic cell efficiency by usingcarbon nano tubes, nuclear powergeneration using thorium based re-actor, proteomics research, inte-grated vaccine development,

prevention of HIV/AIDS, forecast-ing earthquakes, and work on adultstem cells, umbilical stem cells, andembryonic stem cells.Kalam presented a model of AS-

TROSAT, India’s first multi-wave-length astronomy satellite, whichwill be launched on board the PolarSatellite Launch Vehicle in April2011.

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in

A.P.J. Abdul Kalam

s i l i con ind ia |13|J u l y 2 0 1 0s i l i con ind ia |12|J u l y 2 0 1 0

in

Two India-born Stanford gradu-ate students have created a$3.99 application in the iPad. It

is the top paid app in the entire iPadsection of the App Store. AkshayKothari (23) and Ankit Gupta (22) atthe Institute of Design of StanfordUniversity have developed the PulseReader app in the iPad. Pulse is a clean and visual news

aggregator and the reader takes up to20 news sources that can be followedand a visual mosaic of the news can becreated. The article can be tapped anda clean rendered view of the newsstory can be presented. The app allowsusers to see text-only versions of arti-

c l e s ,which arebasicallycleaned-up versions of a news site’sRSS feeds, or to see the full articles asthey are presented on the Web. It alsolets sharing articles through Twitterand Facebook by passing the individ-ual sharing tools presented by eachnews site.Kothari says that the project was

inspired by ‘a personal frustration atthe whole news reading experience’ onmobile devices. The stylish and easyto use news aggregator service was de-veloped in the Launch Pad class,where the budding entrepreneurs are

given an opportunity to de-velop and introduce a prod-uct in just ten weeks.News organizations are

yet to get accustomed toiPad strategies but are quitehopeful about the success ofPulse. “You absolutely donot have to give away some-thing great for free. If youbuild something great, peo-

ple will pay you for it,” says MichaelDearing, a former eBay Executivewho is a teacher of the Launch Padclass. Nearly 15,000 people have down-

loaded this app and it has generatedmore than $40,000 in revenue, takinginto account Apple’s 30 percent cut.Akshay and Ankit have created a com-pany, Alphonso Labs, and are nowworking on versions of the app forother devices, as well as talking to po-tential investors.

TTwwoo IInnddiiaann SSttuuddeennttssDDeevveelloopp TToopp PPaaiiddAAppppllee AAppppss

Though India has been criticizedfor its high emission levels,around 30 percent companies in

India monitor their carbon footprint,states a recent survey by workplace so-

lutions provider Regus. Majority of In-dian companies feel tax incentivesfrom the government are required toaccelerate adoption of energy-efficientbusiness practices.“A majority 85 percent of com-

panies said if the government of-fered tax incentives to invest inenergy-efficient or low-carbonequipment, businesses would signif-icantly accelerate their green invest-ments,” the report stated. Globally,only 37 percent of companies actu-ally measure their emissions andless than a fifth of companies (19percent) measure the carbon foot-print left by their activities.Small companies across the

world, however, are well below thisaverage in their actual and predictedlevel of green investment, indicatingsmaller businesses are harder pressedto select low-carbon equipment whenthis comes at marginally higherprice. In India, only 25 percent ofsmall firms monitor their carbonfootprint compared to 45 percent oflarge businesses, the survey noted.“Adoption of green equipment

and monitoring initiatives is still dis-appointingly low, particularly forsmaller companies. Yet small andmedium-sized companies account forhalf of any country’s businessturnover,” said Madhusudan Thakur,VP, Regus India Regional. si

MMoosstt IInnddiiaann ffiirrmmss ddeessiirree ttaaxx ssooppssffoorr ggrreeeenn iinnvveessttmmeennttss:: SSuurrvveeyy

Akshay Kothari & Ankit Gupta

$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $

Ajay Sravanapudifounded Lucid-Media has re-

cently raised $4.5 millionin funding, led by MMVFinancial (MMV). Thisfunding follows the in-vestment in December2008 from institutionaland individual investorsincluding Lake Street Capital andRedleaf Group, bringing the total fund-ing to $13.3 million.Founded in 1999, the Virginia

headquartered company categorizestraffic from many of the Web’s mostrespected networks and exchanges,providing advertisers with a way tomore effectively target online advertis-ing inventory and increase their return-

on-spend through its patentClickSense. The companyplans to use the funds to ex-pand its recently launchedself-service DSP platform,which enables agencies andadvertisers manage theironline advertising cam-paigns. The DSP leveragesLucidMedia’s patented

contextual targeting technologies toprovide more than 14,000 categoriesalong with page-level transparency andmultiple layers of filtering to protectbranded advertisers from inappropriatecontent. With many networks now reposi-

tioning as demand-side platforms, thecompetition has increased but the teamat LucidMedia is not perturbed. When

it comes to real solutions where onecan log into and traffic a campaign ef-fectively there are not many players.The field is narrower than all the mar-keting hype implies, says Sravanapudi,Founder and CEO, LucidMedia.Online advertising is a $30 billion

business globally. Since users are mov-ing away from fixed, premium place-ments to realtime bid inventory acrossthe many exchange aggregators, thedemand-side advertising platforms arethe wave of the future as their valua-tions are strong. “We hold a strongfoothold in the DSP space and have a10 year track record of success, whichmakes us appealing to the VC commu-nity,” says Sravanapudi. LucidMediatoday is 30 people strong with officesin New York as well.

LucidMedia Raises $ 4.5 Million

Diaz Nesamoney founded onlinevideo advertising firm Jivox, hasraised $4 million in the follow-

on investment round from Opus Capitaland Helion Venture Partners. With thislatest round of funding, Jivox has raised$15 million till date.This new round of funding would be

used for promoting the brand and ven-turing into Chennai markets. Californiabased Jivox is a provider of interactivevideo ad technology that enables busi-nesses to reach new customers online.Many of the large media companies andadvertisers are using the Jivox platformto create and distribute interactive videoads and manage their ad operations moreeffectively. Currently, Jivox is aggressive on tap-

ping India’s growing online advertisingmarket which is estimated at around$300 million, with the video componentestimated at just $30 million. “ In India,

while a sizable part of the newadvertising money was cominginto online video, the advertisingmarket still remained ripe forprint especially in the vernacularindustry,” Diaz Nesamoney,President & CEO, Jivox.The three-year-old firm

Jivox offers advanced ad cre-ation tools and targeted distribu-tion through its network of over1,000 media and content websites, aswell as through directory listings, viralmarketing programs, email campaigns,social networks and more. Jivox alsoprovides sophisticated analytics thatdrive continuous campaign improve-ment, including a unique “video engage-ment score” that gives advertisersimmediate insight into campaign per-formance. “At the moment, the plan is tolook at funding in the first quarter of2011. We could look at a figure similar

to what we have alreadyraised depending on howwe chart our expansion,”says Nesamoney.The com-pany has an employee baseof 45 people.

Jivox works with mostof the top brands in the au-tomobile, financial services,electronics, travel & leisureand entertainment sectors in

India. The company’s India operationsare handled by Naren Nachiappan, whois the Managing Director at Jivox India.The firm’s revenue model works on feeper impression. It books spots on most ofthe top online publishers in India, andalso in the U.S., and works on revenuesharing basis in some cases. The Globalonline video advertising is $1 billionmarket and expected to grow at 20 to 25percent and Jivox is trying to make amark in this market. si

Jivox raises $4 Million

Diaz Nesamoney

Ajay Sravanapudi

s i l i con ind ia |15|J u l y 2 0 1 0s i l i con ind ia |14|J u l y 2 0 1 0

Cost reduction dominated themind space of outsourcingcompanies in the last

decade. India is past that stage,when we could provide basic costadvantage to service our clients. Inour conversations with clients, theover-arching theme is around usingBPO not just as a survival tool butalso one that serves as an engine forgrowth. It’s about helping compa-nies weather the storm by reducingtheir cost structure rapidly andusing these cost savings and effi-ciency improvements to set a foun-dation for fueling their growth asthe economy starts to recover; trulypartnering with the client to drivecompetitive advantage. The cus-tomers now demand that serviceproviders come with game chang-ing ideas that ensure revenue conti-nuity and winning overcompetition.

The scope of outsourcing toohas widened beyond belief. There isa high level of activity in financeand accounting across all indus-tries, a lot of new companies arewilling to outsource for the firsttime, especially in the F&A space.There is also significant activity inthe CPG, logistics, and media andentertainment industries. New in-dustries like retail are now open to

outsourcing.But the BPO industry still re-

mains highly under-penetrated. Ac-cording to the latest Nasscomreports, the addressable BPO mar-ket is estimated at $180-220 billion,of which offshore was just $29 bil-lion. So the head-room to grow istremendous. For this, client focus isgoing to be the paramount require-ment and offering customized solu-tions will be the way forward tobridge this gap. This may meanproviding onshore, near shore, andoffshore services to clients that aregoing global. One of the biggest challenges

Indian BPOs will face in the futureis a crunch of employable talent. Ofthe 4 to 5 million students thatgraduate each year, the industry isable to employ only about 10 per-cent. That causes the crunch. Theindustry and the government needto worry about the un-employabil-ity of the remaining 90 percent. Itis important that we, the industryleaders, take measures along withthe government to build strong ed-ucation programs specific for thisindustry across India including intier-2 and tier-3 cities. si

Current client demands make itpertinent for every BPO ven-dor to align with the clients to

create better value and such ap-proaches have popularized the con-cepts like transformationaloutsourcing. It is the capability acquired by a

BPO after servicing multiple clients inthe different space that allows the firmsto study the different experiences andmake them capable enough to drawout operational efficiencies, and en-hance them via usage of technology. Thus, it ensures flexible and adap-

tive business architecture. The compa-nies acquire intelligence via workingon the clients’ processes and use thelearning to service the client organiza-tion in a much effective way. Theusage of business intelligence in theBPO firms has increased as there arecompetitive pressures to deliver effec-tive results. The cost consciousness dawned on

firms during the recession has madeevery client demand additional cost ad-vantage in services, resulting in costoptimization pressures in the vendors.The challenge lies in providing serviceat the same or better level at a reducedcost. So, the industry has to scout newtechnology advances that will helpthem to constantly optimize their cost.Also, the political and economic com-pulsions are forcing the IT vendors toseriously consider stronger globaliza-tion and they are continuously settingup hubs in U.S., UK and Europe.Companies are increasingly forayinginto different countries to get close tothe clients, and in return have readilyincreased job opportunities across the

globe. However, in terms of optimiz-ing their cost or scouting for certainniche capabilities like efficiency in aparticular language, the companieshave renewed their interest in emerg-ing markets like Africa, China, andLatin America. It gives a boost to their onshore-

offshore blended delivery. With theirpresence well-balanced, the outsourc-ing industry tends to constantly evalu-ate opportunities to innovate. Thus, bystaying closer to the clients, the com-panies can churn out different solutionsamidst turbulences like the current Eu-ropean crisis or the recession.Especially for new entrepreneurs,

the competitive advantage lies in inno-vating to make their business processesmore efficient through the cloud andPAAS. Also, with the regular issues ofinvestments haunting them every time,collaboration has come to play a bigrole in successfully sustaining the busi-ness. The collaboration of differentprocesses within the organization orcollaboration of different services be-tween organizations deliver comple-mentary processes is important.

BPO Vendors Alignwith Clients ViaRight Shore GlobalDelivery

Nitin Pangam is the CEO of Maeflower Consulting, a consultingfirm specializing in Demand generation & FDI Investor targetingfor Economic development of clients.He is also the Director of QEDbaton,an Integrated Demand generationcompany, catering to the business development needs of ISV’s, IT services companies and BPOs.

Keshav Murugesh, CEO, WNS. Thecompany is a leading player in busi-ness process outsourcing.

One of the hardest hit industrieslike many others during reces-sion, the BPO sector is now

witnessing a gradual upturn. Timeshave changed and so have the demands.While in the past BPOs were looked atas a separate service when compared toIT, today the IT and ITeS services areoften coupled together as a single sec-tor. Thus organizations like ours (Cal-iber Point & Hexaware), which have ablend of these services, provide a win-ning combination to customers. Somecompanies like ours are now bringing athird element to this service combina-tion - analytics. It is one of the ways tomove up in the value chain while pro-viding value to customers. With tech-nology trends like cloud computing,software-as-a-service (SaaS), and plat-form-as-a-service (PaaS) coming intothe market, customers want their ven-dors to be capable of delivering an over-all solution.With the outsourcing industry ma-

turing, customer expectations also haveundergone a transition. Previously,value-addition was synonymous with

specialized offerings complemented byadd-ons like six-sigma and otherprocess improvement capabilities. Now,customers expect comprehensive capa-bility on the part of service providersand the ability to help them to be the in-dustry benchmark, in addition to in-creasing efficiency at functional levels.Moreover, customers are increasinglylooking at on-shore and near-shore de-livery capability of service providers, inaddition to offshoring. On a different note, a noticeable

fact now is the lucrative prospect thatthe domestic market holds for theBPO sector. Domestic market is ex-ploding in a big way with BFSI, tele-com, government, and public sectorbecoming major consumers of IT en-abled services.

These developments have thus re-sulted in a change in the operatingmodel of BPOs. Increasing demandshave forced large players to partner withsmaller firms and collaborate with themto provide services to their customers.Hence, the environment beckons co-ex-istence than competition. These devel-opments will also result in thede-concentration of industries. TheBPO sector will no longer be a businessconcentrating on only tier-1 cities, butwill trickle down further. The oncom-ing years will witness the spread ofBPO related activities into these lesserknown areas.

Effective End-to-End Service DeliveryCapability is the Mantra TodayCaliber Point is the independent BPO arm of Hexaware Tech-nologies Limited, a leading global IT & BPO services company.By R U Srinivas, CEO, Caliber Point

By Nitin Pangam, CEO, Maeflower Consulting

By Keshav Murugesh, CEO, WNS

R U SRinivaS

nitin PangaM

KeShav MURUgeSh

DDeemmaanndd ffoorr GGaammeeCChhaannggiinngg IIddeeaass

Service providers are expected to have compre-hensive capability and tohelp organizations to bethe industry benchmark

The over-archingtheme is around usingBPO not just as a sur-vival tool but also onethat will serve as an en-gine for growth

CEO SPOTLIGHT

Niche

s i l i con ind ia |17|J u l y 2 0 1 0

The last three years, had been testing times forthe IT industry across the world. While largecorporations hardly grew by 10 percent, themid tier companies were on a decline. How-ever, there is one among the few companies

that managed to change the script – Infinite ComputerSolutions, posted a growth of close to 35 - 40 percent; afeat rarely accomplished.Founded by Sanjay Govil in 1999, the Bangalore

headquartered company is one among the many mid-tierIT service providers in application development andmaintenance, testing, infrastructure management and in-tellectual property (IP) leveraged solutions. But what setsit apart in the vast pool of players? Upinder Zutshi, CEO,Infinite, is quick to answer, “A healthy mix of Fortune100 and mid level organizations as customers coupledwith IP based solutions in niche services areas acrosslarge number of verticals.”

ScriptingIT Services

Market

Infinite

Upinder Zutshi

in By Christo Jacob & Vimali Swamy

FFaasstt FFaaccttssFounded

1999 Founder & Chairman

Sanjay GovilManaging Director

Upinder ZutshiHeadquartersBangalore, India

Revenu$140.9 Million

Headcount3800 (as of June 2010)

VerticalIT servicesWebsite

www.infinite.com

COVER STORY

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The recession has been a keydriver in helping us reach this stagesays Zutshi. While IT outsourcing ispart of ‘business as usual’ CIO strate-gies in the aftermath of the recession,most technology leaders are paying“far more attention” to what they aregetting fortheir money.Hence, CIOsof Fortunecompanies areunder pres-sure to strike abalance be-tween innova-tion andt r a n s f o r m a t i o nthereby putting pressurefor IT services company.“Today quite a lot ofcompanies have startedengaging with mid tiercompanies as they arelooking at right mix intheir vendor list, provided they havea good track record. Infinite is rightlypositioned to serve this market,” saysZutshi. Today, Infinite has emerged as the

alternative mid size provider of Ap-plication Management outsourcing(AMS), Infrastructure ManagementServices (IMS) and Intellectual prop-erty leveraged solutions (IP) for sev-eral large clients in telecom, media,energy, manufacturing and healthcareverticals.

Businesses GaloreBeing a mid-level services company,Infinite has its presence in multiplesectors providing a myriad of serv-ices, but Zutshi is sharp to realize thathaving competence in niche areas isthe way to go in the long run. Hence,Infinite is focusing strongly on mul-tiple service lines like AMS, IMS andIP leveraged solutions. Having traditionally started as an

AMS shop, the company today takescare of development, management

and maintenance of IT applicationsfor its clients. Infinite provides vari-ous levels of support and enhance-ment ranging from handling initialservice desk queries and correctingapplication errors, to preventivemaintenance, for both packaged andcustom application systems. “WhileAMS continues to be our bread andbutter, currently IMS is our keyfocus, as we have traditionalstrengths in this area.” says Zutshi.IMS represents a massive $126

billion market—virtually untappedby Indian players. While this marketis still a tough one to crack and re-mains dominated by global giants —the likes of IBM, EDS and CSC—In-finite sees itself competing with pure-play Indian software services biggies

by leveragingits offshoreexpertise. Most For-

tune compa-nies arereluctant tohand overcontrol of

their networks tooutsiders. Also, un-like application de-v e l o p m e n t ,infrastructure man-agement is a criticalissue where even min-utes of downtime cancripple a client’s busi-

ness. The ideal route would be tostart with an onsite model and thenmove the services offshore, as isdone in the software services indus-try. However, Infinite has taken thisroute years back and this has givenconfidence to its customers. Today, Infinite’s IMS business is

gaining momentum and this yearIMS brings in close to 16 percent ofthe overall revenue. One of themajor reasons is its strong traditionalcapabilities in IMS like supportingthe back end like servers, switches,routers, applications and managingthem remotely. Infinite has a threeyear alliance with iYogi, to setup andmanage service desk operations andalso provides L1, L2, L3 support foriYogi’s clients across the U.S,Canada, United Kingdom, Australiaand other geographies in the future.This business is expected to scalebetween 500 to a 1000 employeesfor Infinite over next 12 months.This comes in as a catalyst for Infi-nite to get more big deals and look

A step ahead of othersZutshi believes that to exist in acompetitive market as that of ITservices, one has to build long last-ing partnerships, to make every as-sociation mutually profitable,rewarding and enjoyable, thus en-hancing the scope of engagementsby expanding the breadth of serv-ices, cross-selling opportunities, de-livering end-to-end solutions andaddressing new areas within clients’organization. While, disruptive in-novations, especially, in the areas oftechnology, revenue and deliverymodels have created a level playingopportunity for players globally; areflection of strong understanding ofthe business, customer centricity,and desire to constantly innovate anddo all this with simplicity and trust,has been Infinite’s edge. Throughstrategic and truly collaborative re-lationships with top technologyproviders, Infinite brings its businessinsight, accelerated methods andgreater convenience to customers.

The company’s global deliverymodel and offshore transitionmethodologies ensure that cus-tomers enjoy all the benefits of off-loading work offshore. It works witha variety of engagement models, andrecommends the one most suited tothe customer’s specific needs. “Ourstaff is highly skilled and has sig-nificant experience overseeinglarge-scale Application Manage-ment Outsourcing engagements forGlobal 1000 companies. We employa scalable staffing approach as wellas a 24x7 virtual workday model tomeet the specific needs of eachclient,” says Zutshi.

The engagement model also of-fers flexibility in terms of tailoringthese models to suit customer’sbusiness requirements. The valueproposition in these models is builtaround the theme ‘cost effective,faster and better’. Further, Infinite’sGlobal Delivery Framework cou-pled with the three-tiered deliveryapproach comprising on-site, off-site and offshore delivery optionscomplemented with the wide rangeof flexible engagement models pro-vides clients the flexibility in termsof engagement with access to best ofthe processes, methodologies, toolsand resources across various globallocations. This framework focuseson bringing in processes, efficien-cies and productivity tools to en-hance revenue productivity anddeliver time and cost efficiencies.The Technology and SolutionsFramework is integrated with Infi-nite’s engagement and Global De-livery model, to ensure effective andefficient delivery execution. The en-

gagement models start with onsitemanaged projects and extend up toIP leveraged, revenue sharingmodel. “We are testing out new business

models that could be crucial to fu-ture growth and profitability. In a re-set world post the recession, oldequations of more people equallingmore revenues may no longer holdtrue,” says Zutshi. The company, for instance, has

entered into a 10 year strategic al-liance with Motorola to develop andsupport its software enabled mes-saging products — SMS and MMS.Infinite will acquire a non-transfer-

able, royalty bearing worldwide li-cense to Motorola’s messagingproduct solutions. It will now de-velop an application product thatwill be sold as a licensed implemen-tation back to Motorola, its clients,and third parties. While the IP of thelicensed messaging product will re-main with Motorola, Infinite will re-tain rights to the IP of all add-onsoftware that it develops.

“Our sustainable engagementswith clients using innovative risk-re-ward, revenue-sharing models, acquir-ing proven revenue generating IP orcreating our own, together with ourimproved value offerings allow ourcustomers to better align their R&Dspend, extend flexible multi vendorproduct portfolios to their end clients,with reduced risks,” Zutshi adds. The strategy has worked well.

Today the company is witnessinggrowth, from $85 million revenue in2008 to $140.9 million in 2010, out ofwhich 90 percent of the revenue shareis from top 10 customers which areFortune 100 companies.

REVENUE*

85

106.8

140.9

0

20

40

60

80

100

120

140

160

FY 08 FY 09 FY 10*

Growth 32%

Growth 26%

Number in USD Mn*

Infinite made significant progress by acquiring customer IP in exchange for a revenue share

model and their own investment in IP creation.

In a re-set worldpost the recession,old equations ofmore peopleequalling morerevenues may nolonger hold true

into a ‘great’ place to work. Ourglobal headcount as of now is about3800 employees and contractors puttogether, with attrition rate waybelow industry average at 8.67 per-cent, thus strengthening our commit-ment to service,” explains Zutshi.

The Vision AheadWith Indian IT industry pegged togrow significantly year on year andoff-shoring increasingly being ac-cepted, with large global corpora-tions consolidating and reviewingtheir vendor list, putting higher em-phasis on specialization, flexibility,agility & focus, with growth in R&Dand IMS Services, the market looksinteresting and challenging too. ‘‘In past, several mid-tier compa-

nies have been high on spurge ofgrowth but have become dormantafter crossing a certain revenue mark.Our strategy for long term growth issimple. We are looking at engagingwith at least 10-20 Fortune 100 com-panies for a long term business rela-tionship and the rest with mid-sizedclients. This will ensure that there isconstant source of revenue in toughtimes while we constantly scout formore business,” explains Zutshi.The latest landmark in Infinite’s

journey so far, has been its IPO early

this year in India. Zutshi believes thatbeing a publicly listed companybrings in additional advantages andat the same time pressures of moreexpectations of the shareholders- thenew owners of the company.

As the world-wide industrymoves ahead after the recession andthe outlook for growth of the IndianIT industry looks strong, Infinite iswell positioned to grow ahead of theindustry average. Infinite today hasestablished its presence in most ofthe large Telecom & IT Services mar-kets of the world with offices in theU.S. in multiple locations, as well as

in the U.K., India, Singapore,Malaysia and China, thus increasingits geographical footprint in an ag-gressive manner while bagging someof the leading global names as itsclients. Infinite has expanded its delivery

centers in India, including its sub-sidiaries; Infinite currently has fivedelivery centers in India – with twoin Bangalore, one each in Chennai,Gurgaon & Hyderabad. “Our Corpo-rate campus in India is housed inWhitefield, Bangalore in an area ofabout 4.48 acres. We have also beenallocated 4.87 acres of land in theSpecial Economic Zone (SEZ) in Hy-derabad for our plans to build a sec-ond campus,” Zutshi says. Having a legacy in telecom, Infi-

nite is now also geared to tap oppor-tunities in the emerging verticals likehealthcare, energy and utilities. Itsrecent win of the Uttarankhand R-APRDP project bears testimony of itsstrengths in the utilities vertical,where some of the leading Indian ITcompanies dominate. Moreover Zut-shi is confident that each of the threebusinesses of Infinite- AMS, IMSand IP leveraged solutions, will con-tribute about a third of the revenueby Fiscal 2014. As per the Nasscom study, the In-

dian IT industry is expected to beworth USD 225 billion. This also re-flects that this growth will bring inopportunities for mid-size playerslike Infinite, who have all the requi-sites in place.Infinite’s business model of focus

on areas which are unique and differ-entiated, has helped it grow its netprofit by $4.8 million in the quarterended March 31, 2010.With veterans at the helm and

committed associates and well satis-fied customers, Infinite is a trend set-ter for unique engagement model andniche in the IT services market, todefine the way global leaders engagewith vendors in India si

si l i con ind ia |21|J u l y 2 0 1 0s i l i con ind ia |20|J u l y 2 0 1 0

for acquisitions in this space tostrengthen its presence.Infinite has made significant

progress in moving its revenue base toIP based revenue sharing model. Thisshift is achieved via a combination ofacquiring customer IP in exchange fora revenue share model and their owninvestment in IP creation. “We are bundling our service of-

ferings to enhance customer time toservice initiation or significantly re-duce the operating costs,” says Zutshi.In this model the company takes own-ership of the customer IP under a li-censing agreement and provides fulllifecycle R&D support in exchange forrevenue share on the business. This al-lows the customers to better align theirR&D spend, reduce their risks and In-finite in exchange gets a more prof-itable business model. This also allowsthe company to increase its value of-fering for customers. The alliance withMotorola is an example of the new IPbased model. The company expectsthe share of revenue from this projectto be $20 million in fiscal 2010-11,while starting fiscal 2011-12 this is ex-pected to be upwards of $40 millionper year. However, as a large part ofthe revenue will be derived from thesale of Capacity Licenses, which isbased on growth of customers and themessaging usage in the future, the totaldeal value may be significantly differ-ent from the current forecast range.

Having established its compe-tence in the telecom services indus-try, Infinite is now eyeing the remoteinfrastructure management (RIM) inthe U.S, Europe and Indian markets.While currently it serves few keycustomers in RIM vertical in thesemarkets, the company is hoping to bea major player in this domain in thenear future, as companies in U.S. andEurope are moving from softwareoutsourcing to RIM outsourcing toIndia.

The Work CultureThe true testimonial of a company’sstrength lies in its employees and the

culture and value imbibed in them bythe organization. Zutshi beamsproudly when he talks about the com-pany’s work culture. The InfiniteDNA provides a non-hierarchicalopen work environment. “At Infinite,we are proud to offer employees aworkplace infused with positivity andlaced with a feeling of happiness. Webelieve that workplace celebration isan opportunity to relive accomplish-ments – both personal and profes-sional, providing a platform tocelebrate them is integral to our “In-finite Spirit” he says.Infinite’s employee recognition

program is a combination of both in-formal and formal acknowledgementof a person’s/teams’ performance, ef-forts or business results that supportthe organization’s goals and values,where often performance has beenbeyond expectations. Employeerecognition is therefore a potent com-munication at Infinite, with awardslike the Star Performers, Eagle of theYear, Best Project/ Best DepartmentAwards, Best Quality Person of theYear and many others. Celebration of success at Infinite

is not only about employee recogni-tion, but is also about building ahappy and fun-filled work culture. I-verve -Infinite’s Employees’ Clubrepresents the collective energy ofthe organization. Apart from infusingan element of fun and frolic in theCompany, I-verve also works to-wards social causes.Infinite’s other initiatives like I-

engage, are focused on conceptualiz-ing and organizing activities todeliver engaging and compellingcommunication for employees andthe community. This initiative facili-tates pro-active conversations be-tween the employees and theirmanagers, buddies and mentors. “Our focus on unique people

management initiatives has been en-viably electrifying and it’s been ourconstant endeavor to build Infinite

InorganicOrganic

• Grow our business fromexis�ng clients

• Increase focus on new markets by harnessing Global Client-base

• Focus new client acquisi�on strategy

• Use Dis!nc!ve Offerings to penetrate new clients

• Strengthen & harmonize our Core Capabili�es through Acquisi�ons

• Selec!vely Acquire Revenue Genera!ng Customer owned IP / Product

• Acquire Companies to gain complementary Skills / Revenue Genera!ng IP

People

• Con!nued Focus on Large Companies• Posi!on Infinite as the Alternate Service Provider• Differen!ated Business Models & Service Offerings

Infinite Vision, Mission & Values

Growth Strategy

Process

Technology

Infrastructure

Corporate Governance

Leadership Team

EngagementModels

Infinite Service Offerings

Service Offering

Applica#on Management | Infrastructure Management | Product & IP Leveraged Solu#ons

*AMS | PSD | V&V | PDS* Telecom | ITTelecom

OCMsTelecom

SPHealthcare

SPManufacturing

Units

Ver#cals Telecom | Media | Healthcare | Manufacturing | Energy & U#li#es

T&M | Managed T&M | Fixed Bid | Revenue Sharing

ServiceModels Shared Services | Offshore Factory | DDC | BOT

* AMS – Application Management Service | * PAS – Packaged Application Service | IV&V – Independent Verification & Validation | *PDS - Product Development Services

Our global delivery modeland offshore transition

methodologiesensure that customers arebenefited by off-loading workoffshore

Celebration of success at Infiniteis not only aboutemployee

recognition, butalso building ahappy and fun-filled work culture

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Aspontaneous answer tothis question wouldread “those that wouldgenerate returns thatwould keep us smil-

ing”. Deeper thought suggests thatwould not be a root cause, but merelya symptom. Therefore, if the ques-tion were to be broad-brushed, theanswer would be – “We would liketo invest in ideas that change the waywe live our lives today”. If this hap-pens, other things follow.How do we therefore determine

if an idea has the potential to changethe way the world lives today? If wedo not wish to play Nostradamus, theonly way to answer that is by evalu-ating the enablers that enhance theprobability of success of an idea. The enablers we constantly ex-

plore when we analyze the multitude

of start-ups that we encounter are theteam, a compelling value propositionwith the ability to scale and the “ex-ecution-ability”. When we comeacross start-ups, we often wish thatwe could pick different componentsfrom different companies and putthem together to combust – We oftenwish we had the luxury that the se-lectors of a World XI have- putting aSachin Tendulkar with a WasimAkram in the same team. Add ShaneWarne to the mix, and they merethought of the combination is heady

The TeamWe also often wish that we couldmerge teams as well. Most often, itis to put together a great set of tech-nologists with a group talented inmarketing and organization buildingskills.

We come across young teams aswell as seasoned professionals,sometimes with prior entrepreneur-ial experience. While we love theyoung teams because they oftenhave the ability to fail, and have theresilience, flexibility and time topick themselves up and give it an-other shot, the seasoned profession-als are often preferred for more thana reason. In youth, it is the norm tobe hungry. Hunger in a seasonedprofessional is rarer and temperedwith wisdom. The prior success ofthese professionals also often meansthat their aspirations are on a farbigger scale.

A compelling value propositionwith the ability to scaleThe value proposition is often re-flected in the idea. The crux of itusually lies in the business model. Isyour venture, for example, buildingwater purifiers and selling them, oris it creating a solution that will sup-ply water to a city if it fails to rainfor a year. The scale and complexityof the problem and the uniquenessof the solution combine to provide acompelling value proposition. Ideas which are great candidates

for funding also those that will seedother businesses. Take for instanceApple’s I-store or Twitter. The num-ber of applications and businessesdeveloped by third parties that havesprung to life on account of theseare testimony to the power of theseofferings.

We are also still searching forthat elusive B2C model that wouldpropel India on to the world map.The reason is simple - B2C is typi-cally synonymous with scale.

Execution-abilityThe execution-ability of an idea iscontingent on several factors includ-ing the ability of the team to executein as much as whether the businessenvironment will allow the idea toflourish e.g telemedicine with a ruralfocus cannot be an executable propo-sition until the telecommunicationand end device ecosystem in ruralareas is developed. Many a greattechnology has failed to be mone-

tized successfully. The gap betweena great idea and a commercial suc-cess is a wide chasm, bridged by theability to execute. It is the successful confluence of

the above enablers that brings an ideato success and if even one of these isoutstanding, the idea could eventu-ally be a gamechanger. We thereforeinvest, not merely in the idea, but inthe potency of these enablers.The India Innovation Fund is, of

course, governed by a mandate. Inline with the areas in which the pro-moters of the fund viz. NASSCOMand IKP Knowledge Park operate in,ideas in the ICT and the Healthcarespaces are where we see ourselvesequipped with the ability to providevalue to an entrepreneur. Further,while in most cases, a funds fiduci-ary responsibility is to its investors,we carry the additional expectationsof our promoters – a strategic role to-wards the development of the ecosys-tem. Ideas that we would like tofund, would therefore revolve aroundthe development or advancement oftechnology and hence, creation of in-tellectual property.“Imagination is more important

than knowledge”. What Albert Ein-stein stated in the early 19th Centuryholds true to the day. The power ofimagination must however not beviewed in a limited sense, to a greatidea alone, but also, to its applicationtowards the execution. It is the potentcombination of a technology ideawith an imaginative business model- and a top class team to deliver - thatwill rule the day. si

ideas Start-up

We Would Like

Fundto

VVCC TTaallkk:: By Ashwin RaghuramanThe author is Vice President, India Innovation Fund

The crux of it usually lies in thebusiness model. Isyour venture, forexample, buildingwater purifiers andselling them, or is

it creating a solution that willsupply water to acity if it fails torain for a year.

The gap between a great idea anda commercial success is a widechasm, bridged by the ability to execute.

Many a greattechnology hasfailed to bemonetized successfully

"The Secret Life of Teens", asurvey by Harris Interactiveon the online behavior ofAmerican teens shows that69 percent of 13-17 year

olds have updated their sta-tus on social networkingsites. 28 percent of teens,especially girls, chat withpeople they don't know. Thesurvey, released by McAfeesays that 14 percent of teensadmit to having engaged insome form of cyberbullyingbehavior in 2010. 16 per-cent of 16-17 year old boyshave downloaded x-rated

content.

If the year that went by was tough, then the BPO sector is surelya witness to it. Of all the industries, the BPO sector was per-haps the most affected, especially those in the BFSI sector. Butas is often said, “Every dark cloud has a silver lining;” the sameis true of the BPO industry as well. As the economy grows, the

future seems to have something else in waiting. A recent study by Nasscom states that the BPO addressable mar-

ket will be larger than IT by 2020. The market is likely to grow insize from $200 billion in 2010 to $ 980 billion in the next decade. What is more interesting is that 80 per cent of the incremental

growth is predicted to be driven by opportunities outside the currentcore markets, verticals, and customer segments. Traditionally, the U.S. and the UK have been the strongest markets

for BPO since its evolution and they continue to be so. But what haschanged is the business outlook. In the past few years the BPO sec-tor has undergone a tremendous change in outlook. From a supply-side definition, today it has become outcome-oriented, where the

payers now need to provide end-to-end processes and solutions thatwould boost revenues for customers.Large market segments and buy-

ers are now not increasingly lookingat BPO in synonym with IT, wheretheir only concern is business out-come and effectiveness. Hence, it isno wonder the BPOs are now re-ferred to as IT-enabled services. “As the market continues to fluc-

tuate due to incomplete recovery, or-ganizations across industries haverealized that they cannot continuedoing what they did in the past,”says Peter Bendor-Samuel, CEO ofEverest Group. They are looking atpartners in their vendors.With the clouds just clearing

over the U.S. economy, the Europemarket is currently undergoing aslump. Europe accounts for about 30percent of the IT industry’s revenue,with UK contributing 18 percentand the rest of continental Europe12 percent. The debt-hit countrieslike Greece, Hungary, Portugal, andSpain contribute a very small per-centage to the overall revenue of theIndian IT industry. But most IndianBPO companies are optimistic aboutthe euro zone crisis being an oppor-tunity to deliver high-value work atlow costs. With cost being an important

factor, organizations are looking atend-to-end capabilities from theirvendors. Emerging utility deliverymodels such as SaaS, PaaS, andcloud computing will lead the eco-nomic recovery and most organiza-tions are making investments inutilities that are based on industrial-ization, rather than resource-inten-sive models. “A combination ofresource-intensive and industrial-ized approaches will prove success-ful in Europe,” says Ian Marriott,Vice-President – Research, Gartner.According to Nasscom, the in-

dustry is moving towards BPO 3.0,which means value enhanced end-

to-end solutions, shared vision withcustomers on driving transforma-tion, and enterprise-wide cost effi-ciency. “BPO 1.0 was built uponcost efficiencies and productivity,and BPO 2.0 focused on greaterbreadth and depth while embracingthe globalization of delivery capac-ity,” says Som Mittal, President,Nasscom.

Business models have also shiftedfrom being cost-oriented to revenuemodels. Customers are looking atoutcome-based engagements, and ‘ef-fective solutions’ is tomorrow’smantra.With such transformations hap-

pening, being just a BPO companywould not suffice. In times like thisthe fort would be primarily held bycompanies with both technology andBPO services. Despite existing markets in the

U.S. and the UK, analysts feel thatemerging markets hold a promisingfuture for BPOs, where there is a needto cater to new sectors. New sectors such as healthcare,

new markets like BRIC (Brazil, Rus-sia, India, and China), Japan, and Ger-many, and new service lines (processtransformation for productivity im-provement) are where the opportuni-ties lie. The domestic market is another

large driver for the BPO industry inIndia. The domestic market is explod-ing in a big way and there is a pool of

opportunities in BFSI, telecom, gov-ernment, and the public sector, whichis going to be a big consumer of IT-en-abled services. Highlighting some of the trends,

Mittal says that the industry is wit-nessing a balanced regional growthwith 16 percent of BPO revenues com-ing from tier-2 and tier-3 cities inFY10, and over 5,000 people em-

ployed in rural BPOs. TheBPO industry has con-tributed to the creation of4.5 million jobs and alsohelped in empowermentof the youth. 50 percent ofemployees are below 25years of age and womenconstitute 45 percent of allemployees and 50 percentof new entrants. 63 per-cent of companies employthe differently abled. The Nasscom study

that was co-authored by McKinseyIndia adds that the current economicslowdown is a path to revival for BPOcompanies. “In a sense, the slowdownhas given them a chance to get theircosts back in line. Companies need tomove up the value chain and go intonon-traditional areas such as telecomand the government which have a lotof opportunities,” he adds. The study says that the total ad-

dressable market for the BPO indus-try is $630 billion. To achieve this, theindustry will have to gear up for mul-tiple challenges, especially for com-petition from other countries such asChina, Vietnam, Brazil, and Egypt,among others.The exports revenues is expected

to expand more than four fold andreach $50 billion by 2020, while thegrowth in domestic revenues is ex-pected to expand seven fold to reach$15-17 billion during the sametime. What remains to be seen is howfar the Indian BPO industry would beable to prove its mettle in the promis-ing future. si

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a Silver Liningahead?

indian BPOindUStRy

BBuussiinneessss:: By Vimali Swamy

as the market continues tofluctuate due to incompleterecovery, organizationsacross industries have realized that they cannotcontinue doing what theydid in the past

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The Indian domestic market is goingthrough a crucial transformationaljuncture over the last few years –rising from a ‘good to have pres-ence’ to a ‘high potential opportu-

nity’ for the country’s IT-BPO sector. Until a fewyears back, the domestic business opportunitiesdid not even figure on the agenda of Indian ITEScompanies. However, recession in the U.S. econ-omy and the domestic IT/ITES sector’s re-silience helped the market to earn a respectableposition in the strategy roadmap of IT/ITES

service providers. Ata time when compa-nies are developingstrategies to tap the

missed opportunities inthe domestic sector,

the market is witnessing intense interest fromcustomers as well as outsourcing servicesproviders that are not only based out of India,but are also players at a global level.The key factors which will continue to fuel thegrowth of Indian BPO market are:� According to IMF forecast, the Indian econ-

omy will continue to register a healthy GDPgrowth of over eight percent for the nextfive years. To keep pace with such an expo-nential GDP growth across the economy, theIndian companies need to concentrate their

focus on their core competencies whileleaving IT/ITES in the hands of third partyIT service providers.

� Another key reason driving the growth isthe increasing globalization. The Indian en-terprises are pursuing their dream to getglobal; as these companies intend to expandtheir presence across the world, they willneed to inherit the global best practiceswhere the ITES services will come handyfor them.

� The number of service providers havingend-to-end capabilities to provide outsourc-ing services has increased over the years.This growing number of vendors, alongwith increasing maturity of Indian enter-prises towards benefits of availing out-sourcing services, will act as a catalyst forthe growth of the domestic IT market.� A steep decline in the connectivitycosts is gradually building new busi-ness models that will be able to meetthe rising customer demands and theservice level agreements.The domestic BPO opportunity is

scattered into a number of verticals;whilst telecom and banking were the early

adopters, currently constituting over60 percent of the total pie, some otheremerging verticals include govern-ment, aviation, healthcare, retail,transportation and logistics, andmedia.From a service line perspective,

the domestic BPO market is followingthe same curve as that of BPO exportmarket to move up the value chain.The service lines are evolving frombeing predominantly voice based to amix of voice and non-voice services.Moving forward, in the next 2 to 3years, opportunities will not only belimited to back office process aug-mentation, but will also be extendingto processes through which enter-prises will be able to reap the benefitsof economies of scale along with asingle window view of all processesacross locations and business units.However, the challenges that remainare insufficient processes and stan-dardization approach within thebuyer’s organization. Also, fear of los-ing control continues to be an in-hibitor for the next generation growthof the domestic BPO market.According to Springboard Re-

search, the Indian domestic BPO mar-ket was estimated to be $2.6 billion in2009 and is expected to be a $5.8 bil-lion industry at the end of calendaryear 2010, registering a faster growthrate than the export market. Currently,close to 75 percent of the industry iscaptive in nature while the remaining25 percent is with the third party BPOservice provider. As the industry ma-tures, the Indian domestic market iswitnessing increasing consolidationactivities for the past few years. Afterthe economic downturn, many com-panies are wary about continuing withtheir captive center operations in Indiaand thereby started to pull out theirwell-established captive BPO invest-ments. Over the last couple of yearsseveral large captive centers, includ-ing Deutsche Bank, Citigroup, andmore recently UBS, have pulled out

of their BPO business. Despite thefact that cost structures of captives aretypically higher when compared tothird party service providers, there arecertain benefits like protecting confi-dential information in-house. How-ever, the domestic third party BPOcompanies are using this opportunity

to acquire captive centers to buildscale and for acquiring new technolo-gies, particularly to increase geo-graphic reach as well as to inherit newcapabilities.The key challenges for the domes-

tic BPO market are almost similar tothose in the export segment. They in-clude rising operating cost, lack ofskilled man power, and absence of anindustry ready curriculum along withhigh attrition rates. To address thesechallenges, the companies are ex-

panding their horizons beyond tradi-tional metro cities. This provides en-terprises with ways and means to availmultilingual skills as well as takingadvantage of lower cost of operationslike rents and salaries. However, thisis not an easy task as massive public-private partnerships in education and

training is needed to re-duce the gaps in the skilllevels in the tier-2 andtier-3 cities. This has re-sulted in the emergenceof rural BPO model,which was well receivedamong the vendors. Inaddition to overcomingthe language barrier, this

model has also helped to reduce costof operations and managing the attri-tion rates.Going ahead, adopting the right

business model will determine thesuccess of individual vendors in themarketplace. Trends like ‘movingfrom CAPEX to an OPEX based ap-proach’ will get traction in the mar-ketplace, as clients will necessarilypay only for usage and will not haveto worry about payment for licenses.Various other business models like‘transaction based’ or ‘outcomebased’ are emerging in the overallecosystem. All these models areplaying a vital role in expanding themarket as well as becoming a strate-gic ploy in the Indian outsourcingbusiness.With maturity of the domestic

market, the customers’ requirementsare changing very fast and vendorswill need a great degree of customiza-tion and understanding to be success-ful in this front. They will need tothink ahead of the curve on businessmodels, pricing, and have to build incapabilities that cater to the Indianmarket. Profitability is the other area,which will be determined on the ven-dors’ effectiveness in delivering byway of cost structure, people manage-ment, and value creation. si

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BBPPOOss hhaavvee aa ggrreeaatt ssccooppee ooff ffuuttuurreeggrroowwtthh aass tthhee IInnddiiaann eeccoonnoommyy wwiillllccoonnttiinnuuee ttoo rreeggiisstteerr aa hheeaalltthhyy GGDDPPggrroowwtthh ooff oovveerr 88 ppeerrcceenntt ffoorr tthheenneexxtt 55 yyeeaarrss

BBuussiinneessss:: By Sudip SahaThe author is Senior Analyst, Springboard Research

Software as a Service (SaaS)would have a role in the future of IT but not a dominant one as was

thought earlier, accordingto IT research and advisoryfirm Gartner. In 2009,within enterprise applications, SaaS

represented 3.4 percent of totalenterprise spending, slightly upfrom 2008 at 2.8 percent,which shows that there is nomajor change in terms of the

demand for SaaS.

Over the next 3-5 years about

40 million Americans will benewly added tothe insurance

system, increasingadministrative complexity that

will lead to a swellin manual work

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order to keep the monies flowingbetween the various con-stituents. While this trend has beenchanging over the years, it will stilltake a very long time for systems tocatch up and replace the amount ofmanual work that will always beneeded.It is anticipated that over the

next few years the amount of dataentry work will probably reduce, assystems get more sophisticated anddata transfer between the varioussystems become more seamless. Re-gardless of this, the need for valueadded services like medical coding,insurance follow-up, collection ac-tivities, and claims adjudicationservices will continue to in-crease. The healthcare reform pack-age recently announced by PresidentObama, which is considered themost sweeping change in the indus-try since the Medicare changes inthe 1960’s, has some challenges toovercome in terms of financing thevarious programs and reforms thathave been announced.In any event, some form of the

reform is much needed in the indus-try and will go into effect only overthe next 3 to 5 years, and will addmore than 40 million Americans(who currently don’t have insur-ance) to the insurance system. Thiswill increase the magnitude andscope of the administrative com-plexity, thus leading to more manualwork that has to be performed. Inaddition, the US has mandated thatthe entire industry move from ICD-9 (International Classification ofDiseases) to the usage of ICD-10codes throughout. This move to theICD-10 coding system is forecast tobe as big as the Y2K opportunity.Thousands of companies in the in-dustry will have to make changes totheir systems and processes to ac-commodate this transition. For ex-ample, there is a total of over 16,000ICD-9 codes while the number of

ICD-10 codes are about 64,000 andmore.

ChallengesThe opportunity for IT and servicesoutsourcing companies in the UShealthcare industry is bound to in-crease over the next few years. Asthe US economy slowly recovers,companies will look to get more ef-ficient and profitable leading to in-creased usage of offshoreresources. A lot of entrepreneurs and

Indian companies understand thatthe US healthcare industry is stable

and fairly recession-proof and thehuge opportunity they foreseemakes them too eager to get into theindustry. Therefore, they tend to getinto undesirable business practiceslike arbitrarily lowering the pricingand paying more for labor in India,in effect squeezing the margins andjeopardizing the long term viabilityof the services industry from a qual-ity perspective.Security of information is ex-

tremely important when servicing

the US healthcare industry and a lotof companies in India do not under-stand the risks associated with sen-sitive information leaking outsideand the negative effect it will haveon the future of the entire indus-try. Servicing the US healthcare in-dustry properly will require a goodamount of capital investment up-front to set up the proper infrastruc-ture. Serious entrepreneurs shouldbe cognizant of this, if they are in itfor a long haul. The other challengewill be to find good talent in Indiato provide the services, especiallythe voice based ones as this requiresnot only good English communica-tion skills but also very good ana-lytical skills.In summary, while the opportu-

nity remains huge for the healthcareoutsourcing industry in India andcan grow 20-fold from where it istoday, it will happen only if we col-lectivity provide a lot of value addedand high quality services. si

The recent healthcarereforms announcedin the U.S. have ar-guably been one ofthe most oppor-

tunistic business areas that In-dian services industry can lookforward to. While the quality ofhealthcare in the US is ar-guably one of the best in theworld, the administrative as-pects of the industry is by farthe most complex and difficultto comprehend systems andprocesses in the world. Thehealthcare industry currentlyrepresents about 12 percent ofthe US GDP and is expected toreach close to 15 percent overthe next 7-8 years. Tradition-ally, the administrative side ofthe healthcare industry has

been termed the laggard whenit comes to technology adop-tion, and the IT spend is esti-mated to be about two percentof revenues compared to the fi-nancial or banking industrieswhere it is about 8 to 10 per-cent.

TrendsThere is a major reason whytechnology adoption is difficultin the administrative side of thehealthcare industry; it is theregulatory complexities in-volved. Most IT companieshave found it difficult to buildsystems that are able to handlethe ever changing federal, state,and private insurance regula-tions. There is a lot of workthat has to be done manually in

hheeaalltthhcarea ChaLLenging yet PROMiSingMaRKet fOR india

BBuussiinneessss:: By Gopi NatarajanThe author is CEO, Omega Healthcare

The risks of leaking out sensitiveinformation and its negative effect on the future of the entire industry is a serious issue to bedealt with

The Zinnov Managementresearch shows that Software-as -a Service(SaaS) would touch $650

million in 2015.Services likePlatform-as-a-service

(PaaS) and Infrastructure-as-a-service(IaaS) would attain a mar-ket of $434 million. The domestic Indian Cloud computing market is

expected to be $66 million.The Indian companies

provide with PaaS and IaaSto bring out the hiddenmarket potential.

� Payroll is mostly ‘policy’ driven andpartly ‘statutes’ driven: The businessrules of an organization determine theapportionment of the various compo-nents of the payslip. These businessrules are susceptible to changes dueto various factors - competitionchanging the rules, aggressive growthtrajectory of the organization, or itcan also be based on demands of thevarious stakeholders. These rules arevery specific to the organization; asimple example could be the incen-tive calculation for a manufacturingindustry and a FBP (flexible benefitplan) for aservices industry.

Payroll processing is also af-fected by periodic statutory changesbut they are far less complex in na-ture as compared to the policy drivenissues. But statutes driven changesimpact the competition also in equalmeasure and hence the overall effectis minimal.

Organizations having multiplelocations have to make investment inresources to take care of the actual fil-ing of compliance related procedures.This resource is expected to managethe relations with the local statutoryoffice personnel and also be able tounderstand the periodic changes inregulations.

An in-house team will find itvery difficult to make rapid changesin the payroll processing arising outof policy or statute changes, as pay-roll is construed as a non-core activ-ity.

� Growth plan for payroll processingpersonnel: In most of the organiza-

tions the internal resources workingon payroll processing do not have acareer plan to look forward to. Due to

the complex nature of payroll pro-cessing, their knowledge is indispen-sable to the organization andmovements to other internal openingsare not encouraged. This leads to sud-den attrition and an open vacancy,which becomes difficult to fill as theexpertise specific to company busi-ness rules is built over a time (big riskfactor) and is available only with theindividual.

� Lack of process innovation: Payrollprocessing is overlooked by organ-izations for improvements as gener-ally no problem is reported on theoverall delivery mechanism. Em-ployees are also happy to get usedto the existing process issues withtheir focus set more on the value ofthe payslip. The point to be con-veyed is that simply everybodymisses the opportunity and thescope ‘payroll processing’ providesas an improvement area and its con-

temporary alignmentto overall businessobjectives. Peopleare the most impor-tant assets of any or-ganization andensuring timely de-livery of error-free

payslips can add to the satisfactionat the workplace.

� Technology: Organizations use pay-roll application, which is a standardor customized solution provided bya vendor or a third party

service provider. In either case, up-grades call for investment which man-agement is unwilling to make as payrollprocessing is not viewed as critical. De-pendence on software service providersis high and further investment is diffi-cult to justify in terms of ROI. End re-sult: Legacy rule continues.

Way Forward ….IP3 FrameworkService ProvidersIP3 (Infrastructure–Product–Process–People) framework deployed serviceprovider are the best fit serviceproviders for the above issue. Worldover, Ramco are among the very fewcompanies who have the IP3 frame-work advantage. This framework helpsorganizations to switch models; fromBPO to licensing to hosting. The switch-ing model gives flexibility to an organi-zation to decide on the ‘right solution’within its budget without compromisingon the quality of delivery. si

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People usually miss the opportunity and thescope ‘payroll processing’ provides as an im-provement area and its contemporary align-ment to overall business objectives

Emerging businesses are faced with tough challenges in terms of people management,process improvement, and quick technology adoption. They are looking for contin-uously redefining their competitive advantage, strengthening the delivery of theirvalue proposition in the market place and improving the overall organizational po-sitioning vis-a-vis its peers. The role of HR in such organizations is becoming more

strategic than operational. With aggressive business growth, HR heads need to build in scalabil-ity of HCM (Human Capital Management) processes in their long-term strategic plans.Payroll processing, which is primarily managed by HR department in most of the organiza-

tions, offers a great scope for process improvement and cost reduction. Realizing this potential,some of the emerging businesses in the telecom, IT, ITES, and even manufacturing sectors haveoutsourced this to experts so that they are able to focus on issues more strategic in nature. Thistrend is catching up and the inherent complexity of payroll processing is making this ‘next-genHRmove’ a reality, quite sooner than anticipated. Current Issues Faced by Organizations in Pay-roll Processing

Managed Payroll Processing

People

Subject matter expert Query Mgt Infrastructure

Supervisor Compliance Storage

Validator Procedure Communication

Training S/w version changes-

Technology--

Process Technology

Time and Resources

BBuussiinneessss:: By Vishwanathan K AThe author is Head – BPO, Ramco Systems

A study done by ForresterResearch on top technologi-cal companies like Mi-

crosoft, Dell, HP and IBMshows that internal IT is notmentioned in the reports.Merely I6 percent of theCEO’s mention about IT intheir reports. Forrester'sconcept of Business Tech-nology suggests that a com-pany should focus on atleast 10 to 15 IT projectsrather than focusing onhundreds at a time.

of asset quality. In addition to the specialmeasures, other measures usually takenat macro and micro levels by regulatorsare:

� Stabilizing interest rates� Stricter guidelines on exposure tosingle line and segment of busi-nesses

� Greater mandatory disclosures andscrutiny of their businesses andpractices

� Moving away from the regime ofself regulation and voluntary disclo-sures for financial institutions

� Regulating the entry of new banks � Strengthening corporate governanceand increasing accountability

� Heightening requirements to im-prove quality of credit

The initial support provided by the reg-ulators ensured that the financial sys-tems did not collapse; and by supportingthe immediate funding requirements ofthe banks they ensured that the trust wasnot lost and there were no unprece-dented defaults. These were importantshort term measures, but for the finan-cial system to sustain and operate inde-pendently it requires infusion of longterm funds. The central banks have provided

debt guarantees to usher in long termfunds, though this is not a sustainablefunding mechanism. Private equity in-vestors have been the source of longterm funds for the banks for a long timenow but they weren’t forthcoming to in-vest more, fearing the potential undis-closed losses. These guarantees may nothold water in the long term unless dis-closures are complete.Impaired asset portfolio manage-

ment is one other area that has broughtsleepless nights to regulators. The regu-lators came up with special measuressuch as providing insurance for lossesor purchase of assets. Secondly, guaran-teeing of debt by government may notwork, as sovereign ratings of manycountries have fallen.

We have seen the various measurestaken to revive the economy; however,the outcome of all these measures on thelending behavior and their impact onvarious economic factors governing thegrowth of economies such as budgetarydeficits and fiscal structures are to be ob-served.

Budgetary deficits are expected torise; however, controlling the interestrates becomes very important. The coun-tries having healthy public debt financeswill come out of the woods earlier thanothers. India is projected to have a rea-sonable budgetary deficit of 6.8 percentat the end of the year as against a 12.3percent budgetary deficit in the U.S..This shows that economies such as Indiawould come out of the recession fasterthan many other developed nations suchas the U.S..Secondly, some fiscal measures

such as tax cuts may be taken in thecoming year, resulting in stimulatingthe demand of the household sector.This could potentially increase the dis-posable income in the hands of the con-sumers, but in the current marketconditions consumers have limited orno access to credit, which causes themto hoard cash. To encourage savingsconsumers can expect, as a one timemeasure, lenient approach by banks onlending to individuals based on creditratings and providing them with accessto credit.In the long run, the challenge will

be for the government and regulators towithdraw the stimulus packages thatare being offered to the financial insti-tutions. The timing of this exit is as im-portant as its beginning; it cannot be tooearly as that may lead to recurrence ofthe problem and cannot either be too

late since the continued dependence offinancial institutions on the stimuluspackages for their survival would bedisastrous for the system. All the funds that are being pumped

into the market are to stimulate demandand provide temporary resources tobanks to lend. Presently, the banks are

not being forced to take losses on thebalance sheet and dispose a delinquentasset, which means that the resultsshown by them in the ensuing quartersmay not be a true depiction of their fi-nancial status. This is one of the mainconcerns of the investors: undiscloseddelinquent assets and this, in the nearterm, may lead to stagnation. It is veryinteresting to watch the effect of theseand the counter measures the govern-ments will take to address this problemin the long run. The present economic situation

will trigger mergers and acquisitionsin the financial services sector in thenear and medium terms. We have notseen much of M&A happening in therecent past as the banks and govern-ment have adopted a policy of waitand watch. It is a matter of time beforewe see this happening.To conclude, the effects of the meas-

ures will vary based on time, country,and overall sentiments. A sustainablemeasure would be to create separate in-stitutions to handle such assets and fundthem directly and or through consor-tiums. Consumers and businessesshould expect further monetary and fis-cal measures coming their way to makethis turnaround a reality. Banking is thebackbone of global economy and willnot perish on account of cyclicalchanges but will only bounce back withgreater resilience. si

There is no one best solution for the problemas it is not the same in all countries; and soeach country adopts a different strategy to address the economic crisis

The world is now seeing anunprecedented weakness inlending flows - be it mort-gage lending or unsecuredlending. A silver lining in a

rather gloomy market condition is thatin the current year financial institutionsare witnessing a marginal growth in theirbusiness and not a decline as was seenin 2008.The global retail lending market

shrank by two percent in 2008 to$27,500 billion. However, the global re-tail lending market is forecast to have avalue of $32,750 billion by 2013, an in-crease of 19 percent since 2008. Mort-gage lending dominates the market withjust over 80 percent of the market sharein value terms and America accounts for50.4 percent of the global market value.The measures taken by Americans to re-vive the mortgage portfolio are closelywatched as their revival is key to reversethe present sagging sentiments.There are largely two main players

in the act of revival - government andregulators. The actions of these playerswould help the industry and economyturn around. There is no one best solu-tion for the problem and the problem it-self is not the same in all countries; andso each country adopts a different strat-egy to address the crisis. Secondly fi-nancial institutions, anticipating thereactionary behavior of these players,will survive and emerge as leaders in thelong term.

Some Measures for Re-vival of EconomyDeposit insurance is onesuch special measure for re-vival, and as a concept it is as oldas banking. Deposit insurance helpsprevent run on banks and thereby in con-trolling the short term liquidity crisis.Major economies have raised the limitson the deposit insurance to boost the in-vestor’s confidence to stem the runs onthe banks.Stock markets are the pulse of fi-

nancial markets and the barometer onthe health of an economy. The positivesentiments of the stock market help inimproving the general sentiments in aneconomy. Restrictions in short sellingare one such measure to restrict and con-trol the bear sentiments in the market,thereby reducing the investor anxiety.It is a catch 22 situation for many

banks. The banks’ balance sheets areskewed with delinquent assets portfolioon one side and on the other they do nothave the capital to sustain lending.Banks’sources of funding have dried upas investors have lost confidence, andhence the governments are stepping into help some of the major banks by pro-viding capital infusion. There is a limited way in which a

government can participate in direct cap-ital infusion. Hence, for other banks thegovernment has introduced a debt guar-antee scheme wherein, based on the

gov-ernment guar-antee, the

banks get additionalfunds to source their tier-1 and tier-2capital requirements from the market.Asset purchase of the banks im-

proves the liquidity position. There aretwo implications, in case the purchase ishigher than the book value it results inshoring up the capital, and in cases it isbelow the book value it helps in im-proving the balance sheet of the banks.Asset guarantee provides an assur-

ance to the creditors on the quality of theportfolio of assets of the bank. Therebythe creditors do not withdraw funds asthey are covered from risk of default. Nationalization is the harshest meas-

ure to shore up the confidence of in-vestors and depositors and boost theirsentiments. This measure is adoptedonly when the failures of such bankshave very high impact on the financialsystem and the government anticipatesthat it may lead to chaos and mayhem inthe financial market circles.Regulators play an important role in

bringing back trust and buoyancy in theeconomy. Recessionary periods arechallenging times for regulators, on onehand they need to encourage banks tolend and on the other they need to en-sure that there is no further deterioration

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Rescue MeasuresA Conundrum

LendingThe author is Lead Consultant, Finacle,Infosys Technologies

BBuussiinneessss:: By Ashwini KumarThe author is Lead Consultant, Finacle,Infosys Technologies

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As collaboration gainsadoption within enter-prises of all sizes, it’s fastbecoming a valuable toolfor the productive knowl-

edge worker. Organizations now recog-nize the compelling value of interactingany time and anyplace with peers, cus-tomers, and partners, and seek to roundout their collaboration solutions with in-tegrated instant messaging and asyn-chronous workspaces as well ason-demand system management.Accelerating interactions while

boosting productivity means organiza-tions accomplish more in less time —and at lower cost. Once an enterprise re-alizes obvious gains from Web collabo-ration, it first becomes an initiative, thena mandate. Extending the ability of em-ployees to reach global colleagues, cus-tomers, and partners via a hostedcollaboration model ensures that produc-tivity will increase substantially.The evaluation and final decision for

choosing between a hosted service or anon-premise, self-managed model usuallyfalls to the IT department. The key con-siderations for making this decision en-compass architecture, infrastructure,manageability, and total cost of owner-ship. Organizations must typically de-velop a full cost-profile of choices, notjust the purchase price.

Organizational Requirements forHosting Collaboration SolutionDeploying a full-featured collaborationsuite that addresses the needs of severaldepartments calls for a single point of ad-ministration. Because IT frequently ad-ministers collaboration, well-architected,managed solutions requiring minimaltime and resources are favored. The tablebelow represents the typical short-list forselecting a collaboration solution.

Comparing Technologies of Hosted vsOn-Premise CollaborationThe architecture of any software deliv-ered as a service has commonalities thattranscend applications. On-premises so-lutions are generally chosen to provide asense of tighter security to the organiza-tion at the expense of reach and costly ITsupport — both of which are of para-

mount importanceto the company. On-demand servicesprovide intense, standards-based securityshielding without compromising reach.With service monitoring available to col-laboration administrators, the companyrelying on hosted solutions need onlymanage access. In the case of an on-premises system, there is regular soft-

w a r ec h a n g ec o n t r o l ,plus serverand net-

work provi-sioning thatcome intoplay both in-ternally and ex-ternally.

An im-p o r t a n tdistinc-tion be-t w e e nh o s t e dand on-

premise col-laboration is that

both collaboration and conferencinghave attained ‘utility’ status due to wide-spread adoption in everyday businessprocesses. Providing such a communica-tions utility, not only internally, but alsoexternally — tying partners, customers,and remote employees together— couldplace a huge burden on IT staff. Thesefeatures will persist in addition to meet-ing expectations for service, perform-ance, and privacy.

Three Major Concerns among CIOs1. Scaling up the number of sessionsIn the on-premise case, scaling in-volves adding servers and increas-ing IT headcount. The additionalhardware cost plus the capital ex-pense and incremental IT headcountcreate a stair-step increase in cost.In the on-demand case, the cost of

scaling is absorbed by the serviceprovider. The service is alwaysover-provisioned in order to havecapacity available, and there are noadditional IT costs for adding users.

2. Reducing network congestion andmaintenanceAn on-premise solution requiresthat all network congestion, appli-cation provisioning, and bandwidthmanagement be handled by IT andtelecom services within the enter-prise. This may involve firewall fil-tering, Access-Control Lists (ACLs)in routers, and other network infra-structure configuration and moni-toring exercises. In the on-demandscenario, all of these issues are man-aged as a service.

3. Assisting usersAs collaboration usage grows in theenterprise, hosts and attendees oftenask for assistance. This support ismore readily given by the serviceprovider that maintains over-provi-sioned customer service resources.This eliminates the bottlenecks nor-mally associated with internal ITteams fighting fires in favor of ascalable, 24x7x365 support team,that’s well trained and ready tomove users forward.

The Checklist for CIOsThere are several important items toconsider when evaluating an on-de-mand collaboration solution vs an on-premises one, including:

� How much work will my IT teamshave to perform?

� What will the support desk impactbe?

� How do I scale the solution whenmy organization grows?

� Will the service provider be morereliable than a self-built, on-premise solution?

� Do a global network and dedicatedbackbone make a difference for myworldwide operation?

ConclusionHosting and on-premise collabora-tion both provide great benefits fororganizations needing to connectwith global partners, customers, andemployees. Each approach has asso-ciated requirements that weighagainst benefits, but are tempered bycost. Organizations must weigh thevalue of a solution by balancing thetotal cost of ownership against mis-sion-criticality and the timing of re-turn on investment.Time, then, becomes the most

valuable commodity, followedclosely by IT resources. How muchtime is required to deploy? (IT ef-forts) How long before users adoptthe solution? (Training ramp-up)When will we experience processtime reduction? (Adoption and pro-ficiency) How much downtime willwe experience? (Availability, scala-bility) How quickly can problems beresolved? (Support, service) Willcommunications remain totally pri-vate? (Security, threat detection).Quantifying people’s time shows

clearly the costs with which IT mustcontend. Knowledge-workers whouse the collaboration system consis-tently and proficiently will attainrapid benefits through acceleratedresults and abbreviated businessprocess.The on-premise approach will re-

quire significant upfront and ongoingefforts by the IT and training depart-ments. The hosted, on-demand ap-proach alleviates these efforts andshifts the responsibility and resourceexpenditure onto itself, freeing theorganization to realize the benefits ofwidespread collaboration use acrossall business processes. With a multi-tenant architecture, dedicated globalnetwork, and highly available serv-ices designed to scale to a large num-ber of concurrent users, the hostedservice provider will deliver a returnon investment much faster than anon-premise solution. si

OrganiZa�onal Need IT Issue Solu�on

100 percent service access

Ease of use

Good performance

Con!dentiality of information

Loss of time, data, setups

Expanded use as a result of growth

Global reach

ROI

No downtime

Minimal support

Performance complaints

Information security and privacy

Crashes, interruptions

More stu" to manage

Connectivity

Usage monitoring

High availability, redundancy

Online training (live/archived)

Low-latency service

SSL, AES encryption, complex passwords, access restriction

Global backup capability

Managed scalability, over-provisioning at the ready

Global data centers, private !ber

Self-service monitoring, Back-end stats

CollaborationOn-demand vs On-Premises

TTeecchhnnoollooggyy:: By Kiran DatarThe author is Managing Director, Cisco WebEx India

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The Promise of the Cloud

Cloud computing is ac-tively revolutionizing thetraditional IT landscape. Itis all about paying onlyfor what you consume. It

is a legitimate way for companies to sig-nificantly lower costs of infrastructurewhile increasing scale of operations.Cloud computing promises to in-

crease the speed at which applicationsare deployed, foster innovation, andlower costs, thereby increasing busi-ness agility. Forward-looking compa-nies are now looking at this model toreduce infrastructure costs and simulta-neously increase computational capa-bilities. Gartner has predicted that cloudcomputing will be the top most tech-nology area IT should concentrate on inthe year 2010. Compared to the begin-ning of 2009, the cloud computinglandscape now is very different with ahuge potential to change the face of IT

for ever. Over the next five years, IDCexpects spending on IT cloud servicesto grow almost threefold, reaching $42billion by 2012 and accounting for ninepercent of revenues in five key marketsegments2. More importantly, spendingon cloud computing will acceleratethroughout the forecast period, captur-ing 25 percent of IT spending growthin 2012 and nearly a third of growth thefollowing year.

Businesses today require a fast, re-liable, and secure IT infrastructure toflourish. Small and medium enter-prises are generally unable to meet thehuge capital outlay that such an ITsetup requires. Therefore, these organ-

izations generally opt to migrate to thecloud, especially since it enables themto focus on their core activities, in-stead of worrying about maintainingtheir IT infrastructure.

The Role of TestingMigrating to the cloud has its own set ofchallenges and risks such as data in-tegrity, security, privacy, reliability, scal-ability, business acceptability and

manageability, which can be mitigatedthrough adoption of additional proce-dures. To overcome these challenges,thorough testing of applications be-comes mandatory. Traditional methodsof testing on-premise software will not

provide sufficient coverage,Various types of testing required for

a cloud set up include: � Functional testing � System integration testing � User acceptance testing (UAT)

� Non-functional testing � Security testing � SOA testing� Performance testing

� Load testing � Stress testing� Scalability testing

� Compatibility and interoperabilitytesting

� Disaster recovery testing

Several other variables like multiplebrowser platforms and versions, operat-ing systems, and hardware further com-plicate the situation. It is evident that aone-size-fits-all approach would notwork in such a scenario, and may in-deed prove to be a recipe for disaster.Rather, comprehensive cloud testing ac-quires prime importance that cannot beunderstated.With the scope for cloud computing

increasing, there is a spike in demandfor cloud testing as well. As softwareapplications become more critical forbusiness changes, the software devel-opment process is becoming more agile,distributed, and non-cohesive. This,along with the emergence of a globaldelivery model, has resulted in smallerdistributed teams operating independ-ently for development, testing, and in-tegration. To support this kind ofdevelopment processes and the need forcontinuous testing, organizations spenda major part of their budgets in settingup test environments and automatedtool licenses. Cloud testing leveragescloud computing resources to increasetesting functionality and significantlydecrease costs. The biggest saving onaccount of testing in the cloud isachieved through the conversion of cap-ital expenditure (capex) to operationalexpenditure (opex). Huge initial invest-ments in building capacity are replaced

with need based sourcing of infrastruc-ture, quality tools, and human resourcesleading to multi-tenant, efficient, andcertain utilization. With cloud testing,enterprises have unlimited resources attheir disposal, paying only for what theyconsume, only when and if they con-sume it.

Cloud testing is practiced in the industryin two ways:

Testing cloud: This is to performtesting of the applications, which havemigrated or are to be migrated to thecloud so as to ensure that their perform-ance, security, and reliability match orexceed expectations in view of thechanging delivery methods

Testing using the cloud: The secondone is to leverage the cloud-based hard-ware infrastructure and computing re-sources to perform traditional testinglike function, performance, load, stress,security, and compatibility testing forregular, on-premise applicationsBoth the approaches enjoy wide-

spread popularity, and there are numer-ous vendors and service providers whoare providing these types of platformsand services to both consumers and or-ganizations.

Testing CloudOne of the most common statementsmade by experts about cloud computingmodels is that somehow the economiccrisis of the last few years is pushing en-terprises to use cloud to save money onIT operations cost. Tightening budgetshave opened the minds of enterpriseseverywhere to the possibilities of cloud

computing. A key attribute of cloudcomputing is how it changes econom-ics. You only pay for what you use, andrates are typically lower than the equiv-alent cost of building and supportingthese services internally. There is agrowing trend towards cloud enable-ment of applications or hosting applica-

tions on the cloud, butcompanies also need to under-stand the risks associated with itand adopt proper mitigationplans, the core of which is test-ing. The above model alsoworks well for businesses thatare not clear about the businessmodel by reducing the entry

barrier. This provides a great value forcustomers who can consume theseproducts and services at a reasonableprice point. Cloud computing represents a shift

towards delivering dynamically scala-ble IT resources as services over the In-ternet. These services typically sharesome key attributes, such as elasticity,resource sharing, multi-tenancy, self-service, and pay per use. Three types ofservices can be delivered via CloudComputing: l. Software as a service (SaaS) 2. Platform as a service (PaaS) 3. Infrastructure as a service (IaaS)

In addition, there is the concept of pub-lic cloud and private cloud. All thesekinds of clouds need different types oftesting, as traditional testing is not suf-ficient in a cloud environment. Enter-prises need to have a betterunderstanding of the way different typesof cloud work, how they impact busi-nesses and which testing approachesshould be used for them. They need toadopt an end-to-end testing approach,starting from requirements to deploy-ment, because each stage has differenttesting requirements.

Testing Using CloudWith the availability of massive cloudinfrastructure (servers / load farms)

‘Cloud’Testing, the

Way

TTeecchhnnoollooggyy:: By C.V. NarayananThe author is Head - Managed Testing andWeb Technologies, Sonata Software

Several variables like multiple browser platforms and versions, operating systems, and hardware in cloud computing make comprehensive cloud testing necessaryand one-size-fits-all approach would not work

Cloud testing leverages cloudcomputing resources to increase testing functionalityand significantly decreasecosts

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around the globe, some companies havestarted leveraging them for conven-tional testing activities, the most promi-nent one being Performance Testing ofWeb applications using cloud infra-structure. Prominent tool vendors arealso aligning with this business modelto provide the tools using cloud.Performance testing is usually asso-

ciated with huge capital expenditure dueto investment on tools, infrastructure,and resources. Moreover, with the in-crease in the number of concurrentusers, the costs of tools also increase ex-ponentially. Due to this, most compa-nies do not test applications for theexpected number of users, resulting intheir poor performance and huge in-vestments on building capacities.However, by leveraging cloud in-

frastructure, companies can eliminatethe investment on infrastructure andtools. Additionally, it also provides forgeographically distributed loads, whichare similar to a real-world situation,rather than tool-simulated loads.

To sum up, the benefits of testingusing cloud are: � Elimination of upfront invest-

ments on tools and infrastructure � Creation of real-world situations

through simulation of geographi-cally distributed load patterns

� Facilitation of on-demand per-formance testing for organizations

There are only a few servicesproviders in the industry today thatoffer solutions for both testing ofcloud and testing using cloud. To offersuch services, companies need a deepunderstanding of the cloud environ-ment, factors affecting the environ-ment such as security, multi-tenancy,and compatibility, and more impor-tantly, the requirements of cloud com-puting infrastructure providers.

The Road AheadCloud computing became a buzzwordeven before it was defined. It’s a gamechanger in the way applications are de-

livered, managed, and integrated. Withincreasing focus on cloud computingtechnologies, cloud service providersneed to equip themselves with the nec-essary capabilities in order to meet thedemands for cloud testing. The impor-tance of cloud testing is highlighted bya study conducted by the research firmsThe 451 Group and ChangeWave inwhich 1,771 corporate software buyersout of the 2,000 surveyed listed appli-cation testing and development as oneof the top five uses of public clouds. Al-most all Indian IT providers are ramp-ing up competencies in the overallcloud computing space by forging part-nerships with cloud providers likeAmazon, Microsoft, Savvis, Vmware,and Google. These hosting and plat-form-based players themselves arebeing extremely proactive in pushingcloud-based deployments and are part-nering with service providers to deliverend-to-end solutions. Analysts andtechnology advisory firms are of theopinion that the number of applicationsand the amount of content in the cloudnow available to both consumers andcorporations have grown to a criticalmass and cloud computing is the wayto go. A cloud computing based ITservices model would make all the

more sense for small and medium-sizedenterprises and would be an example ofbusiness model innovation that will seta new precedence in the IT industry.Cloud computing is clearly worm-

ing its way into the enterprise, espe-cially as a testing and developmentenvironment and as a platform for lessthan critical applications and services.Organizations can leverage cloudbased testing for higher flexibility andlower cost. ‘Testing as a Service’ orTPO (Test Process Outsourcing) pro-vides organizations an option to set upa virtual test lab without any upfrontinvestment in lab infrastructure, au-tomation tools licenses, and skilled re-sources. The pay-per-usage pricingmodels can help in controlling ITbudget and maximizing ROI. Therapid pace at which the cloud is beingadopted by users and corporationsalike provides the next level of op-portunity for IT service providers toramp up their skills and address thedemand, which is increasing by theday. Testing teams should equip them-selves with viable strategies to miti-gate the risks and issues associatedwith cloud computing by covering ad-ditional capabilities available in thecloud computing environment. si

Func�onal Tes�ng

Non Func�onal Tes�ng

Compa�bility & Interoperability Tes�ng

Disaster Recovery Tes�ng

At the �rst level System integration testing and user acceptance testing needs to be carried out to ensurethe developed cloud meets functional and business user needs.

Performance Testing Performance Testing including load and stress have to be carried out ensure the developed cloud is scalable and meets end user performance requirements

Security Testing Security Testing is very important for a cloud environment and has to be performed to ensure application and data integrity.

There are two angles to this. First ensure the developed cloud works on multiple environment like browsers, OS and other software and hard ware platforms. Second to ensure the developed application is compatible with di!erent cloud platform providers like Amazon and Go Grid.

This is another important testing activity to ensure data recovery in case of hardware/ infrastructure failures. In most cases since the applications are hosted on public clouds, companies must ensure data recovery due to emergencies.

Different Types of Testing during Cloud Enablement

According to Gartner, independenttesting as a business globally isgrowing at 40 to 50 percent andthere is a 35 to 40 percent growth inoffshore testing services. As per theestimates of Ovum, the US alonespends a total of $ 59 billion on soft-ware testing. Of this total spend,only a meager $13 billion is out-sourced as a service to the Asiancountries. Given the reputation ofIndia as an IT country, a total of 70percent, totaling to $9.1 billion isgarnered by Indian IT serviceproviders. The application develop-ment and maintenance market hasonly demonstrated a CAGR of 19percent year-on-year, in comparisonto 47 percent by the independenttesting services. Given the growth opportunity, andsaturation of the application devel-opment and maintenance business,all IT majors have made their in-vestments in software testing serv-ices. This is evident from the factthat all IT majors now have testingcenters of excellence and offer inde-pendent testing service. “Till a fewyears back, the average deal sizes inoutsourced testing projects wereabout $50,000 to $60,000 requiringa few testers to be on the job. Onlycertain parts and types of testingwere being outsourced to India. Cur-rently, independent software ven-dor’s (ISV) are outsourcing

end-to-end testing projects and theaverage deal sizes are around $2-4million.For India, to be prepared to grab

a $9.1 billion pie of the outsourcedtesting market, the major challengeis to overcome the shortage ofskilled resources. As per estimates,there is a shortage of 22,000 testersand potentially there will be a short-fall of 40,000 more in the years tocome.This shortage is now a major

concern for the IT service organiza-tions, considering that the academiais not geared up to support the pro-gram, and many of the training or-ganizations are not geared up tomeet the demand of the industry. Inthis scenario, the question still re-mains as to how is the industry plan-ning to tackle the shortage ofsoftware testers? The current education programs

provided by independent training in-stitutes in the market do not meet in-dustry expectations. While theindustry ideally looks forward to aresource that is truly industry-readyand can be deployed with minimalintervention of further training, mostprograms provide superficial knowl-edge and do not concentrate on test-ing skill development, thereby notcapable of providing industry-readysoftware testers. The challenge weneed to work on is in devising a cur-

riculum that teaches enough and thatincludes relevant topics that are cov-ered in depth. In addition to devisingthe curriculum and delivering it,there is a need for a industry-widecommon agreement on the compe-tency framework for testing profes-sionals, and an acceptance by theindustry members for the sameframework.Considering the present growth

and potential in the software testingindustry, the opportunities for soft-ware testers are enormous. Whilethere is not enough training availableto them, the pay package is certainlyvery encouraging with entry levelsalaries ranging anywhere between1.4-3.6 lakhs. A career in testing canbe as challenging and interesting as adevelopment job. In fact, in somecompanies these days, softwaretesters get paid even more than soft-ware developers. Customers will want to ensure

that software bugs don’t eat up theirdollar investments, and will demandbetter testing. This would make thetotal investments in testing grow, andthis would mean that testing is hereto stay and there is a great career forindividuals with this skill sets. si

SSooffttwwaarree tteessttiinngg

Software testing industry is gearing up to be one with high growthpotential, and the inequality in supply and demand of talent makesit the next wave of employment growth

tthhee nneexxtt BBiigg eemmppllooyymmeenntt WWaavvee

BBuussiinneessss:: By Pradeep Chennavajhula

About Author

The author is CEO, Co-Founder, Edista Testing

scribers in India and still adding at arate of 10 million every month, thesuccess of m-commerce can only be areality if the customer is at ease in ac-cessing and using the various applica-tions on his or her mobile. The averageperson in India who is not connectedwill never be able to comprehend thepotential of the connected world. Tel-cos need to promote content bundledwith the connectivity and extend themarket to even unconnected users. Thecost of the connectivity could get ab-sorbed by the restricted or proportion-ate usage. Some of my friends in thetelecom industry shared some very in-teresting pointers on the price sensi-tivity. It has been estimated that if anapplication is charged, say at Rs. 10per month, then an estimated 25 per-cent users download the content. 40percent of the people download thecontent at Rs. 5 and 60 percent down-loads it at just Rs. 2. At a charge of Re.1 per month, it is estimated that morethan 80 percent of the users will down-load the content. Once the user expe-riences the content, chances are highthat he will opt for an upgrade to stan-dard data plans and hence wouldevolve into a full-fledged data user.

Banks and Financial InstitutionsWith less than 59 percent of the total In-dian population having access to anybanking services, with connectivity andelectricity continuing to be a pressingchallenge, the mobile becomes the idealdevice to access the common man liv-ing in the remote villages of India. The

RBI guidelines were largely SMS baseduntil recently when it relaxed the normsallowing domestic remittances and fundtransfers through the mobile. The do-mestic remittances market in India has ahuge growth potential as over 30 per-cent Indians are migrants in urban areas.With the new guidelines, the receiver nolonger needs to have a bank account andcan simply collect cash at the nearestbank or its agent’s (i.e., business corre-spondent) outlet upon producing thetPIN received via SMS and a valid IDproof. Having said this, it must be notedhere that most of the banks are yet to de-velop their m-payment gateway; and theneed for a robust m-payment gatewayon the lines of the e-payment gatewaycannot be underestimated. It is also theassumed responsibility of the banks andfinancial institutions to educate thecommon man to this effect and buildtrust. Banks must also come forwardand take a bold step towards reducingthe cost of transactions on the mobile.

Role of Media, the Opinion BuildersFor m-commerce to be a success inIndia, the media has a great role to playin taking the issues of the ‘value-cre-ators’ that include the content develop-ers and telcos, and getting them heardby the regulators and the government.The industry players need to cometogether to establish industry standards

for m-commerce transactions. As‘opinion builders’, the media has a well-defined role to play in creating the cu-riosity and confidence in the mindsetsof the consumers to try and experienceso that m-commerce becomes a ‘cannotdo without it’ or ‘must have’ service.

Government, Regulators, and PolicyInfluencersThe impact of the global recession andeconomic slowdown in the recent pastwas minimal on India and the Indiancompanies, mainly because of our reg-ulatory framework, corporate laws, andthe existence of effective policy guide-lines and tax regime. Thanks to the Tele-com Regulatory Authority of India(TRAI), the country has a much evolvedtelecom industry. The governmentshould also consider extending financialsupport to application developers, eas-ing the tax laws for service providersengaged in m-commerce, and offeringspecial tax rates for m-commerce trans-actions.

ConclusionThe mobile, with its greater penetrationthan the Internet in India has alreadychanged for ever the way people inter-act in their daily lives. The issues ofphysical presence at an outlet and accessto the Internet, amongst others, are fastgetting eliminated, giving the consumerthe opportunity to transact anytime,anywhere. Yes, m-commerce is evolv-ing in India, but if the stakeholders inthe ecosystem put their heads togetherand join hands to address these criticalissues, the mobile could become theuniversally accepted de factocommerce tool. si

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Even as we were marvelingat the way the Internet hadchanged our lifestyles, theincreasing popularity ofthe mobile phone and de-

velopments in mobile technology haveheralded a new era in mass communi-cation and commerce for the masses.Touted as the next-generation of e-commerce, mobile commerce (m-commerce) enables users to access theInternet without needing to find aplace to plug in. A vast segment of thepopulation that neither had a landlinenor a bank account (unbanked) in theirnames have had a rapid leap and nownot only they own a mobile handsetbut are also well poised to transact ontheir mobile. The speed of mobile pen-etration is 10 times faster than the PCpenetration and is expected to becomeone billion by 2014. The mobile chan-nel has provided a rare opportunity notonly to leapfrog years of poor infra-structure development but also in by-passing geographical constraints tobring massive benefits and lifestylechanges to millions of under-servedpeople across India. The average In-dian does not own a PC, but the chai-wala (tea vendor), the taxi-wala, thefarmer, the housewife, the kabadiwala,and just about everyone has a monthlybudget to keep their mobile phonealive. The huge unbanked populationand the lack of credit card penetrationcan little hinder the growth of m-com-merce in India. Let us take markets

like Vietnam and Cambodia for in-stance, which are much poorereconomies as compared to India andhave much lesser credit card popula-tion, and yet m-commerce has alreadyevolved in these countries. So, can wethen say m-commerce will be a defi-nite success in India? Well, the indus-try is in its nascent stage and isevolving every passing day, and eachone of the stakeholders in the ecosys-tem viz., content developers, telcos,regulators, banks and financial Institu-tions, users (consumers), and even themedia have a definitive role to play.

Content DevelopersIndia is a land of many languages butonly two percent of the Indian popu-lation prefers reading in English. Ifthe content is in local language, itwill not only ensure quicker adoptionby the user but also will be an instantsuccess. Further, content developersare tempted to look at India as onemarket, and there are more players toshare the pie. Also emerging are theregional markets, growing exponen-tially and offering a huge potentialfor developers especially the start-ups. These apart, there exists a huge

B2B market for m-commerce inIndia as well.

TelcosWho else but the telcos can better un-derstand the market, the customers,and importantly their profiles? Telcoscan either fund the startups or offerproject specific funding assistance. Iftelcos prefer not to risk funding a

project or a startup, they can look atthe option of evaluating and support-ing quality projects by taking up theresponsibility of marketing the con-tent, thus saving huge marketingbudgets for startups. With such abacking from telcos, the startups canapproach potential investors and seekfunding for the project. To me, sucha step by the telcos will encouragemany young Turks. Some of the tel-cos that I know have already made amove in this direction but othersshould also follow suit.With half a billion mobile sub-

M-commerceCommercefor the Masses

A vast segment of the population thatneither had a landline nor a bank accounthas had a rapid leap and is now wellpoised to transact on the mobile

The success of m-commerce can only bea reality if the customer is at ease in accessing and using the various applications on his or her mobile

The author is Vice President – Strategic Development, Suvidhaa Infoserve . He can be reached at nayan@suvidhaa.net

TTeecchhnnoollooggyy:: By Nayan BhedaThe author is Vice President – Strategic Development, Suvidhaa Infoserve . He can be reached at nayan@suvidhaa.net

Industry trend: Finding high quality engineers in the U.S. is areal challenge for companies. With the economic meltdownand the high cost of education in the U.S., the influx of for-eign students has slowed down, which would translate toless engineers available to companies. In conjunction, thecost of doing business in the U.S. has risen, which en-courages companies to find alternative locations. As aresult of the above two forces, India has become ahotspot for design service companies eager to servethe U.S. market. A word of caution - there is a big

d i f f e r -ence between a design service company and an AMS design serv-

ice company. A high level of commitment along with professionaltraining is required from engineers to be successful in AMS design services.

A handful of companies based in India like Cosmic, Sasken, and Wipro are alreadycompeting globally in this domain.

The decreaseof foreign student inflow

and the increase in thecost of doing business

in the US have significantly turnedthe attention of

companies toward India

As the world knows, softwareservices and digital design services arevery mature markets in India. In thisdomain, work is done from offshoreeither through companies like Infosys,Wipro, Mindtree, and Sasken orthrough subsidiaries of MNCs inIndia. Almost all U.S. semiconductorcompanies have design centers inIndia that are located in hotspots likeBangalore, Noida/Gurgaon, Pune, orHyderabad. In contrast, there has been more re-

luctance to outsource analog design,since it is considered a black art. Thisis changing as the trends favoring themigration of software and digital workto places like India are also relevant toanalog design and test areas.

Growth of market: Software,firmware, digital design outsourcing,and local markets have already grownto large numbers in India. The IT andBPO industries of India is expected tohave a growth of over 7 percent dur-ing 2009-10 fiscal year and to log rev-enues of $64 billion. According to thelatest forecast of NASSCOM, the ITand outsourcing industry will log anexport growth of 4-7 percent this fiscalto log $48-50 billion in revenues. Do-mestic revenue for the industry is ex-pected to grow much faster at 15-18percent to touch $13 billion, the in-dustry lobby says in its annual surveyon the sector. In the last few years, AMS design

services market is steadily gainingmomentum. The market stood at about$1 billion in 2007 and the compoundannual growth rate (CAGR) is ex-pected to climb by 11 percent from2006 to 2011, according to Gartner es-timates.

AMS Ecosystem: To build a worldclass AMS design service company, anecosystem of Analog and mixed-sig-nal services and solutions has to becreated. Highly talented engineers arethe heart of the company; hiring, train-

ing, and motivating them is the keyfocus of AMS design service compa-nies. Being in the service industry,there can never be enough attention tocustomer satisfaction. AMS compa-nies put their engineers through rigor-ous technical and professional trainingto meet industry quality standards andfocus on these services: � Analog and mixed-signal solutions� Mixed-signal physical design� IO solutions � Board design services� Test and characterization services

Outsourcing analog design and testwork is not as simple as software ordigital design since the process is notwell defined. Very few companieshave succeeded in building a sustain-able business model. Such companieshave design centers in second tiercities and work closely with collegesthere to get access to talent and re-sources. This approach lets them passon the cost benefits to the customersand helps to retain talent better. Em-ployees do not have to deal with bigcity hassles and achieve a better worklife balance. Sankalp’s approach iseven more notable since it already hastwo operational sites and has a stated

goal of having 6 to 8 centers in differ-ent parts of India. This gives engineersand managers an opportunity to returnto their roots to do more meaningfulwork closer to their home towns. Thisapproach makes customer projectsmore manageable as it becomes possi-ble to focus on a particular disciplineand or specific customer at a particularsite, at the same time protecting IP.

Services strength in numbers: For adesign service company, the top linedepends on the number of high qual-ity engineers available to it. During the

first half of 2010, design serv-ices companies have turneddown a number of businessopportunities since they arelow on available bandwidth.From a business point of view,it is a great situation to be in.Companies are tackling theproblem by aggressively hir-ing from colleges and puttingthe recruits through rigoroustraining programs. In parallel,they are bringing industry vet-erans and senior leaders onboard as consultants. US hir-ing is very selective and free-lance engineers are used toexecute projects, which haveto be done onsite.

Values, customer services, and workenvironment: It is of utmost impor-tance for a semiconductor design serv-ices company to protect the client’s IP.At Sankalp, we train our employees toknow the significance of IP protectionand the measures they should take toprevent any leaks. Honesty and in-tegrity are the values on which thecompany is founded. Customer serv-ice is stressed upon and employee per-formance is heavily graded based onprofessionalism and customer service.Semiconductor design is a creativeprocess, and to foster talent employeesare given the freedom to make deci-sions and develop into leaders. si

Having operations onmore locations

helps attract talent fromthe respective surroundings, who inturn focus on particulardisciplines and or a specific customer at a particular site

s i l i con ind ia |43|J u l y 2 0 1 0s i l i con ind ia |42|J u l y 2 0 1 0

indo-US trend

Design Servicesin AMS Semiconductor

TTeecchhnnoollooggyy:: By Ash PatelThe author is Director of Business Development,Sankalp Semiconductor

““““

CCIIOO PPrrooffiillee:: By Vimali Swamy

“Social networkingand consumerWeb applicationsand their forayinto the enterprises

is what one should look out for in thenear future,” says Ranga Jayaraman. Asthe CIO of Nvidia, a leader in visualcomputing technologies, he is quick toobserve the technology trends that willdrive the industry in upcoming years.The industry has been developing at afast pace and technologies like cloudcomputing and enterprise versions ofconsumer Web applications are whatwill drive collaboration within enter-prises tomorrow. Exemplifying his thoughts, Jayara-

man talks about the scope of a popularconsumer application like YouTube. Ina consumer’s everyday life, YouTube isone of the most common platforms toshare experiences and perspectiveswith each other as a video log. But atan enterprise level, it holds much morepotential. A lot of time and effort can besaved in the training of resources viaYouTube like capabilities. A technol-ogy expert or a trainer can effectivelycreate a video podcast and post it withcareful packaging and tagging of thecontent on an internal video sharingsite, where it is available and searchableby others in the company. The users canwatch it, add comments about whatthey saw and learnt and what they didnot, what needs elaboration and recom-mend it to other friends. “This will pro-vide a means to augment organizationallearning capture and propagation mech-anisms such as documents and wikis,”he says.Similarly, cloud computing, even in

its initial stages, is a very promisingtechnology that could transform theway IT organizations function today.The idea that one does not requireeverything within the four walls of thecompany to provide effective serviceand support to customers is very attrac-tive. And, companies like Sales-force.com have proven this with theirsales, customer relationship, and part-ner relationship management tool suite.“Salesforce.com is an excellent exam-

ple of major enterprise applications inthe cloud. Force.com, on which theSalesforce.com applications are built isa very good example of a powerful ap-plication development environment asa cloud offering,” explains Jayaraman.But where do these fit into the

larger scheme of everyday operations?Jayaraman is quick to answer. If onelooks at the scope of what most IT or-ganizations spend their energy on, avery large fraction of their day wouldbe consumed in routine tasks like serverupkeep, networks, storage, training, andaddressing problems of resources.Adoption of these new technologieswill allow IT organizations to freethemselves to develop new capabilitiesof great business value.

Cost Optimization, the Driving FactorFrom a CIO perspective, Jayaraman isequally enthusiastic about one of thecore challenges of any IT organization— cost optimization.“CIOs typically do not receive any

lasting kudos when it comes to manag-ing and reducing costs, but it is notsomething they can afford to overlook,”says Jayaraman. Like his peers in theindustry, optimization of resources has

been his constant focus as a CIO, andover the years he has observed severalareas of opportunity for effectivelymanaging it. Any IT organization has a large

number of contractual relationships forhardware and software products andservices. It is imperative for a CIO tofocus on what the real needs of thecompany are for the products and serv-ices versus the contractual obligationswith the vendors. The entire vendormanagement cycle with a commitmentto achieve a win-win outcome is quiteessential for cost reduction, he insists.The next area is operational opti-

mization. Nvidia makes some of theworld’s most complex chips. For ex-ample, its latest generation GPU has

Technology is Fast Changing Be Open to Embrace the Change

s i l i con ind ia |45|J u l y 2 0 1 0s i l i con ind ia |44|J u l y 2 0 1 0

over 3 billion transistors and is able toperform a multitude of functions, notonly in graphics but also in generallarge scale supercomputing. Designing,developing, and debugging these chipsrequire the engineers to do millions ofcompute jobs per day. These jobs arerun in large compute server farms withthousands of servers, crunching awaynon-stop, day in and day out, utilizingpetabytes of storage and very highspeed bandwidth networks within andacross datacenters. “In order to drive costs down we

have focused heavily on how storage isutilized, identifying and eliminating du-plicate content and migrating contentthat is not being used frequently to lessexpensive storage tiers according to im-portance. Also we have been looking atways of partitioning these server farmsand forming job queues in more intelli-gent ways so that we can increase theutilization of those servers more andmore,” explains Jayaraman. It is with such focused and well

thought out cost management strategiesthat Jayaraman helped Nvidia navigatethrough the tumultuous economicdownturn. Now, with future growth onthe horizon, he is enthusiastic to talkabout the opportunities ahead. Nvidia’sbusiness spans the entire spectrum ofcomputing from mobile to supercom-puting. Mobile computing is a majorarea of focus for the company. Today itsTegra chips are finding their way intoextraordinary devices like smartphones,computing tablets, and smart books.One of the other core businesses ofNvidia is high-performance computing.It’s CUDA enabled GPUs enable highperformance supercomputers to be builtat affordable cost. Getting into the mo-bile and supercomputing arenas meansthe company is selling its products toenterprises, including the CIOs of thoseenterprises. So, Jayaraman ensures thatIT is involved in the development andsupport of capabilities for NVIDIA tomarket and sell to those customers andsupport them after the sale.

Treading on a Challenging PathThe role of a CIO is a highly de-manding job, especially at a dynamiccompany like NVIDIA, states Jayara-man. Keeping up with the currenttechnology and judiciously deployingit to solve real business problems,while ensuring information securityand managing effective delivery ofservices to customers is a challengethat excites him. Any given product at Nvidia has

people working across different geog-raphies. Enabling the employees towork together and collaborate effec-tively, overcoming the geographic andcultural communication hurdles is an-other area of focus for him. Some ofthe technologies he is exploring for thischallenge are pervasive video confer-encing, people search using profilesrather than names, internal video pod-cast publishing, and enterprise socialnetworking for work groups and com-mon interest communities.On the external business partners’s

side, Jayaraman believes that lack oftransparency is a continuing challengewithin the industry. IT organizationsrely, to a large extent, on the partner-ships with organizations outside thecompany. A partner could be aprovider of hardware, software orservices. “I feel that service providersspend tremendous efforts in buildingpartnership with customers, but theyoften do not provide sufficient visibil-ity into their operations and cost. If thepartners will create a more open envi-ronment it would enable a deeper un-derstanding and the partnership will bemore effective,” Jayaraman explains.This is a challenge every companyfaces and the industry will have to takea collective effort to overcome it.

Leadership and VisionAn industry veteran, Jayaraman hasa vast experience spanning IBM, Hi-tachi Global Storage Technologies,and currently Nvidia. Though hestarted as a researcher in IBM work-

ing on robotics and solid geometricmodeling technologies, Jayaramanquickly felt that he was more inter-ested in transforming business andconnecting with people. He then ledthe storage business at IBM as theCIO, which was then sold to Hitachito form Hitachi Global StorageTechnologies. After a five year stintat Hitachi he joined Nvidia in thesame capacity in 2008 and has beensuccessfully driving the businesssince then. Jayaraman strongly feels that IT or-

ganizations should develop a culture of‘heroic professionalism.’ Due to thedynamic nature of IT, problems con-stantly arise in a business function andsome employees become ‘professionalheroes’ by making a diving catch andsaving the day. People need to be ablenot only to solve the problem of theday but also to really look at how to dothings so that they are not inundatedand buried by the problems. This is aculture he has been instilling at NvidiaIT over the past 2 years.A people’s person, he believes that

one cannot be a leader if driven byselfish objectives and goals. A trueleader is one whose goals are beyondself and has a vision for the organiza-tion he works for. His mantra is ‘loveall and serve all’. Jayaraman is astrong believer in developing a healthyteam, building a career path for hisgroup, and giving everyone a chanceto prove their mettle. As for him, hesays, “I don’t have a career to mindbut have a job to do. I give my all tothe job and the career is the side effectof a job well done.” A word of advice from him to

startup company leaders — “Work onproblems that matter and validate themwith the customers in the early stage sothat what you create indeed becomesvaluable. Engage with potential cus-tomer prospects quite early, seek outthe CIOs who see the potential for anearly engagement and strike a win-winvalue proposition.” si

One does not require everythingwithin the four walls of the company and should utilize theexpertise of external vendors toprovide effective service andsupport

Ranga Jayaraman

s i l i con ind ia |46|J u l y 2 0 1 0

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siTech20

RANK COMPANY

Stock PriceINR Closing28.06.2010

52 WeekHIGH

52 WeekLOW

% CHANGE IN PRICE4 Weeks 52 Weeks

CAPITALIZATIONIn Rs. Crore

INDIA INDEXIndex of the top tech public companies in India

Infosys TechnologiesTata Consultancy ServicesWipro LtdTech MahindraHCL TechnologiesMahindra Satyam Mphasis Financial TechnologiesPatni CompGTL LtdRolta IndiaHCL InfosystemsMindtreeMoser BaerCMC LtdPolaris SoftwareNIIT LtdSasken Communications TechnologySonata SoftwareSubex Systems

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RANK COMPANY

Stock Price(US$)Closing06.28.2010

52 WeekHIGH

52 WeekLOW

% CHANGE IN PRICE4 Weeks 52 Weeks

CAPITALIZATIONIn $ Millions

U.S INDEXIndex of the top tech public companies in U.S foundedand managed by Indians

Juniper NetworksCognizant Tech. Microchip TechSanDisk CorporationSyntelKeynote SystemsQlogic CorporationTibco SoftwareSycamore NetworksCavium NetworksAruba NetworksInfinera CorporationNetezzaIxiaNetScoutiGateEXL Service holdings OSI SystemsIsilon SystemsMagma Design

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