Indian IT firms should seek big acquisitions, Gartner says

On CNET News, Indian IT firms should seek big acquisitions, Gartner says Steve Ranger writes,

Indian outsourcing companies need to make big acquisitions if they are to challenge the existing world order of global IT services companies, analyst firm Gartner says.

The top six India players: Satyam, Wipro, Infosys, TCS, Cognizant and HCL–collectively referred to as “Switch”–accounted for 1.9 percent of the total $672 billion IT services market in 2006. That compares with 0.5 percent in 2001, according to figures from Gartner.

Gartner said these companies are making inroads into “key” clients, often beginning with smaller, project-based work. Despite their smaller size, Gartner added, they are making “significant strides” to challenge the market share leaders’ positions, by showing strong annual revenue growth far exceeding the rest of the market.

The average annual growth rate for the Indian companies was 42.4 percent in 2006, compared with a 4.3 percent growth of the market leader during the same period, the analyst group said.

Partha Iyengar, a Gartner vice president, said companies are re-evaluating their preferred vendor rankings to include Indian companies. “If the India-centric IT service providers continue to grow at the current pace, at least two companies will be a part of the top 10 companies globally,” he said in a statement.

But Gartner said it will still take a number of years for Indian companies to challenge the top service providers or appear among the top three market share leaders–unless they make a major acquisition. And the analyst group said that if market share leadership in the top three is a goal, these companies would need to pursue acquisitions of “considerable size.”

TCS scales up U.S. s/w delivery center

MUMBAI, INDIA: Indian IT services major Tata Consultancy Services (TCS), today announced that it had scaled up its North America Domestic Delivery Center, TCS Seven Hills Park, to 300 associates.

The announcement was made at an event attended by Ohio’s Governor Ted Strickland, said a press release.

Seven Hills Park provides a wide range of IT solutions, consulting, business process outsourcing and engineering services for TCS customers across industries including Banking and Financial Services, Life Science and Healthcare, as well as Manufacturing and Retail.

TCS Seven Hills Park is also the location of TCS‘ new North American Training Center. Over the last several months, more than 225 associates have joined the company from top universities throughout the country and completed a six weeks training program at the center as part of TCS’ Initial Learning Program (ILP), the release added.

The Ohio Governor said that fostering job creation is vital to a strong economic recovery for Ohio. “Companies like Tata Consultancy Services are tapping into our highly talented workforce and world class educational institutions to grow their business while providing high skilled jobs for Ohioans. This is the type of investment and long term commitment that will ensure Ohio’s place as an economic leader,” he added.

Welcoming the new associates, TCS CEO Chandrasekaran said the United States is by far TCS‘ largest market and Seven Hills Park plays an integral role in its strategy of putting our customers first.

“As part of our Global Network Delivery Model, Seven Hills Park helps TCS deliver on our promise of providing reliable, scalable, cost-effective delivery of IT services and solutions. I welcome these new associates into the TCS family and am sure they will help our customers achieve even greater success in the future.”

Ozzie, Muglia and the Microsoft cloud

LOS ANGELES – Porting an on-premise application to the cloud is not as easy as flipping a switch, according to Microsoft’s Bob Muglia. But the company will work with developers to help them adopt successful cloud development patterns.

SD Times sat down with Muglia, vice president of Microsoft’s Server and Tools Business unit, and Ray Ozzie, Microsoft’s chief software architect, at the Microsoft Professional Developers Conference. Topics ranged from how Microsoft can make cloud application development easier, to how it will leverage the cloud for development and testing in Visual Studio, and whether Silverlight was part of the open Web.

When asked how Microsoft would help its customers understand how to comply with regulations and data privacy laws that could prohibit moving data to the cloud, Ozzie emphasized that Microsoft has experience working in different countries throughout the world, and that it could parley those experiences to guide its customers.

Microsoft had to modify Windows Messenger features in different countries at the behest of regulators, but it still managed to ship its software, Muglia added.

Additionally, Microsoft has data centers located throughout the world to give customers that are located in countries with restrictive regulations the ability to use Windows Azure within their borders, Muglia said.

Ozzie said that he expected that laws will become less restrictive over time, because governments themselves have an interest in using cloud computing. Encryption is a model of how laws were adapted to changing technology, he added. “It’s as if they don’t know that encryption exists,” he quipped.

When asked about how Azure fits into development and testing, Muglia confirmed that Microsoft intends to integrate Azure into Visual Studio for provisioning test environments.

Microsoft will provide preconfigured virtual machines for Windows and; more customization (such as changing system configurations) will be added over time, he said.

That integration could represent another click up in level of “coopetition” with Hewlett-Packard, said Forrester principal analyst Jeffrey Hammond.

Lastly, Muglia and Ozzie were insistent that Silverlight was part of the open Web. They pointed to Mono Moonlight as an example of that, and they noted that Microsoft has licensed associated intellectual property, including Windows Media codecs, to open-source developers.

Mono project lead Miguel de Icaza said that he wanted Microsoft to go a step further by contributing technology to ECMA International. Muglia responded by saying that Microsoft was trying to balance standards with its ability to rapidly innovate the Silverlight platform.

Ozzie also gave a nuanced explanation about how Silverlight is meant to help developers leverage existing application and tool investments on the Web, and it was complementary to (and not meant to suppress) HTML 5. The draft specification of HTML 5 includes a framework for building Web applications.

In a follow-up conversation regarding the cloud, Jamin Spitzer, director of platform strategy for Microsoft, said that “Developers need to have a realistic sense of what changes and what stays the same by moving to an instance-based IaaS cloud.” Microsoft announced an IaaS (Infrastructure-as-a-Service) offering for Azure at PDC.

The “true promise” of cloud computing is fully realized through transforming applications for the cloud, he added, saying that developers needed to identify the core set of functional capabilities required for specific application scenarios, and then choose the right deployment location to best satisfy those capabilities, whether that is on premises or on the computing. Some workloads should stay on premises if moving to the cloud does not justify future cost savings, or if data needs to remain behind the firewall, he admitted.

cloud computing is here. Running applications on machines in an Internet-accessible data center can bring plenty of advantages. Yet wherever they run, applications are built on some kind of platform. For on-premises applications, this platform usually includes an operating system, some way to store data, and perhaps more. Applications running in the cloud need a similar foundation. The goal of Microsoft’s Windows Azure is to provide this. Part of the larger Azure Services Platform, Windows Azure is a platform for running Windows applications and storing data in the cloud.

cloud computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. To deploy a new solution, most of your time and energy is spent on defining the right infrastructure, hardware and software, to put together to create that solution, cloud computing allows people to share resources to solve new problems. cloud computing users can avoid capital expenditure (CapEx) on hardware, software, and services when they pay a provider only for what they use.