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Showing posts from December, 2003
Indian IT cos. giving headaches to large US system integrators In an interview to BusinessWeek , Chell Smith, Global Managing Director of Cap Gemini Ernst & Young's Technology Services group, talks about how the weak US economy and "upstart Indian firms" have transformed the IT consulting business in the US. Here are some extracts-relating to Indian companies: The pure-play firms from India (are) coming on and offering services like systems integration at much different price points than had traditionally been there. In some segments of the market there has been 40% price reduction -- or more -- over the last three years because of that. There's no question some organizations like Wipro, for example, are building up on-shore capabilities. They've acquired some local firms, they're moving upstream. As they start to do that, their costs go up. Their onshore people cost the same as ours. I wouldn't say "oh doom and gloom, life as we
The booming market for outsourced Clinical Trials Several companies are tapping into the market for "clinical trials" or testing of new drugs in India. Recent articles in Far Eastern Economic Review (free registration required) and Business Today (paid subscription required) describe this billion dollar opportunity and the players involved.
What's Dr.Bala Manian up to in India? Despite his sterling track record as a serial entrepreneur in the US, Dr.Bala Manian, has maintained a very low profile in the media. This is in sharp contrast to Indian IT entrepreneurs in the US--several of whom we got to see on the covers of business magazines, but whose their start-ups promptly bit the dust once the bubble had burst. Maybe, the fact that Dr.Manian's areas of interests lay outside the glamorous IT industry, helped him stay out of the media spotlight. But, not any longer. A detailed profile in the latest issue of Business Today reveals his plans for India. Here is a quick profile of the man's career: He has founded of a long list of biotechnology and instrumentation companies including Biometric Imaging Inc, Surromed, QDOT, Entigen, Biometric imaging, Lumisys, Molecular Dynamics, and Digital Optics Corp--several of them have proved highly successful. Biometric Imaging Inc, where he was Founder &
Nanotech start-ups bullish as Bush signs off on $3.7-B federal grant US President George Bush signed off on the $3.7 billion National Nanotechnology Initiative (NNI) bill which provides for four years of federally funded nanotech R&D. "The plan is for the R&D to eventually trickle out of the laboratory and into the hands of entrepreneurs and investors, who will then find ways to commercialize nanotechnology that can detect and treat disease, monitor the environment and produce and store energy," reports Private Equity Week. "As a result, the number of federally funded projects is expected to skyrocket, and universities, research institutes and startups all stand to benefit. The bill is expected to foster cooperation between academics and entrepreneurs, so that research developed by one group can be productized and marketed by another," the report adds. About 21 nanotech companies are estimated to have raised about $207.6 million in private equity invest
Productivity is the real "villain" for job losses; not outsourcing China lost 16 million manufacturing jobs, a decline of 15 percent, between 1995 and 2002, says The International Herald Tribune quoting a recent study by Alliance Capital Management. In that same time, U.S. factory employment shrank by 2 million, or 11 percent. That is, China--the so-called factory of the world--lost manufacturing jobs at a faster rate than the US!! So where are these jobs going? "That place is called Silicon Valley, where engineers are producing machines that work cheaply and make businesses the world over run more efficiently," says Kevin Laws , Entrepreneur In Residence at Venture Capital firm Pacific Rim Partners, in his VentureBlog article . "Running more efficiently means you can produce more things with less capital --and less people," he adds. Here is how the IHT article concludes: As hard as expendability is on the workers themselves, increased produc
Private Equity Week features heated debate on offshore outsourcing Though it isn't clear why the social implications of offshore outsourcing is a fit concern for a magazine focussed on Private Equity, PE Week's Editor-At-Large Dan Primack has triggered off an interesting debate with his column on the topic. According to Primack, US-based businesses should examine every possible avenue of hiring locally before going overseas. "It should be one of the most difficult decisions of your professional career. If it isn't, then it's generally safe to say that you are a fairly self-centered and callous person," he says in his column. "For those companies who do wind up with operations in Beijing or Mumbai, it is your responsibility to retrain the workers you are leaving behind and/or to help them find new jobs," he adds. The column has received feedback from several PE Week readers. Some extracts from the feedback that I found interesting: The Sent
Kumar Mahadeva's exit from Cognizant and heavy stock sales raises eyebrows The retirement announcement of Cognizant Technology SolutionsÂ’ Chairman & CEO Kumar Mahadeva has caught stock market analysts and industry players (including Cognizant employees) by surprise, according to reports in Business Standard and Economic Times "The Indian software services industry is intrigued if not downright puzzled by the abrupt exit of Cognizant's founder, chairman and CEO, Kumar Mahadeva," the ET report said. According to the ET report, Mahadeva had sold around $57.6 million worth of stock options and individual holdings from March 2000 till December 3, 2003. "Analysis of how the New Jersey-based Mahadeva has been consistently selling his stock in the market would reveal that it is a carefully managed exit. In the last six months, Mahadeva sold a whopping $25 million of his stock, filings with US Securities and Exchange Commission show," the BS report
It's not always cheaper to build start-ups in India With people like Sequoia Capital partner Michael Moritz saying things like "We can barely imagine investing in a company without at least asking what their plans are for India", it certainly seems like the "build in India" mantra has become mainstream in Silicon Valley. "Startups funded today should be built entirely abroad-from product design to product development to quality control to (in some cases) even sales and marketing. For every employee you have in the United States, you can have five in India," Ravi Chiruvolu, general partner of Charter Venture Capital, had said in his Venture Capital Journal column in March . "It's such an important a strategy that if a company presents a business plan saying it needs 40 employees-all in the US-to help develop and bring its product to market, we'll pass in favor of a company that can do the same thing with just five employees here and
The winners and losers in offshore outsourcing Some interesting extracts from New York Times' coverage of a roundtable discussion on the topic of job migration: Stephen S. Roach (managing director and chief economist of Morgan Stanley): Over the September to November period, employment has turned up, but many of those jobs came from the temporary hiring industry. These are service jobs, contingent workers without benefits and significantly lower pay scales. We're getting the G.D.P. growth, and by now any recovery in the past would be flashing green on the hiring front. This one isn't.... This is a profoundly different relationship between hiring and the business cycle. And I think these jobs are, by in large, lost forever.... ...This is classic election-year posturing by a Congress that is basically responsible for the problem itself and doesn't want to admit it. We have trade deficits with China and Japan because Washington is running the most reckless fis
US programmers now willing to work at Indian-level salaries, says BW column According to a column in BusinessWeek, when Jon Carson, founder of cMarket, recently felt an urgent need for four programmers, he asked his IT director to call an offshore software service intermediary. The intermediary came back with the number for the services from India: $40,000 per programmer--compared to the $85,000-90,000 a year required to hire experienced American programmers. But since Carson was "personally very uncomfortable" in sending the jobs overseas, he decided to offer the jobs to Americans-- at the same rate he would be paying for Indian programmers . He placed some ads in The Boston Globe, offering full-time contract programming work for $45,000 annually. (He had decided that it was worth adding a $5,000 premium to what he'd pay the Indian workers in exchange for having the programmers on site.) The result? About 90 resumes "flooded in", many from highly qualif