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

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 siliconindia JULY - 2010
Contents July2010
Editorial
16
Publisher
Harvi Sachar

High Time to Renovate! Cover Story

Editor-in-Chief

T
Pradeep Shankar
Managing Editor
Christo Jacob
Deputy Editors
Jayakishore Bayadi Jaya Smitha Menon
he BPO industry got India the tag ‘back office of the
world’. But now Indian players have to strive hard to
retain the status as they have to compete with the newer
Infinite
Anonya Roy
Binu T Paul
Editorial Staff
Benny Thomas
Eureka Bharali
destinations like Philippines, China, Vietnam, and Mauritius.
While India's business process outsourcing (BPO) industry is
forecasted to increase its revenue this fiscal by 15 to 16 percent,
Scripting
Niche
Gargi Sinha Juby Thomas there are serious challenges to achieve the grand goal of $50
in IT Services Upinder Zutshi
Kukil Bora Pragyan Acharya billion exports revenue by 2020. The domestic market seems to Market
Roshna Sankar Vimali Swamy be a silver lining and it opens the doors for new hopes for the By Christo Jacob & Vimali Swamy

Indian BPO players. But, to win the game it is high time for In-
Sr.Visualizer Raghu Koppal dian BPO players to think about the right model and fresh man-
Subscription Manager P Magendran agement in order to redirect further growth.
As the domestic BPO market is following the same curve 06 [In My Opinion] 24 [Business] 36 [Technology]
as that of BPO export market to move up the value chain, the Preparing for the Promise Indian BPO Industry A Silver Testing, the ‘Cloud’ Way
Mailing Address challenge for these players will be acquiring the right talent of 4G Lining Ahead? By C.V. Narayanan,
with domain expertise, especially in the rural areas. Moreover, By Atul Bhatnagar, CEO, IXIA By Vimali Swamy Sonata Software
SiliconIndia Inc they have to compromise on the pricing and also will have to
44790 S. Grimmer Blvd find their own solutions for infrastructure as there are frequent
blackouts in rural India. 09 [Infocus] 26 Expansion of Domestic BPO 39 Software Testing The Next
Suite 202, Companies Into Smaller Big Employment Wave
Fremont, CA 94538 In the coming years, opportunities will not only be in back of-
fice augmentation, but they will extend to processes through 13 [VC Chakra] Cities, a Boon By Pradeep Chennavajhula,
which enterprises will be able to reap the benefits. Though the LucidMedia Raises $ 4.5 Mil- By Sudip Saha, Springboard Research Edista Testing
T:510.440.8249, F:510.440.8276
concept of BPO in prisons and rural areas has already been im- lion
plemented, it will be difficult to crack the mindset of the cus- Jivox raises $4 Million 28 Healthcare A Challenging yet 40 M-commerce Commerce for
tomers to gain the buyer’s confidence. It’s high time for all the Promising Market for India the Masses
BPO players to think about a strong business model that will By Nayan Bheda,
work in the domestic market. Let us wait and see, and not count
14 [CEO Spotlight] By Gopi Natarajan, Omega
Suvidhaa Infoserve
siliconindia the chickens before they hatch!
Effective End-to-End Service Healthcare
Delivery Capability is the Mantra
42 Indo-US Trend in AMS
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Technology is Fast Changing
Copyright © 2009 siliconindia, Inc. All rights reserved. Reproduction
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22 [VC Talk] Infosys Technologies
Start-up ideas We Would Be Open to Embrace the
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|5|
World and PC Expo.
siliconindia July 2010

By Atul Bhatnagar
The author is CEO, IXIA
Preparing for
D
the Promise of
in my
opinion
riven by the increased
consumer demand for
wireless data bandwidth,
cellular data speeds have
increased over the last
decade by a factor of 10 every 3-5
years. Reporterlink has estimated that
wireless data traffic will increase ten-
fold between 2009 and 2017 – a 59 per-
cent CAGR. Fueled by a rapid increase
in interactive data and multiplay appli-
cations, data traffic is expected to hit
1.8 exabytes/month. Video is the largest
bandwidth consumer today, a trend that
will continue in the foreseeable fu-
ture.(see figure 1)
Mobile carriers are hard at work de-
veloping next generation of networks to
handle the huge increase in mobile traf-
fic. Long Term Evolution (LTE), also
referred to as 4G, is widely acknowl-
edged as the next generation technol-
ogy for both voice and data wireless
transmission. With the exception of the
air interface, LTE is an all-IP network
– taking advantage of and converging
with IP network technology. LTE has
some impressive capabilities:
 Support for multiple-input, multi-
ple-output (MIMO) antenna tech-
nology, including 2x2 and 4x4
configurations.
figure 1
siliconindia
|6|
July 2010
300 Mbps downlink and 150

Mbps uplink bandwidth when
using 4x4 MIMO.
 Latencies of less than 5 ms.
 Hundreds of users per cell.
Most major telecom equipment man-
ufacturers (TEMs) and carriers have
announced their intention to develop
and provide LTE products and serv-
ices. As of early 2010, 51 providers
in 24 countries have made commit-
ments. Early deployments are ex-
pected in Asia and North America in
2010, with significant expansions in
all major markets in 2012. 2013 will
see some 85 million LTE subscribers
and nearly half a billion people will
use LTE by 2015.
The perception of service quality is
everything to the customer, and the
lynchpin in preventing customer churn

In order for enterprises and carriers
to be fully ready for the 4G transition,
they must fully test their devices and

networks:
 From end-to-end, from the radio
tower through the IP core.
End-to-End Wireless Testing
Wireless network testing must en-
compass not only the latest technolo-
gies, but incorporate the interactions
between existing systems and emerg-
ing solutions. The major components
of an end-to-end wireless network so-
lution are shown in the figure 2.
4G
jitter, and packet loss, service
providers need to use QoE testing to
understand the user experience prior to
network deployment. This requires the
ability to correlate QoE statistics on an
aggregated and per-user basis, deter-
mine if the service level agreements
(SLA) are being met, and understand
Wireless service, end-to-end figure 2 the impact of one service on another as
they compete for network resources.
End-to-end testing of a wireless to the customer, and the lynchpin in Traffic shaping and QoS policies
are critical to the integrity of these
service must separately test the com- preventing customer churn. Networks
ponents in each of the radio access net- must forward and shape traffic so as to SLAs, and a growing and important
work, wireless core network, and ensure balanced quality of experience trend in service provider network
Internet core networks, test each of the (QoE) for all network users. traffic shaping is the use of data
iPhone is the perfect example of a high
three subsystems independently and
test the entire system end-to-end. As
performance, multimedia-capable
wireline and wireless networks con-
verge, multiple types of interface
device, and is the tip of the iceberg of
speeds must be tested in conjunction,
including 10 GE, 40 GE, and 100 GE.
what is to come
Proper testing occurs at multiple
levels, usually in a sequential manner:
 Compliance testing is an essential
first step in ensuring correct opera- As smart wireless devices become packet inspection (DPI). DPI goes be-
tion and interoperability. Compli- more and more prevalent, service yond the typical processing of header
ance tests are built from RFC and providers must be able to test their information and looks at the data
Atul Bhatnagar
other standards. networks with exponential amounts within the packet to determine the
 Functional testing further exer- of application traffic in diverse type of traffic being processed. DPI
cises device capabilities with com- mixes. They must anticipate the del- allows for better network control,
binations of options, multiple uge of voice, video, P2P, gaming, and prevents unauthorized users and serv-
connections, differing types of traf- other data traffic on their wireless ice types, limits denial of service at-
tacks, malicious traffic, and allows
fic, and many sequences of opera- networks. (figure 3)
tions. In addition to traditional network providers to manage bandwidth-in-
 Performance testing measures raw based packet metrics such as latency, tensive data such as P2P.
capacity, such as the maximum
At scale, using well modeled sce-
number of connections, maximum
narios based on actual subscriber
rate of connection establishment,
usage patterns.
and maximum uplink and downlink
At load, especially over the mobile
throughput.
backhaul network as it necessarily
 Scalability testing measures real
moves from TDM to Ethernet-
world ability to handle a complete
based infrastructure.
user 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 the
3G and 4G bandwidth usage. The per-
ception of service quality is everything
figure 3
siliconindia
|7|
July 2010

Subscriber modeling, including
multi-UE emulation, allows telecom
equipment manufacturers (TEMs)
and service providers to assess the
performance of their service delivery.
Test engineers must:
 Define how users connect to their
service provider network.
 Designate upstream and down-
stream bandwidth for each sub-
scriber.
 Specify which applications are
used and how they behave when
traversing the network and inter-
acting with each other.
 Configure multi-service traffic
distribution for each subscriber.
 Model usage for each application
with advanced timelines for traffic
load profiling over an hour, a day,
or a number of days.
 Measure QoE per-application, in-
cluding response latency, packet
loss, jitter, MOS scores for VoIP,
and MDI and MOS_V for video.
Validating Mobile Backhaul
Mobile backhaul is the network for
transporting mobile traffic between
cell sites (BTS/NodeB’s) and radio
controllers (BSC/RNCs). Backhaul is
one of the major contributors to the
high costs of building out and run-
ning a mobile network at approxi-
siliconindia
|8|
July 2010
mately 25-30 percent of total operat-
ing expenses. Rapid growth in mo-
bile broadband traffic, however, has
overloaded TDM circuits.
Adding additional TDM circuits
to address this challenge is not a vi-
able option. Operators are instead
looking to move to packet-based
backhaul techniques using IP and
Ethernet to gain a lower cost per bit.
Using Carrier Ethernet for wireless
backhaul potentially allows operators
to support large bandwidth increases
from cell sites, while only incurring
small increases in operational
costs.(figure 4)
The move from TDM to Ether-
net-based transport does not come
for free. TDM circuits are well es-
tablished at providing ultra-high re-
liability, voice quality of service, and
accurate timing. Ethernet technology
requires careful attention to match
these capabilities.
Testing for Ethernet-based mo-
bile backhaul systems can be split
neatly into performance testing and
conformance testing. Performance
testing determines how a deployment
will handle real world traffic interac-
tions at full scale, while conformance
testing determines if the appropriate
standards have been implemented on
networking devices correctly.
in
It is essential that wired and wire-
less components now be tested with
the same types and scale of traffic seen Over 500 Biggies Listed in
I
in actual network deployments. The
iPhone is the perfect example of a high Tax Defaulters’ List for 2010
performance, multimedia-capable de-
vice, and is the tip of the iceberg of
what is to come. Networks, both wire- t’s time to pay the unpaid. At least dividuals’current assets and to infor-
less and wired, must forward and 550 high net worth individuals mation like investment in mutual
shape handheld-driven traffic so as to and entities have been listed by funds, shares, and other expenditure.
ensure balanced quality of experience the Income Tax Department who In 2009, the IT department’s Di-
(QoE) for all network users. each have unpaid tax of Rs. 25 crore rectorate of Recovery had analyzed
Such increases will require and above. The amount has doubled the dossiers that had outstanding de-
providers to understand the network’s in the last two years to Rs. 2.5 lakh mands of more than Rs. 25 crore. Out
ability, including mobile backhaul, to crore, almost 66 percent of the total of the total of 551 such dossiers, only
deliver services to millions of cus- direct tax collection of 2009-10. 258 cases were found to be having
The total tax arrears were Rs. wholly actionable demands. These chief commissioner of IT.
tomers in a timely and consistent fash-
2.30 lakh crore till March 31. But an- are the demands that had not been According to sources officers in
ion. In order to accomplish this goal,
other Rs. 20,000 crore has already covered by any write-off proposal, the Joint Director and Additional
providers must employ subscriber
been added to it in the new fiscal. The BIFR proceedings, and settlement Commissioner ranks, armed with
modeling in order to understand what
department has targeted to recover commission proceedings. these dossiers, have been asked to
their networks can handle in real
Rs. 14,000 crore this year. In the pre- As further analysis showed, 227 supervise the cases and initiate at-
world situations.
vious year, nearly Rs. 12,000 crore out of 258 cases were concentrated in tachment proceedings, if necessary.
was recovered by the department. nine major cities. At the time of an- They can ask for records and latest
Conclusion
With the help of the Individual nual general conference which was balance sheets in order to detect cur-
The transition from 3G to 4G wire-
Transaction Statement (ITS), income held in the capital last year in August, rent assets from which recoveries
less networks and the required inter-
tax officers can have access to the in- a list was also handed over to each could be made.
operability with legacy technologies
will unleash a level of unprece-
dented complexity. Legacy tech-
nologies need to seamlessly interact
with newer technologies in order to
attract subscribers and limit mainte-
nance and upkeep costs.
Service providers will continue to
support multiple wireless technolo-
gies. It is essential that the wireless
core network be tested using multi-
UEs, subscriber modeling, and end-to-
end network testing. si
in
E
Indian Companies Created
60,000 Jobs in the US
ven though India has become
synonymous 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 the
2004-09 period.
A report, ‘How America Benefits
from Economic Engagement with
India’, released by the prominent Con-
gressman Jim McDermott highlights
that during 2004-2009, 90 Indian com-
panies made 127 greenfield invest-
ments worth $5.5 billion, and 16,576
jobs created in the US greenfield in-
vestments were those that were made
to start a new venture by constructing
new operational facilities from the
ground up. The top three destination
states for greenfield investments were
I
n a bid to inspire the budding entre-
preneurs, Obama has met the small
business entrepreneurs at White
House and lauded an Indian woman en-
trepreneur for her success. Prachee J.
Devadas, who moved to the US to turn
her entrepreneurial dreams into reality,
successfully set up a technology services
company in the US that has grown from
1 to 120 employees. Synergy Enterprises
was named among Washington Tech-
nology’s 2008 top 25 small contractors.
Prachee Devadas is the President
siliconindia
|10| July 2010
Minnesota, Virginia, and
Texas, in that order.
The report, jointly pro-
duced by University of Maryland,
India-US World Affairs Institute, and
Federation of Indian Chambers of
Commerce and Industry, gives a com-
prehensive analysis of America’s eco-
nomic engagement with India during
the period. It comes on the heels of US
President Barack Obama ending tax
incentives to the US companies that
move jobs outside the country.
The report focused on the specific
aspect of globalization of the Ameri-
can economy, especially the US, India
business relationship.
The investments mainly were in
mining, manufacturing, and other in-
dustries, the report says. The top three
states in terms of jobs created were
Ohio, Texas, and California, the report
Prachee Devadas Shares Stage
with President Barack Obama
and CEO of Synergy Enterprises, a cer-
tified woman-owned company, which
provides information technology and
management consulting services to
local, national, and international clien-
tele in the public and private sectors. Her
husband Anand Devadas is the Vice
President of the company. Before start-
ing SEI, Prachee Devadas worked for
small companies gaining experience in
business development, managing multi-
million dollar contracts while providing
professional services in training and
technical assistance, publication devel-
opment, grant review, and conference
management.
“Prachee told me that when she
started she had just one employee.
Today, she employs more than a hun-
says. IT services sector, which ac-
counts for the bulk of the outsourcing
deals, received less than 15 percent of
the total investment.
During 2004-09, 239 Indian com-
panies made 372 acquisitions in the
United States. The five US industrial
sectors that received the most green-
field investments were metals, soft-
ware and IT services, leisure and
entertainment, industrial machinery,
equipment, and tools, and financial
services, accounting for almost 80 per-
cent of the total greenfield investments
in the US.
A 2004 Goldman Sachs report had
forecast that nearly six million US jobs
would be shifted overseas to low-wage
countries like India.
dred people including her husband
Anand,” said Obama with the Indian
American couple sharing the stage
with him after the meeting with small
business owners.
According to Obama, the central
promise of America is that it is a na-
tion where anybody who’s got a good
idea and willingness to work hard can
succeed; and small businesses had cre-
ated roughly two out of every three
new jobs in our country.
“It’s that promise that has drawn
millions of people to our shores. It’s
what drives workers to become their
own bosses. It’s what propels some
basement inventor to bring a new con-
cept to market,” Obama said citing the
example of Devadas couple. si
Indian Scientists Should Pioneer
T
New Technologies: Kalam
he growth that India has
achieved so far is based on
patents that have been gener-
ated outside the country and it’s time
for the scientists in India to become
pioneers in innovation and technol-
ogy development. “Research now
must be national, especially in basic
science, to be able to meet global
competitiveness,” said former Presi-
dent A.P.J. Abdul Kalam.
Addressing scientists and stu-
dents at the Homi Bhabha audito-
rium, Kalam said that the institute
with its rich heritage in research,
basic sciences, and technology re-
search can help in upgrading the
I
country’s growth and prosperity.
t may be a small part of the overall
business 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 a
smaller base, the growth is higher.
Gartner Research Director Tervin-
derjit Singh said that the growth in the
industry is expected to be driven by
the rising demand for profession-
based services. They include research
for capital and financial markets, para
legal works, editing jobs for interna-
tional publishing houses among many
others.
KPOs core value propositions are
premised on providing business-re-
lated analysis and expertise on an on-
going basis rather than transactional
business process or technology-based
expertise. For example, contact centres
are a BPO capability, but collections
Kalam emphasized on green en-
ergy and told that scientists should
focus on moon-based solar power or
space power as it is non-polluting.
“We should work on safe transmis-
sion of solar power from outer space
to earth for human habitation. The
earth, moon, and mars are not sepa-
rate entities but strategic entities for
humanity,” he added.
Chalking out a mission for scien-
tists, Kalam put forth some scientific
challenges such as increasing solar
photovoltaic cell efficiency by using
carbon nano tubes, nuclear power
generation using thorium based re-
actor, proteomics research, inte-
grated vaccine development,
KPO space in India to grow by
25-30 percent a year till 2013
analysis is a KPO analytics service.
In terms of the growing competi-
tion from other emerging markets for
such services, Singh opines that al-
though other offshoring sites like
Philippines and Indonesia are emerg-
in
A.P.J. Abdul Kalam
prevention of HIV/AIDS, forecast-
ing earthquakes, and work on adult
stem cells, umbilical stem cells, and
embryonic stem cells.
Kalam presented a model of AS-
TROSAT, India’s first multi-wave-
length astronomy satellite, which
will be launched on board the Polar
Satellite Launch Vehicle in April
2011.
ing, India is still ahead. Countries like
Philippines and Indonesia are still not
mature enough in high-level profes-
sional work which India can provide.
Though the ongoing European
debt crisis is not likely to affect the
business volumes of domestic KPOs,
the outsourcing firms having more
than 30 percent exposure in northern
European countries will be facing
tough times even as their long-term
prospects remain strong. Infact for
him, the domestic outsourcing firms
should maintain a right geographical
balance from the point of view of their
client base and opt for multi-shoring
of their operations to hedge against
such a crisis. si
siliconindia
|11|
July 2010

in
Two Indian Students
Develop Top Paid
T
Apple Apps
wo India-born Stanford gradu-
ate students have created a
$3.99 application in the iPad. It
is the top paid app in the entire iPad
section of the App Store. Akshay
Kothari (23) and Ankit Gupta (22) at
the Institute of Design of Stanford
University have developed the Pulse
Reader app in the iPad.
Pulse is a clean and visual news
aggregator and the reader takes up to
20 news sources that can be followed
and a visual mosaic of the news can be
created. The article can be tapped and
a clean rendered view of the news
story can be presented. The app allows
users to see text-only versions of arti-
T
hough India has been criticized
for its high emission levels,
around 30 percent companies in
India monitor their carbon footprint,
states a recent survey by workplace so-
siliconindia
|12| July 2010
c l e s ,
which are Akshay Kothari & Ankit Gupta
basically
cleaned-up versions of a news site’s
RSS feeds, or to see the full articles as
they are presented on the Web. It also
lets sharing articles through Twitter
and Facebook by passing the individ-
ual sharing tools presented by each
news site.
Kothari says that the project was
inspired by ‘a personal frustration at
the whole news reading experience’ on
mobile devices. The stylish and easy
to use news aggregator service was de-
veloped in the Launch Pad class,
where the budding entrepreneurs are
Most Indian firms desire tax sops
for green investments: Survey
lutions provider Regus. Majority of In-
dian companies feel tax incentives
from the government are required to
accelerate adoption of energy-efficient
business practices.
“A majority 85 percent of com-
panies said if the government of-
fered tax incentives to invest in
energy-efficient or low-carbon
equipment, businesses would signif-
icantly accelerate their green invest-
ments,” the report stated. Globally,
only 37 percent of companies actu-
ally measure their emissions and
less than a fifth of companies (19
percent) measure the carbon foot-
print left by their activities.
Small companies across the
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
given an opportunity to de-
velop and introduce a prod-
uct in just ten weeks.
News organizations are
yet to get accustomed to
iPad strategies but are quite
hopeful about the success of
Pulse. “You absolutely do
not have to give away some-
thing great for free. If you
build something great, peo-
ple will pay you for it,” says Michael
Dearing, a former eBay Executive
who is a teacher of the Launch Pad
class.
Nearly 15,000 people have down-
loaded this app and it has generated
more than $40,000 in revenue, taking
into account Apple’s 30 percent cut.
Akshay and Ankit have created a com-
pany, Alphonso Labs, and are now
working on versions of the app for
other devices, as well as talking to po-
tential investors.
world, however, are well below this
average in their actual and predicted
level of green investment, indicating
smaller businesses are harder pressed
to select low-carbon equipment when
this comes at marginally higher
price. In India, only 25 percent of
small firms monitor their carbon
footprint compared to 45 percent of
large businesses, the survey noted.
“Adoption of green equipment
and monitoring initiatives is still dis-
appointingly low, particularly for
smaller companies. Yet small and
medium-sized companies account for
half of any country’s business
turnover,” said Madhusudan Thakur,
VP, Regus India Regional. si
LucidMedia Raises $ 4.5 Million
A
jay Sravanapudi
founded Lucid-
Media has re-
cently raised $4.5 million
in funding, led by MMV
Financial (MMV). This
funding follows the in-
vestment in December
2008 from institutional Ajay Sravanapudi
and individual investors
including Lake Street Capital and
Redleaf Group, bringing the total fund-
ing to $13.3 million.
Founded in 1999, the Virginia
headquartered company categorizes
traffic from many of the Web’s most
respected networks and exchanges,
providing advertisers with a way to
more effectively target online advertis-
ing inventory and increase their return-
Jivox raises $4 Million
D
iaz Nesamoney founded online
video advertising firm Jivox, has
raised $4 million in the follow-
on investment round from Opus Capital
and Helion Venture Partners. With this
latest 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. California
based Jivox is a provider of interactive
video ad technology that enables busi-
nesses to reach new customers online.
Many of the large media companies and
advertisers are using the Jivox platform
to create and distribute interactive video
ads and manage their ad operations more
effectively.
Currently, Jivox is aggressive on tap-
ping India’s growing online advertising
market which is estimated at around
$300 million, with the video component
estimated at just $30 million. “ In India,
on-spend through its patent
ClickSense. The company
plans to use the funds to ex-
pand its recently launched
self-service DSP platform,
which enables agencies and
advertisers manage their
online advertising cam-
paigns. The DSP leverages
LucidMedia’s patented
contextual targeting technologies to
provide more than 14,000 categories
along with page-level transparency and
multiple layers of filtering to protect
branded advertisers from inappropriate
content.
With many networks now reposi-
tioning as demand-side platforms, the
competition has increased but the team
at LucidMedia is not perturbed. When
while a sizable part of the new
advertising money was coming
into online video, the advertising
market still remained ripe for
print especially in the vernacular
industry,” Diaz Nesamoney,
President & CEO, Jivox.
The three-year-old firm
Jivox offers advanced ad cre-
Diaz Nesamoney
ation tools and targeted distribu-
tion through its network of over
1,000 media and content websites, as
well as through directory listings, viral
marketing programs, email campaigns,
social networks and more. Jivox also
provides sophisticated analytics that
drive continuous campaign improve-
ment, including a unique “video engage-
ment score” that gives advertisers
immediate insight into campaign per-
formance. “At the moment, the plan is to
look at funding in the first quarter of
2011. We could look at a figure similar
it comes to real solutions where one
can 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 across
the many exchange aggregators, the
demand-side advertising platforms are
the wave of the future as their valua-
tions are strong. “We hold a strong
foothold in the DSP space and have a
10 year track record of success, which
makes us appealing to the VC commu-
nity,” says Sravanapudi. LucidMedia
today is 30 people strong with offices
in New York as well.
to what we have already
raised depending on how
we chart our expansion,”
says Nesamoney. The com-
pany has an employee base
of 45 people.
Jivox works with most
of the top brands in the au-
tomobile, financial services,
electronics, travel & leisure
and entertainment sectors in
India. The company’s India operations
are handled by Naren Nachiappan, who
is the Managing Director at Jivox India.
The firm’s revenue model works on fee
per impression. It books spots on most of
the top online publishers in India, and
also in the U.S., and works on revenue
sharing basis in some cases. The Global
online video advertising is $1 billion
market and expected to grow at 20 to 25
percent and Jivox is trying to make a
mark in this market. si
siliconindia
|13|
July 2010
 CEO SPOTLIGHT
Effective End-to-End Service Delivery BPO Vendors Align Demand for Game
Capability is the Mantra Today with Clients Via Changing Ideas

C
Caliber Point is the independent BPO arm of Hexaware Tech- Right Shore Global By Keshav Murugesh, CEO, WNS

nologies Limited, a leading global IT & BPO services company.
By R U Srinivas, CEO, Caliber Point
specialized offerings complemented by
add-ons like six-sigma and other
process improvement capabilities. Now,
C
Delivery
By Nitin Pangam, CEO, ost reduction dominated the
Maeflower Consulting mind space of outsourcing
urrent client demands make it companies in the last
pertinent for every BPO ven- decade. India is past that stage,
dor to align with the clients to when we could provide basic cost
nitin PangaM

customers expect comprehensive capa-
bility on the part of service providers
and the ability to help them to be the in-
dustry benchmark, in addition to in-
creasing efficiency at functional levels.
Moreover, customers are increasingly
looking at on-shore and near-shore de-
livery capability of service providers, in
create better value and such ap- advantage to service our clients. In
Nitin Pangam is the CEO of
proaches have popularized the con- our conversations with clients, the
Maeflower Consulting, a consulting
cepts like transformational over-arching theme is around using
firm specializing in Demand
outsourcing. BPO not just as a survival tool but
generation & FDI Investor targeting
KeShav MURUgeSh
It is the capability acquired by a also one that serves as an engine for Keshav Murugesh, CEO, WNS. The
for Economic development of clients.
BPO after servicing multiple clients in growth. It’s about helping compa- company is a leading player in busi-
He is also the Director of QEDbaton,
the different space that allows the firms nies weather the storm by reducing ness process outsourcing.
an Integrated Demand generation
to study the different experiences and their cost structure rapidly and
company, catering to the business
using these cost savings and effi- outsourcing.

O
R U SRinivaS
ne of the hardest hit industries
like many others during reces-
sion, the BPO sector is now
witnessing a gradual upturn. Times
have changed and so have the demands.
While in the past BPOs were looked at
as a separate service when compared to
IT, today the IT and ITeS services are
often coupled together as a single sec-
tor. Thus organizations like ours (Cal-
iber Point & Hexaware), which have a
blend of these services, provide a win-
ning combination to customers. Some
companies like ours are now bringing a
third element to this service combina-
tion - analytics. It is one of the ways to
move 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 into
the market, customers want their ven-
dors to be capable of delivering an over-
all solution.
With the outsourcing industry ma-
turing, customer expectations also have
undergone a transition. Previously,
value-addition was synonymous with
addition to offshoring.
On a different note, a noticeable
fact now is the lucrative prospect that
the domestic market holds for the
BPO sector. Domestic market is ex-
ploding in a big way with BFSI, tele-
com, government, and public sector
becoming major consumers of IT en-
abled services.
Service providers are
expected to have compre-
hensive capability and to
help organizations to be
the industry benchmark
These developments have thus re-
sulted in a change in the operating
model of BPOs. Increasing demands
have forced large players to partner with
smaller firms and collaborate with them
to provide services to their customers.
Hence, the environment beckons co-ex-
istence than competition. These devel-
opments will also result in the
de-concentration of industries. The
BPO sector will no longer be a business
concentrating on only tier-1 cities, but
will trickle down further. The oncom-
ing years will witness the spread of
BPO related activities into these lesser
known areas.
make them capable enough to draw
out 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 working
on the clients’ processes and use the
learning to service the client organiza-
tion in a much effective way. The
usage of business intelligence in the
BPO firms has increased as there are
competitive pressures to deliver effec-
tive results.
The cost consciousness dawned on
firms during the recession has made
every client demand additional cost ad-
vantage in services, resulting in cost
optimization pressures in the vendors.
The challenge lies in providing service
at the same or better level at a reduced
cost. So, the industry has to scout new
technology advances that will help
them to constantly optimize their cost.
Also, the political and economic com-
pulsions are forcing the IT vendors to
seriously consider stronger globaliza-
tion and they are continuously setting
up hubs in U.S., UK and Europe.
Companies are increasingly foraying
into different countries to get close to
the clients, and in return have readily
increased job opportunities across the
development needs of ISV’s,
IT services companies and BPOs.
globe. However, in terms of optimiz-
ing their cost or scouting for certain
niche capabilities like efficiency in a
particular language, the companies
have renewed their interest in emerg-
ing markets like Africa, China, and
Latin America.
It gives a boost to their onshore-
offshore blended delivery. With their
presence well-balanced, the outsourc-
ing industry tends to constantly evalu-
ate opportunities to innovate. Thus, by
staying closer to the clients, the com-
panies can churn out different solutions
amidst 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 processes
more efficient through the cloud and
PAAS. Also, with the regular issues of
investments haunting them every time,
collaboration has come to play a big
role in successfully sustaining the busi-
ness. The collaboration of different
processes within the organization or
collaboration of different services be-
tween organizations deliver comple-
mentary processes is important.
ciency improvements to set a foun-
dation for fueling their growth as
the economy starts to recover; truly
partnering with the client to drive
competitive advantage. The cus-
tomers now demand that service
providers come with game chang-
ing ideas that ensure revenue conti-
nuity and winning over
competition.
The over-arching
theme is around using
BPO not just as a sur-
vival tool but also one
that will serve as an en-
gine for growth
The scope of outsourcing too
has widened beyond belief. There is
a high level of activity in finance
and accounting across all indus-
tries, a lot of new companies are
willing to outsource for the first
time, especially in the F&A space.
There is also significant activity in
the CPG, logistics, and media and
entertainment industries. New in-
dustries like retail are now open to
But the BPO industry still re-
mains highly under-penetrated. Ac-
cording to the latest Nasscom
reports, 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 is
tremendous. For this, client focus is
going to be the paramount require-
ment and offering customized solu-
tions will be the way forward to
bridge this gap. This may mean
providing onshore, near shore, and
offshore services to clients that are
going global.
One of the biggest challenges
Indian BPOs will face in the future
is a crunch of employable talent. Of
the 4 to 5 million students that
graduate each year, the industry is
able to employ only about 10 per-
cent. That causes the crunch. The
industry and the government need
to worry about the un-employabil-
ity of the remaining 90 percent. It
is important that we, the industry
leaders, take measures along with
the government to build strong ed-
ucation programs specific for this
industry across India including in
tier-2 and tier-3 cities. si

siliconindia
|14| July 2010 siliconindia
|15|
July 2010
 COVER STORY

Infinite
Scripting
Niche
in IT Services
Market

T
By Christo Jacob & Vimali Swamy

he last three years, had been testing times for

Fast Facts the IT industry across the world. While large
Founded
corporations hardly grew by 10 percent, the
1999
mid tier companies were on a decline. How-
Founder & Chairman
ever, there is one among the few companies
Sanjay Govil
that managed to change the script – Infinite Computer
Managing Director
Solutions, posted a growth of close to 35 - 40 percent; a
Upinder Zutshi
feat rarely accomplished.
Headquarters
Founded by Sanjay Govil in 1999, the Bangalore
Bangalore, India
headquartered company is one among the many mid-tier
Revenu
IT service providers in application development and
$140.9 Million
maintenance, testing, infrastructure management and in-
Headcount
tellectual property (IP) leveraged solutions. But what sets
3800 (as of June 2010)
it apart in the vast pool of players? Upinder Zutshi, CEO,
Vertical
Infinite, is quick to answer, “A healthy mix of Fortune
IT services
100 and mid level organizations as customers coupled
Website
with IP based solutions in niche services areas across
www.infinite.com
large number of verticals.”

Upinder Zutshi
siliconindia
|17|
July 2010
A step ahead of others The engagement model also of-
Zutshi believes that to exist in a fers flexibility in terms of tailoring
competitive market as that of IT these models to suit customer’s
services, one has to build long last- business requirements. The value
ing partnerships, to make every as- proposition in these models is built
sociation mutually profitable, around the theme ‘cost effective,
rewarding and enjoyable, thus en- faster and better’. Further, Infinite’s
hancing the scope of engagements Global Delivery Framework cou-
by expanding the breadth of serv- pled with the three-tiered delivery
ices, cross-selling opportunities, de- approach comprising on-site, off-
livering end-to-end solutions and site and offshore delivery options
addressing new areas within clients’ complemented with the wide range
organization. While, disruptive in- of flexible engagement models pro-
novations, especially, in the areas of vides clients the flexibility in terms
technology, revenue and delivery of engagement with access to best of
models have created a level playing the processes, methodologies, tools
opportunity for players globally; a and resources across various global
reflection of strong understanding of locations. This framework focuses
the business, customer centricity, on bringing in processes, efficien-
and desire to constantly innovate and cies and productivity tools to en-
do all this with simplicity and trust, hance revenue productivity and
has been Infinite’s edge. Through deliver time and cost efficiencies.
strategic and truly collaborative re- The Technology and Solutions
lationships with top technology Framework is integrated with Infi-
providers, Infinite brings its business nite’s engagement and Global De-
insight, accelerated methods and livery model, to ensure effective and
greater convenience to customers. efficient delivery execution. The en-
Infinite made significant progress by acquiring
customer IP in exchange for a revenue share
model and their own investment in IP creation.
The company’s global delivery gagement models start with onsite
model and offshore transition managed projects and extend up to
methodologies ensure that cus- IP leveraged, revenue sharing
tomers enjoy all the benefits of off- model.
loading work offshore. It works with “We are testing out new business
a variety of engagement models, and models that could be crucial to fu-
recommends the one most suited to ture growth and profitability. In a re-
the customer’s specific needs. “Our set world post the recession, old
staff is highly skilled and has sig- equations of more people equalling
nificant experience overseeing more revenues may no longer hold
large-scale Application Manage- true,” says Zutshi.
ment Outsourcing engagements for The company, for instance, has
Global 1000 companies. We employ entered into a 10 year strategic al-
a scalable staffing approach as well liance with Motorola to develop and
as a 24x7 virtual workday model to support its software enabled mes-
meet the specific needs of each saging products — SMS and MMS.
client,” says Zutshi. Infinite will acquire a non-transfer-
siliconindia
|18| July 2010
REVENUE*
160
140.9
140
Growth 32%
120 106.8
Growth 26%
100
85
80
60
40
20
0
FY 08 FY 09 FY 10*
able, royalty bearing worldwide li-
Number in USD Mn*
cense to Motorola’s messaging
product solutions. It will now de-
velop an application product that
will be sold as a licensed implemen-
tation back to Motorola, its clients,
and third parties. While the IP of the
licensed messaging product will re-
main with Motorola, Infinite will re-
tain rights to the IP of all add-on
software that it develops.
“Our sustainable engagements
with clients using innovative risk-re-
ward, revenue-sharing models, acquir-
ing proven revenue generating IP or
creating our own, together with our
improved value offerings allow our
customers to better align their R&D
spend, extend flexible multi vendor
product portfolios to their end clients,
with reduced risks,” Zutshi adds.
The strategy has worked well.
Today the company is witnessing
growth, from $85 million revenue in
2008 to $140.9 million in 2010, out of
which 90 percent of the revenue share
is from top 10 customers which are
Fortune 100 companies.
The recession has been a key billion market—virtually untapped
driver in helping us reach this stage by Indian players. While this market
says Zutshi. While IT outsourcing is is still a tough one to crack and re-
part of ‘business as usual’ CIO strate- mains dominated by global giants —
gies in the aftermath of the recession, the likes of IBM, EDS and CSC—In-
most technology leaders are paying finite sees itself competing with pure-
“far more attention” to what they are play Indian software services biggies
getting for by leveraging
their money. its offshore
Hence, CIOs expertise.
of Fortune Most For-
companies are tune compa-
under pres- nies are
sure to strike a reluctant to
balance be- hand over
tween innova- control of
tion and their networks to
transformation outsiders. Also, un-
thereby putting pressure like application de-
for IT services company. v e l o p m e n t ,
“Today quite a lot of infrastructure man-
companies have started agement is a critical
engaging with mid tier issue where even min-
companies as they are utes of downtime can
looking at right mix in cripple a client’s busi-
In a re-set world
their vendor list, provided they have ness. The ideal route would be to
a good track record. Infinite is rightly start with an onsite model and then
post the recession,
positioned to serve this market,” says move the services offshore, as is
Zutshi. done in the software services indus-
Today, Infinite has emerged as the
old equations of try. However, Infinite has taken this
more people
alternative mid size provider of Ap- route years back and this has given
plication Management outsourcing confidence to its customers.
equalling more
(AMS), Infrastructure Management Today, Infinite’s IMS business is
Services (IMS) and Intellectual prop- gaining momentum and this year
revenues may no
erty leveraged solutions (IP) for sev- IMS brings in close to 16 percent of
eral large clients in telecom, media, the overall revenue. One of the
longer hold true
energy, manufacturing and healthcare major reasons is its strong traditional
verticals. capabilities in IMS like supporting
the back end like servers, switches,
and maintenance of IT applications
Businesses Galore routers, applications and managing
for its clients. Infinite provides vari-
Being a mid-level services company, them remotely. Infinite has a three
ous levels of support and enhance-
Infinite has its presence in multiple year alliance with iYogi, to setup and
ment ranging from handling initial
sectors providing a myriad of serv- manage service desk operations and
service desk queries and correcting
ices, but Zutshi is sharp to realize that also provides L1, L2, L3 support for
application errors, to preventive
having competence in niche areas is iYogi’s clients across the U.S,
maintenance, for both packaged and
the way to go in the long run. Hence, Canada, United Kingdom, Australia
custom application systems. “While
Infinite is focusing strongly on mul- and other geographies in the future.
AMS continues to be our bread and
tiple service lines like AMS, IMS and This business is expected to scale
butter, currently IMS is our key
IP leveraged solutions. between 500 to a 1000 employees
focus, as we have traditional
Having traditionally started as an for Infinite over next 12 months.
strengths in this area.” says Zutshi.
AMS shop, the company today takes This comes in as a catalyst for Infi-
IMS represents a massive $126
care of development, management nite to get more big deals and look
siliconindia
|19|
July 2010
 culture and value imbibed in them by into a ‘great’ place to work. Our this year in India. Zutshi believes that in the U.K., India, Singapore,
the organization. Zutshi beams global headcount as of now is about being a publicly listed company Malaysia and China, thus increasing
Infinite Service Offerings

proudly when he talks about the com- 3800 employees and contractors put brings in additional advantages and its geographical footprint in an ag-
pany’s work culture. The Infinite together, with attrition rate way at the same time pressures of more gressive manner while bagging some
Applica#on Management | Infrastructure Management | Product & IP Leveraged Solu#ons

DNA provides a non-hierarchical below industry average at 8.67 per- expectations of the shareholders- the of the leading global names as its
Service
Offering Telecom Telecom Healthcare Manufacturing

open work environment. “At Infinite, cent, thus strengthening our commit- new owners of the company. clients.
*AMS | PSD | V&V | PDS* Telecom | IT
OCMs SP SP Units

we are proud to offer employees a ment to service,” explains Zutshi. Infinite has expanded its delivery

Celebration of
workplace infused with positivity and centers in India, including its sub-
laced with a feeling of happiness. We The Vision Ahead sidiaries; Infinite currently has five
success at Infinite
Ver#cals Telecom | Media | Healthcare | Manufacturing | Energy & U#li#es

believe that workplace celebration is With Indian IT industry pegged to delivery centers in India – with two

is not only about

Engagement
an opportunity to relive accomplish- grow significantly year on year and in Bangalore, one each in Chennai,
ments – both personal and profes- off-shoring increasingly being ac- Gurgaon & Hyderabad. “Our Corpo-
T&M | Managed T&M | Fixed Bid | Revenue Sharing
Models

employee
sional, providing a platform to cepted, with large global corpora- rate campus in India is housed in
celebrate them is integral to our “In- tions consolidating and reviewing Whitefield, Bangalore in an area of
Service
Shared Services | Offshore Factory | DDC | BOT

recognition, but
Models

finite Spirit” he says. their vendor list, putting higher em- about 4.48 acres. We have also been

Our global
Infinite’s employee recognition phasis on specialization, flexibility, allocated 4.87 acres of land in the
* AMS – Application Management Service | * PAS – Packaged Application Service | IV&V – Independent Verification & Validation | *PDS - Product Development Services

for acquisitions in this space to

also building a
strengthen its presence. program is a combination of both in- agility & focus, with growth in R&D Special Economic Zone (SEZ) in Hy-

delivery model
formal and formal acknowledgement and IMS Services, the market looks derabad for our plans to build a sec-
happy and
Infinite has made significant
of a person’s/teams’ performance, ef- interesting and challenging too. ond campus,” Zutshi says.
and offshore
progress in moving its revenue base to

fun-filled work
IP based revenue sharing model. This forts or business results that support ‘‘In past, several mid-tier compa- Having a legacy in telecom, Infi-

transition
shift is achieved via a combination of the organization’s goals and values, nies have been high on spurge of nite is now also geared to tap oppor-

culture
acquiring customer IP in exchange for where often performance has been growth but have become dormant tunities in the emerging verticals like

methodologies
a revenue share model and their own beyond expectations. Employee after crossing a certain revenue mark. healthcare, energy and utilities. Its
investment in IP creation. recognition is therefore a potent com- Our strategy for long term growth is recent win of the Uttarankhand R-

ensure that
“We are bundling our service of- munication at Infinite, with awards simple. We are looking at engaging As the world-wide industry APRDP project bears testimony of its
ferings to enhance customer time to like the Star Performers, Eagle of the with at least 10-20 Fortune 100 com- moves ahead after the recession and strengths in the utilities vertical,

customers are
service initiation or significantly re- Year, Best Project/ Best Department panies for a long term business rela- the outlook for growth of the Indian where some of the leading Indian IT
Awards, Best Quality Person of the tionship and the rest with mid-sized IT industry looks strong, Infinite is companies dominate. Moreover Zut-
benefited by
duce the operating costs,” says Zutshi.
In this model the company takes own- Year and many others. clients. This will ensure that there is well positioned to grow ahead of the shi is confident that each of the three

off-loading work
ership of the customer IP under a li- Celebration of success at Infinite constant source of revenue in tough industry average. Infinite today has businesses of Infinite- AMS, IMS
censing agreement and provides full is not only about employee recogni- times while we constantly scout for established its presence in most of and IP leveraged solutions, will con-

offshore
lifecycle R&D support in exchange for tion, but is also about building a more business,” explains Zutshi. the large Telecom & IT Services mar- tribute about a third of the revenue
revenue share on the business. This al- happy and fun-filled work culture. I- The latest landmark in Infinite’s kets of the world with offices in the by Fiscal 2014.
lows the customers to better align their verve -Infinite’s Employees’ Club journey so far, has been its IPO early U.S. in multiple locations, as well as As per the Nasscom study, the In-
R&D spend, reduce their risks and In- represents the collective energy of dian IT industry is expected to be
finite in exchange gets a more prof- Having established its compe- the organization. Apart from infusing worth USD 225 billion. This also re-
itable business model. This also allows tence in the telecom services indus- an element of fun and frolic in the flects that this growth will bring in
Infinite Vision, Mission & Values

the company to increase its value of- try, Infinite is now eyeing the remote Company, I-verve also works to- opportunities for mid-size players
fering for customers. The alliance with infrastructure management (RIM) in wards social causes. like Infinite, who have all the requi-
Growth Strategy

Motorola is an example of the new IP the U.S, Europe and Indian markets. Infinite’s other initiatives like I-
• Con!nued Focus on Large Companies
sites in place.
based model. The company expects While currently it serves few key engage, are focused on conceptualiz- Infinite’s business model of focus
• Posi!on Infinite as the Alternate Service Provider

customers in RIM vertical in these

• Differen!ated Business Models & Service Offerings

the share of revenue from this project ing and organizing activities to on areas which are unique and differ-
to be $20 million in fiscal 2010-11, markets, the company is hoping to be deliver engaging and compelling Organic Corporate Governance Inorganic entiated, has helped it grow its net
while starting fiscal 2011-12 this is ex- a major player in this domain in the communication for employees and profit by $4.8 million in the quarter
pected to be upwards of $40 million near future, as companies in U.S. and the community. This initiative facili- ended March 31, 2010.
• Grow our business from • Strengthen &
exisng clients harmonize our Core

Europe are moving from software

People
per year. However, as a large part of tates pro-active conversations be- With veterans at the helm and
Capabilies through

outsourcing to RIM outsourcing to

Acquisions

the revenue will be derived from the tween the employees and their committed associates and well satis-
• Increase focus on new Process
markets by harnessing

India.
• Selec!vely Acquire

sale of Capacity Licenses, which is managers, buddies and mentors. fied customers, Infinite is a trend set-
Global Client-base Revenue Genera!ng
Technology Customer owned

based on growth of customers and the “Our focus on unique people ter for unique engagement model and
IP / Product
• Focus new client

The Work Culture

Infrastructure
messaging usage in the future, the total management initiatives has been en- niche in the IT services market, to
acquision strategy • Acquire Companies to
gain complementary

The true testimonial of a company’s viably electrifying and it’s been our define the way global leaders engage
• Use Dis!nc!ve Offerings to

deal value may be significantly differ-

Skills / Revenue
penetrate new clients
Genera!ng IP

strength lies in its employees and the constant endeavor to build Infinite with vendors in India si
Leadership Team

ent from the current forecast range.

siliconindia
|20| July 2010 siliconindia
|21|
July 2010
 ideas
VC Talk: By Ashwin Raghuraman
The gap between a great idea and
The author is Vice President, India Innovation Fund

Start-up
We come across young teams as

a commercial success is a wide

well as seasoned professionals,
sometimes with prior entrepreneur-

chasm, bridged by the ability to

ial experience. While we love the
young teams because they often

execute.
have the ability to fail, and have the
resilience, flexibility and time to
pick themselves up and give it an-
other shot, the seasoned profession-
als are often preferred for more than
a reason. In youth, it is the norm to We are also still searching for tized successfully. The gap between

to Fund
be hungry. Hunger in a seasoned that elusive B2C model that would a great idea and a commercial suc-
professional is rarer and tempered propel India on to the world map. cess is a wide chasm, bridged by the

We Would Like
with wisdom. The prior success of
these professionals also often means
that their aspirations are on a far
bigger scale.
The reason is simple - B2C is typi-
cally synonymous with scale.
Execution-ability
The execution-ability of an idea is
ability to execute.
It is the successful confluence of
the above enablers that brings an idea
to success and if even one of these is
outstanding, the idea could eventu-

Many a great
contingent on several factors includ- ally be a gamechanger. We therefore
ing the ability of the team to execute invest, not merely in the idea, but in

technology has
in as much as whether the business the potency of these enablers.
environment will allow the idea to The India Innovation Fund is, of

failed to be

A
flourish e.g telemedicine with a rural course, governed by a mandate. In
focus cannot be an executable propo- line with the areas in which the pro-

monetized
sition until the telecommunication moters of the fund viz. NASSCOM
and end device ecosystem in rural and IKP Knowledge Park operate in,

successfully
areas is developed. Many a great ideas in the ICT and the Healthcare
technology has failed to be mone- spaces are where we see ourselves
equipped with the ability to provide

The crux of it
value to an entrepreneur. Further,
spontaneous answer to of start-ups that we encounter are the A compelling value proposition while in most cases, a funds fiduci-

usually lies in the

this question would team, a compelling value proposition with the ability to scale ary responsibility is to its investors,
read “those that would with the ability to scale and the “ex- The value proposition is often re- we carry the additional expectations

business model. Is
generate returns that ecution-ability”. When we come flected in the idea. The crux of it of our promoters – a strategic role to-
would keep us smil- across start-ups, we often wish that "The Secret Life of Teens", a
usually lies in the business model. Is wards the development of the ecosys-

your venture, for

ing”. Deeper thought suggests that
would not be a root cause, but merely
example, building
a symptom. Therefore, if the ques-
tion were to be broad-brushed, the
we could pick different components
from different companies and put
them together to combust – We often
wish we had the luxury that the se-
survey by Harris Interactive
your venture, for example, building tem. Ideas that we would like to
on the online behavior of
fund, would therefore revolve around
water purifiers and selling them, or American teens shows that
is it creating a solution that will sup- the development or advancement of
69 percent of 13-17 year

water purifiers and

ply water to a city if it fails to rain technology and hence, creation of in-
answer would be – “We would like lectors of a World XI have- putting a olds have updated their sta-
for a year. The scale and complexity tellectual property.
tus on social networking

selling them, or is
to invest in ideas that change the way Sachin Tendulkar with a Wasim of the problem and the uniqueness “Imagination is more important
we live our lives today”. If this hap- Akram in the same team. Add Shane sites. 28 percent of teens,
of the solution combine to provide a than knowledge”. What Albert Ein-

it creating a
pens, other things follow.
How do we therefore determine
Warne to the mix, and they mere especially girls, chat with
compelling value proposition. stein stated in the early 19th Century
thought of the combination is heady people they don't know. The
Ideas which are great candidates holds true to the day. The power of

solution that will

if an idea has the potential to change
the way the world lives today? If we
supply water to a
do not wish to play Nostradamus, the
only way to answer that is by evalu-
The Team
We also often wish that we could
merge teams as well. Most often, it
survey, released by McAfee
for funding also those that will seed imagination must however not be
says that 14 percent of teens
viewed in a limited sense, to a great
other businesses. Take for instance admit to having engaged in
Apple’s I-store or Twitter. The num- idea alone, but also, to its application
some form of cyberbullying

city if it fails to
ber of applications and businesses towards the execution. It is the potent
ating the enablers that enhance the is to put together a great set of tech- behavior in 2010. 16 per-
developed by third parties that have combination of a technology idea
cent of 16-17 year old boys

rain for a year.

probability of success of an idea.
The enablers we constantly ex-
plore when we analyze the multitude
nologists with a group talented in
marketing and organization building
skills.
sprung to life on account of these with an imaginative business model
have downloaded x-rated
are testimony to the power of these - and a top class team to deliver - that
content.
offerings. will rule the day. si

siliconindia
|22|
July 2010 siliconindia
|23|
July 2010
Business: By Vimali Swamy
payers now need to provide end-to-
end processes and solutions that
would boost revenues for customers.
Large market segments and buy-
ers are now not increasingly looking
at BPO in synonym with IT, where
their only concern is business out-
come and effectiveness. Hence, it is
no 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 have
realized that they cannot continue
doing what they did in the past,”
says Peter Bendor-Samuel, CEO of
Everest Group. They are looking at
indian BPO partners in their vendors.
With the clouds just clearing
over the U.S. economy, the Europe
indUStRy market is currently undergoing a
slump. Europe accounts for about 30
percent of the IT industry’s revenue,
a Silver Lining with UK contributing 18 percent
and the rest of continental Europe
12 percent. The debt-hit countries
like Greece, Hungary, Portugal, and
Spain contribute a very small per-
I
ahead? centage to the overall revenue of the
Indian IT industry. But most Indian
BPO companies are optimistic about
the euro zone crisis being an oppor-
tunity to deliver high-value work at
low costs.
With cost being an important
f the year that went by was tough, then the BPO sector is surely factor, organizations are looking at
a witness to it. Of all the industries, the BPO sector was per- end-to-end capabilities from their
haps the most affected, especially those in the BFSI sector. But vendors. Emerging utility delivery
as is often said, “Every dark cloud has a silver lining;” the same models such as SaaS, PaaS, and
is true of the BPO industry as well. As the economy grows, the cloud computing will lead the eco-
future seems to have something else in waiting. nomic recovery and most organiza-
A recent study by Nasscom states that the BPO addressable mar- tions are making investments in
ket will be larger than IT by 2020. The market is likely to grow in utilities that are based on industrial-
size from $200 billion in 2010 to $ 980 billion in the next decade. ization, rather than resource-inten-
What is more interesting is that 80 per cent of the incremental sive models. “A combination of
growth is predicted to be driven by opportunities outside the current resource-intensive and industrial-
core markets, verticals, and customer segments. ized approaches will prove success-
Traditionally, the U.S. and the UK have been the strongest markets ful in Europe,” says Ian Marriott,
for BPO since its evolution and they continue to be so. But what has Vice-President – Research, Gartner.
changed is the business outlook. In the past few years the BPO sec- According to Nasscom, the in-
tor has undergone a tremendous change in outlook. From a supply- dustry is moving towards BPO 3.0,
side definition, today it has become outcome-oriented, where the which means value enhanced end-
siliconindia
|24|
July 2010
to-end solutions, shared vision with
customers on driving transforma-
tion, and enterprise-wide cost effi-
ciency. “BPO 1.0 was built upon
cost efficiencies and productivity,
and BPO 2.0 focused on greater
breadth and depth while embracing
the globalization of delivery capac-
ity,” says Som Mittal, President,
Nasscom.
as the market continues to
fluctuate due to incomplete
recovery, organizations
across industries have
realized that they cannot
continue doing what they
did in the past
Business models have also shifted
from being cost-oriented to revenue
models. Customers are looking at
outcome-based engagements, and ‘ef-
fective solutions’ is tomorrow’s
mantra.
With such transformations hap-
pening, being just a BPO company
would not suffice. In times like this
the fort would be primarily held by
companies with both technology and
BPO services.
Despite existing markets in the
U.S. and the UK, analysts feel that
emerging markets hold a promising
future for BPOs, where there is a need
to 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 (process
transformation for productivity im-
provement) are where the opportuni-
ties lie.
The domestic market is another
large driver for the BPO industry in
India. 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, which
is 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 growth
with 16 percent of BPO revenues com-
ing from tier-2 and tier-3 cities in
FY10, and over 5,000 people em-
ployed in rural BPOs. The
BPO industry has con-
tributed to the creation of
4.5 million jobs and also
helped in empowerment
of the youth. 50 percent of
employees are below 25
years of age and women
constitute 45 percent of all
employees and 50 percent
of new entrants. 63 per-
cent of companies employ
the differently abled.
The Nasscom study
that was co-authored by McKinsey
India adds that the current economic
slowdown is a path to revival for BPO
companies. “In a sense, the slowdown
has given them a chance to get their
costs back in line. Companies need to
move up the value chain and go into
non-traditional areas such as telecom
and the government which have a lot
of opportunities,” he adds.
The study says that the total ad-
dressable market for the BPO indus-
try is $630 billion. To achieve this, the
industry will have to gear up for mul-
tiple challenges, especially for com-
petition from other countries such as
China, Vietnam, Brazil, and Egypt,
among others.
The exports revenues is expected
to expand more than four fold and
reach $50 billion by 2020, while the
growth in domestic revenues is ex-
pected to expand seven fold to reach
$15-17 billion during the same
time. What remains to be seen is how
far the Indian BPO industry would be
able to prove its mettle in the promis-
ing future. si
siliconindia
|25|
July 2010
 T
Business: By Sudip Saha
The author is Senior Analyst, Springboard Research
he Indian domestic market is going
through a crucial transformational
juncture 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 few
years back, the domestic business opportunities
did not even figure on the agenda of Indian ITES
companies. However, recession in the U.S. econ-
omy and the domestic IT/ITES sector’s re-
silience helped the market to earn a respectable
position in the strategy roadmap of IT/ITES
Expansion of Domestic BPO Companies
Into Smaller
service providers. At
a time when compa-
nies are developing
strategies to tap the
missed opportunities in
the domestic sector,
siliconindia
|26|
July 2010
the market is witnessing intense interest from
customers as well as outsourcing services
providers that are not only based out of India,
but are also players at a global level.
The key factors which will continue to fuel the
growth of Indian BPO market are:
 According to IMF forecast, the Indian econ-
omy will continue to register a healthy GDP
growth of over eight percent for the next
five years. To keep pace with such an expo-
nential GDP growth across the economy, the
Indian companies need to concentrate their
Cities, a Boon
focus on their core competencies while
leaving IT/ITES in the hands of third party
IT service providers.
 Another key reason driving the growth is
the increasing globalization. The Indian en-
terprises are pursuing their dream to get
global; as these companies intend to expand
their presence across the world, they will
need to inherit the global best practices
where the ITES services will come handy
for them.
 The number of service providers having
end-to-end capabilities to provide outsourc-
ing services has increased over the years.
This growing number of vendors, along
with increasing maturity of Indian enter-
prises towards benefits of availing out-
sourcing services, will act as a catalyst for
the growth of the domestic IT market.
 A steep decline in the connectivity
costs is gradually building new busi-
ness models that will be able to meet
the rising customer demands and the
service level agreements.
The domestic BPO opportunity is
scattered into a number of verticals;
whilst telecom and banking were the early
adopters, currently constituting over
60 percent of the total pie, some other
emerging verticals include govern-
ment, aviation, healthcare, retail,
transportation and logistics, and
media.
From a service line perspective,
the domestic BPO market is following
the same curve as that of BPO export
market to move up the value chain.
The service lines are evolving from
being predominantly voice based to a
mix of voice and non-voice services.
Moving forward, in the next 2 to 3
years, opportunities will not only be
limited to back office process aug-
mentation, but will also be extending
to processes through which enter-
prises will be able to reap the benefits
of economies of scale along with a
single window view of all processes
across locations and business units.
However, the challenges that remain
are insufficient processes and stan-
dardization approach within the
buyer’s organization. Also, fear of los-
ing control continues to be an in-
hibitor for the next generation growth
of the domestic BPO market.
According to Springboard Re-
search, the Indian domestic BPO mar-
ket was estimated to be $2.6 billion in
2009 and is expected to be a $5.8 bil-
lion industry at the end of calendar
year 2010, registering a faster growth
rate than the export market. Currently,
close to 75 percent of the industry is
captive in nature while the remaining
25 percent is with the third party BPO
service provider. As the industry ma-
tures, the Indian domestic market is
witnessing increasing consolidation
activities for the past few years. After
the economic downturn, many com-
panies are wary about continuing with
their captive center operations in India
and thereby started to pull out their
well-established captive BPO invest-
ments. Over the last couple of years
several large captive centers, includ-
ing Deutsche Bank, Citigroup, and
more recently UBS, have pulled out
of their BPO business. Despite the panding their horizons beyond tradi-
fact that cost structures of captives are
tional metro cities. This provides en-
typically higher when compared to terprises with ways and means to avail
third party service providers, there aremultilingual skills as well as taking
certain benefits like protecting confi- advantage of lower cost of operations
dential information in-house. How- like rents and salaries. However, this
ever, the domestic third party BPO is not an easy task as massive public-
companies are using this opportunity private partnerships in education and
training is needed to re-
duce the gaps in the skill
BPOs have a great scope of future levels in the tier-2 and
growth as the Indian economy will tier-3 cities. This has re-
sulted in the emergence
continue to register a healthy GDP of rural BPO model,
which was well received
growth of over 8 percent for the
among the vendors. In
next 5 years addition to overcoming
the language barrier, this
to acquire captive centers to build model has also helped to reduce cost
scale and for acquiring new technolo- of operations and managing the attri-
gies, particularly to increase geo- tion rates.
graphic reach as well as to inherit new Going ahead, adopting the right
capabilities. business model will determine the
The key challenges for the domes- success of individual vendors in the
tic BPO market are almost similar to marketplace. Trends like ‘moving
those in the export segment. They in- from CAPEX to an OPEX based ap-
clude rising operating cost, lack of proach’ will get traction in the mar-
skilled man power, and absence of an ketplace, as clients will necessarily
industry ready curriculum along with pay only for usage and will not have
high attrition rates. To address these to worry about payment for licenses.
challenges, the companies are ex- Various other business models like
‘transaction based’ or ‘outcome
based’ are emerging in the overall
ecosystem. All these models are
playing a vital role in expanding the
market as well as becoming a strate-
Software as a Service (SaaS) gic ploy in the Indian outsourcing
would have a role in the business.
future of IT but not a With maturity of the domestic
dominant one as was market, the customers’ requirements
thought earlier, according are changing very fast and vendors
to IT research and advisory will need a great degree of customiza-
firm Gartner. In 2009, tion and understanding to be success-
within enterprise ful in this front. They will need to
applications, SaaS think ahead of the curve on business
represented 3.4 percent of total models, pricing, and have to build in
enterprise spending, slightly up capabilities that cater to the Indian
from 2008 at 2.8 percent, market. Profitability is the other area,
which shows that there is no which will be determined on the ven-
major change in terms of the dors’ effectiveness in delivering by
demand for SaaS. way of cost structure, people manage-
ment, and value creation. si
siliconindia
|27|
July 2010
Business: By Gopi Natarajan
The author is CEO, Omega Healthcare
healthcare
a ChaLLenging yet PROMiSing
MaRKet fOR india
T
Over the next
he recent healthcare
3-5 years about
reforms announced
in the U.S. have ar-
40 million
guably been one of
the most oppor-
Americans will be
tunistic business areas that In-
dian services industry can look
newly added to
forward to. While the quality of
healthcare in the US is ar-
the insurance
guably one of the best in the
world, the administrative as-
system, increasing
pects of the industry is by far
the most complex and difficult
administrative
to comprehend systems and
processes in the world. The
complexity that
healthcare industry currently
represents about 12 percent of
will lead to a swell
the US GDP and is expected to
reach close to 15 percent over
in manual work
the next 7-8 years. Tradition-
ally, the administrative side of
the healthcare industry has
siliconindia
|28|
July 2010
been termed the laggard when
it comes to technology adop-
tion, and the IT spend is esti-
mated to be about two percent
of revenues compared to the fi-
nancial or banking industries
where it is about 8 to 10 per-
cent.
Trends
There is a major reason why
technology adoption is difficult
in the administrative side of the
healthcare industry; it is the
regulatory complexities in-
volved. Most IT companies
have found it difficult to build
systems that are able to handle
the ever changing federal, state,
and private insurance regula-
tions. There is a lot of work
that has to be done manually in
order to keep the monies flowing
between the various con-
stituents. While this trend has been
changing over the years, it will still
take a very long time for systems to
catch up and replace the amount of
manual work that will always be
needed.
It is anticipated that over the
next few years the amount of data
entry work will probably reduce, as
systems get more sophisticated and
data transfer between the various
systems become more seamless. Re-
gardless of this, the need for value
added services like medical coding,
insurance follow-up, collection ac-
tivities, and claims adjudication
services will continue to in-
crease. The healthcare reform pack-
age recently announced by President
Obama, which is considered the
most sweeping change in the indus-
try since the Medicare changes in
the 1960’s, has some challenges to
overcome in terms of financing the
various programs and reforms that
have been announced.
In any event, some form of the
reform is much needed in the indus-
try and will go into effect only over
the next 3 to 5 years, and will add
more than 40 million Americans
(who currently don’t have insur-
ance) to the insurance system. This
will increase the magnitude and
scope of the administrative com-
plexity, thus leading to more manual
work that has to be performed. In
addition, the US has mandated that
the entire industry move from ICD-
9 (International Classification of
Diseases) to the usage of ICD-10
codes throughout. This move to the
ICD-10 coding system is forecast to
be as big as the Y2K opportunity.
Thousands of companies in the in-
dustry will have to make changes to
their systems and processes to ac-
commodate this transition. For ex-
ample, there is a total of over 16,000
ICD-9 codes while the number of
ICD-10 codes are about 64,000 and
more.
Challenges
The opportunity for IT and services
outsourcing companies in the US
healthcare industry is bound to in-
crease over the next few years. As
the US economy slowly recovers,
companies will look to get more ef-
ficient and profitable leading to in-
creased usage of offshore
resources. A lot of entrepreneurs and
The risks of leaking out sensitive
information and its negative
effect on the future of the entire
industry is a serious issue to be
dealt with
Indian companies understand that
the US healthcare industry is stable
The Zinnov Management
research shows that
Software-as -a Service
(SaaS) would touch $650
million in 2015.Services like
Platform-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 IaaS
to bring out the hidden
market potential.
and fairly recession-proof and the
huge opportunity they foresee
makes them too eager to get into the
industry. Therefore, they tend to get
into undesirable business practices
like arbitrarily lowering the pricing
and paying more for labor in India,
in effect squeezing the margins and
jeopardizing the long term viability
of the services industry from a qual-
ity perspective.
Security of information is ex-
tremely important when servicing
the US healthcare industry and a lot
of companies in India do not under-
stand the risks associated with sen-
sitive information leaking outside
and the negative effect it will have
on the future of the entire indus-
try. Servicing the US healthcare in-
dustry properly will require a good
amount of capital investment up-
front to set up the proper infrastruc-
ture. Serious entrepreneurs should
be cognizant of this, if they are in it
for a long haul. The other challenge
will be to find good talent in India
to provide the services, especially
the voice based ones as this requires
not only good English communica-
tion skills but also very good ana-
lytical skills.
In summary, while the opportu-
nity remains huge for the healthcare
outsourcing industry in India and
can grow 20-fold from where it is
today, it will happen only if we col-
lectivity provide a lot of value added
and high quality services. si
siliconindia
|29|
July 2010
 Payroll
Business: By Vishwanathan K A
Managed
The author is Head – BPO, Ramco Systems
Time and Resources
People Process
Subject matter expert Query Mgt
Supervisor Compliance
Validator Procedure
Training - S/w version changes
Processing
- -
Payroll is mostly ‘policy’ driven and

partly ‘statutes’ driven: The business
rules of an organization determine the
E
apportionment of the various compo-
nents of the payslip. These business People usually miss the opportunity and the
rules are susceptible to changes due scope ‘payroll processing’ provides as an im-
to various factors - competition provement area and its contemporary align-
changing the rules, aggressive growth
trajectory of the organization, or it
ment to overall business objectives
can also be based on demands of the
various stakeholders. These rules are
merging businesses are faced with tough challenges in terms of people management,
very specific to the organization; a
process improvement, and quick technology adoption. They are looking for contin-
simple example could be the incen-
uously redefining their competitive advantage, strengthening the delivery of their
tive calculation for a manufacturing
value proposition in the market place and improving the overall organizational po-
industry and a FBP (flexible benefit
sitioning vis-a-vis its peers. The role of HR in such organizations is becoming more
plan) for aservices industry.
strategic than operational. With aggressive business growth, HR heads need to build in scalabil-
Payroll processing is also af-
ity of HCM (Human Capital Management) processes in their long-term strategic plans.
fected by periodic statutory changes
Payroll processing, which is primarily managed by HR department in most of the organiza-
but they are far less complex in na-
tions, offers a great scope for process improvement and cost reduction. Realizing this potential,
ture as compared to the policy driven
some of the emerging businesses in the telecom, IT, ITES, and even manufacturing sectors have
issues. But statutes driven changes
outsourced this to experts so that they are able to focus on issues more strategic in nature. This
impact the competition also in equal
trend is catching up and the inherent complexity of payroll processing is making this ‘next-gen
measure and hence the overall effect
HR move’ a reality, quite sooner than anticipated. Current Issues Faced by Organizations in Pay-
is minimal.
roll Processing
Organizations having multiple
locations have to make investment in
resources to take care of the actual fil-
ing of compliance related procedures.
This resource is expected to manage
the relations with the local statutory
office personnel and also be able to
understand the periodic changes in
regulations.
An in-house team will find it
very difficult to make rapid changes
in the payroll processing arising out
of policy or statute changes, as pay-
roll is construed as a non-core activ-
ity.
Growth plan for payroll processing

personnel: In most of the organiza-
siliconindia
|30| July 2010
 Lack of process innovation: Payroll
Technology
Infrastructure
Storage
Communication
Technology
tions the internal resources working
on payroll processing do not have a
career plan to look forward to. Due to
the complex nature of payroll pro-
cessing, their knowledge is indispen-
sable to the organization and
movements to other internal openings
are not encouraged. This leads to sud-
den attrition and an open vacancy,
which becomes difficult to fill as the
expertise specific to company busi-
ness rules is built over a time (big risk
factor) and is available only with the
individual.
A study done by Forrester
Research on top technologi-
cal companies like Mi-
crosoft, Dell, HP and IBM
shows that internal IT is not
mentioned in the reports.
Merely I6 percent of the
CEO’s mention about IT in
their reports. Forrester's
concept of Business Tech-
nology suggests that a com-
pany should focus on at
least 10 to 15 IT projects
rather than focusing on
hundreds at a time.
processing is overlooked by organ-
izations for improvements as gener-
ally no problem is reported on the
overall delivery mechanism. Em-
ployees are also happy to get used
to the existing process issues with
their focus set more on the value of
the payslip. The point to be con-
veyed is that simply everybody
misses the opportunity and the
scope ‘payroll processing’ provides
as an improvement area and its con-
temporary alignment
to overall business
objectives. People
are the most impor-
tant assets of any or-
ganization and
ensuring timely de-
livery of error-free
payslips can add to the satisfaction
at the workplace.
 Technology: Organizations use pay-
roll application, which is a standard
or customized solution provided by
a vendor or a third party
service provider. In either case, up-
grades call for investment which man-
agement is unwilling to make as payroll
processing is not viewed as critical. De-
pendence on software service providers
is high and further investment is diffi-
cult to justify in terms of ROI. End re-
sult: Legacy rule continues.
Way Forward ….IP3 Framework
Service Providers
IP3 (Infrastructure–Product–Process–
People) framework deployed service
provider are the best fit service
providers for the above issue. World
over, Ramco are among the very few
companies who have the IP3 frame-
work advantage. This framework helps
organizations to switch models; from
BPO to licensing to hosting. The switch-
ing model gives flexibility to an organi-
zation to decide on the ‘right solution’
within its budget without compromising
on the quality of delivery. si
siliconindia
|31|
July 2010
 Lending
Business: By Ashwini Kumar
The author is Lead Consultant, Finacle,
Infosys Technologies
Rescue Measures
A Conundrum
T
he world is now seeing an
unprecedented weakness in
lending flows - be it mort-
gage lending or unsecured
lending. A silver lining in a
rather gloomy market condition is that
in the current year financial institutions
are witnessing a marginal growth in their
business and not a decline as was seen
in 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 a
value of $32,750 billion by 2013, an in-
crease of 19 percent since 2008. Mort-
gage lending dominates the market with
just over 80 percent of the market share
in value terms and America accounts for
50.4 percent of the global market value.
The measures taken by Americans to re-
vive the mortgage portfolio are closely
watched as their revival is key to reverse
the present sagging sentiments.
There are largely two main players
in the act of revival - government and
regulators. The actions of these players
would help the industry and economy
turn around. There is no one best solu-
tion for the problem and the problem it-
self is not the same in all countries; and
so each country adopts a different strat-
egy to address the crisis. Secondly fi-
nancial institutions, anticipating the
reactionary behavior of these players,
will survive and emerge as leaders in the
long term.
siliconindia
|32| July 2010
Some Measures for Re-
vival of Economy
Deposit insurance is one
such special measure for re-
vival, and as a concept it is as old
as banking. Deposit insurance helps
prevent run on banks and thereby in con-
trolling the short term liquidity crisis.
Major economies have raised the limits
on the deposit insurance to boost the in-
vestor’s confidence to stem the runs on
the banks.
Stock markets are the pulse of fi-
nancial markets and the barometer on
the health of an economy. The positive
sentiments of the stock market help in
improving the general sentiments in an
economy. Restrictions in short selling
are 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 are
skewed with delinquent assets portfolio
on one side and on the other they do not
have the capital to sustain lending.
Banks’sources of funding have dried up
as investors have lost confidence, and
hence the governments are stepping in
to 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 the
government has introduced a debt guar-
antee scheme wherein, based on the
gov-
ernment guar-
antee, the
banks get additional
funds to source their tier-1 and tier-2
capital requirements from the market.
Asset purchase of the banks im-
proves the liquidity position. There are
two implications, in case the purchase is
higher than the book value it results in
shoring up the capital, and in cases it is
below 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 the
portfolio of assets of the bank. Thereby
the creditors do not withdraw funds as
they are covered from risk of default.
Nationalization is the harshest meas-
ure to shore up the confidence of in-
vestors and depositors and boost their
sentiments. This measure is adopted
only when the failures of such banks
have very high impact on the financial
system and the government anticipates
that it may lead to chaos and mayhem in
the financial market circles.
Regulators play an important role in
bringing back trust and buoyancy in the
economy. Recessionary periods are
challenging times for regulators, on one
hand they need to encourage banks to
lend and on the other they need to en-
sure that there is no further deterioration
of asset quality. In addition to the special
measures, other measures usually taken
at macro and micro levels by regulators
are:
Stabilizing interest rates

 Stricter guidelines on exposure to
single line and segment of busi-
nesses
 Greater mandatory disclosures and
scrutiny of their businesses and
practices
 Moving away from the regime of
self regulation and voluntary disclo-
sures for financial institutions
 Regulating the entry of new banks
 Strengthening corporate governance
and 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 supporting
the immediate funding requirements of
the banks they ensured that the trust was
not lost and there were no unprece-
dented defaults. These were important
short term measures, but for the finan-
cial system to sustain and operate inde-
pendently it requires infusion of long
term funds.
The central banks have provided
debt guarantees to usher in long term
funds, though this is not a sustainable
funding mechanism. Private equity in-
vestors have been the source of long
term funds for the banks for a long time
now but they weren’t forthcoming to in-
vest more, fearing the potential undis-
closed losses. These guarantees may not
hold water in the long term unless dis-
closures are complete.
Impaired asset portfolio manage-
ment is one other area that has brought
sleepless nights to regulators. The regu-
lators came up with special measures
such as providing insurance for losses
or purchase of assets. Secondly, guaran-
teeing of debt by government may not
work, as sovereign ratings of many
countries have fallen.
We have seen the various measures
taken to revive the economy; however,
the outcome of all these measures on the
lending behavior and their impact on
various economic factors governing the
growth of economies such as budgetary
deficits and fiscal structures are to be ob-
served.
There is no one best solution for the problem
as it is not the same in all countries; and so
each country adopts a different strategy to
address the economic crisis
Budgetary deficits are expected to
rise; however, controlling the interest
rates becomes very important. The coun-
tries having healthy public debt finances
will come out of the woods earlier than
others. India is projected to have a rea-
sonable budgetary deficit of 6.8 percent
at the end of the year as against a 12.3
percent budgetary deficit in the U.S..
This shows that economies such as India
would come out of the recession faster
than many other developed nations such
as the U.S..
Secondly, some fiscal measures
such as tax cuts may be taken in the
coming year, resulting in stimulating
the demand of the household sector.
This could potentially increase the dis-
posable income in the hands of the con-
sumers, but in the current market
conditions consumers have limited or
no access to credit, which causes them
to hoard cash. To encourage savings
consumers can expect, as a one time
measure, lenient approach by banks on
lending to individuals based on credit
ratings and providing them with access
to credit.
In the long run, the challenge will
be for the government and regulators to
withdraw the stimulus packages that
are being offered to the financial insti-
tutions. The timing of this exit is as im-
portant as its beginning; it cannot be too
early as that may lead to recurrence of
the problem and cannot either be too
late since the continued dependence of
financial institutions on the stimulus
packages for their survival would be
disastrous for the system.
All the funds that are being pumped
into the market are to stimulate demand
and provide temporary resources to
banks to lend. Presently, the banks are
not being forced to take losses on the
balance sheet and dispose a delinquent
asset, which means that the results
shown by them in the ensuing quarters
may not be a true depiction of their fi-
nancial status. This is one of the main
concerns of the investors: undisclosed
delinquent assets and this, in the near
term, may lead to stagnation. It is very
interesting to watch the effect of these
and the counter measures the govern-
ments will take to address this problem
in the long run.
The present economic situation
will trigger mergers and acquisitions
in the financial services sector in the
near and medium terms. We have not
seen much of M&A happening in the
recent past as the banks and govern-
ment have adopted a policy of wait
and watch. It is a matter of time before
we see this happening.
To conclude, the effects of the meas-
ures will vary based on time, country,
and overall sentiments. A sustainable
measure would be to create separate in-
stitutions to handle such assets and fund
them directly and or through consor-
tiums. Consumers and businesses
should expect further monetary and fis-
cal measures coming their way to make
this turnaround a reality. Banking is the
backbone of global economy and will
not perish on account of cyclical
changes but will only bounce back with
greater resilience. si
siliconindia
|33|
July 2010
Technology: By Kiran Datar
The author is Managing Director, Cisco WebEx India
On-demand vs On-Premises
Collaboration
A
s collaboration gains
adoption within enter-
prises of all sizes, it’s fast
becoming a valuable tool
for the productive knowl-
edge worker. Organizations now recog-
nize the compelling value of interacting
any time and anyplace with peers, cus-
tomers, and partners, and seek to round
out their collaboration solutions with in-
tegrated instant messaging and asyn-
chronous workspaces as well as
on-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, then
a mandate. Extending the ability of em-
ployees to reach global colleagues, cus-
tomers, and partners via a hosted
collaboration model ensures that produc-
tivity will increase substantially.
The evaluation and final decision for
choosing between a hosted service or an
on-premise, self-managed model usually
falls 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, not
just the purchase price.
siliconindia
|34|
July 2010
Organizational Requirements for
Hosting Collaboration Solution
Deploying a full-featured collaboration
suite that addresses the needs of several
departments calls for a single point of ad-
ministration. Because IT frequently ad-
ministers collaboration, well-architected,
managed solutions requiring minimal
time and resources are favored. The table
below represents the typical short-list for
selecting a collaboration solution.
Comparing Technologies of Hosted vs
On-Premise Collaboration
The architecture of any software deliv-
ered as a service has commonalities that
transcend applications. On-premises so-
lutions are generally chosen to provide a
sense of tighter security to the organiza-
tion at the expense of reach and costly IT
support — both of which are of para-
OrganiZaonal Need IT Issue
100 percent service access No downtime
Ease of use Minimal support
Good performance Performance complaints
Confidentiality of information Information security and privacy
Loss of time, data, setups Crashes, interruptions
Expanded use as a result of growth More stuff to manage
Global reach Connectivity
ROI Usage monitoring
mount importance
to the company. On-demand services
provide intense, standards-based security
shielding without compromising reach.
With service monitoring available to col-
laboration administrators, the company
relying on hosted solutions need only
manage access. In the case of an on-
premises system, there is regular soft-
Soluon
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 fiber
Self-service monitoring, Back-end stats
w a r e scaling is absorbed by the service
change provider. The service is always
control, over-provisioned in order to have
plus server capacity available, and there are no
and net- additional IT costs for adding users.
2. Reducing network congestion and
maintenance
An on-premise solution requires
that all network congestion, appli-
cation provisioning, and bandwidth
management be handled by IT and
telecom services within the enter-
prise. This may involve firewall fil-
tering, Access-Control Lists (ACLs)
in routers, and other network infra-
work provi- structure configuration and moni-
sioning that toring exercises. In the on-demand
come into scenario, all of these issues are man-
play both in- aged as a service.
ternally and ex- 3. Assisting users
ternally. As collaboration usage grows in the
An im- enterprise, hosts and attendees often
portant ask for assistance. This support is
distinc- more readily given by the service
tion be- provider that maintains over-provi-
tween sioned customer service resources.
hosted This eliminates the bottlenecks nor-
and on- mally associated with internal IT
premise col- teams fighting fires in favor of a
laboration is that scalable, 24x7x365 support team,
both collaboration and conferencing that’s well trained and ready to
have attained ‘utility’ status due to wide- move users forward.
spread adoption in everyday business
processes. Providing such a communica- The Checklist for CIOs
tions utility, not only internally, but also There are several important items to
externally — tying partners, customers, consider when evaluating an on-de-
and remote employees together — could mand collaboration solution vs an on-
place a huge burden on IT staff. These premises one, including:
features will persist in addition to meet-
ing expectations for service, perform-  How much work will my IT teams
ance, and privacy. have to perform?
 What will the support desk impact
Three Major Concerns among CIOs be?
1. Scaling up the number of sessions  How do I scale the solution when
In the on-premise case, scaling in- my organization grows?
volves adding servers and increas-  Will the service provider be more
ing IT headcount. The additional reliable than a self-built, on-
hardware cost plus the capital ex- premise solution?
pense and incremental IT headcount Do a global network and dedicated

create a stair-step increase in cost. backbone make a difference for my
In the on-demand case, the cost of worldwide operation?
Conclusion
Hosting and on-premise collabora-
tion both provide great benefits for
organizations needing to connect
with global partners, customers, and
employees. Each approach has asso-
ciated requirements that weigh
against benefits, but are tempered by
cost. Organizations must weigh the
value of a solution by balancing the
total cost of ownership against mis-
sion-criticality and the timing of re-
turn on investment.
Time, then, becomes the most
valuable commodity, followed
closely by IT resources. How much
time is required to deploy? (IT ef-
forts) How long before users adopt
the solution? (Training ramp-up)
When will we experience process
time reduction? (Adoption and pro-
ficiency) How much downtime will
we experience? (Availability, scala-
bility) How quickly can problems be
resolved? (Support, service) Will
communications remain totally pri-
vate? (Security, threat detection).
Quantifying people’s time shows
clearly the costs with which IT must
contend. Knowledge-workers who
use the collaboration system consis-
tently and proficiently will attain
rapid benefits through accelerated
results and abbreviated business
process.
The on-premise approach will re-
quire significant upfront and ongoing
efforts by the IT and training depart-
ments. The hosted, on-demand ap-
proach alleviates these efforts and
shifts the responsibility and resource
expenditure onto itself, freeing the
organization to realize the benefits of
widespread collaboration use across
all business processes. With a multi-
tenant architecture, dedicated global
network, and highly available serv-
ices designed to scale to a large num-
ber of concurrent users, the hosted
service provider will deliver a return
on investment much faster than an
on-premise solution. si
siliconindia
|35|July 2010
Technology: By C.V. Narayanan
The author is Head - Managed Testing and
Web Technologies, Sonata Software
Testing, the
C
‘Cloud’Way
The Promise of the Cloud
loud computing is ac-
tively revolutionizing the
traditional IT landscape. It
is all about paying only
for what you consume. It
is a legitimate way for companies to sig-
nificantly lower costs of infrastructure
while increasing scale of operations.
Cloud computing promises to in-
crease the speed at which applications
are deployed, foster innovation, and
lower costs, thereby increasing busi-
ness agility. Forward-looking compa-
nies are now looking at this model to
reduce infrastructure costs and simulta-
neously increase computational capa-
bilities. Gartner has predicted that cloud
computing will be the top most tech-
nology area IT should concentrate on in
the year 2010. Compared to the begin-
ning of 2009, the cloud computing
landscape now is very different with a
huge potential to change the face of IT
siliconindia
|36| July 2010
for ever. Over the next five years, IDC
expects spending on IT cloud services
to grow almost threefold, reaching $42
billion by 2012 and accounting for nine
percent of revenues in five key market
segments2. More importantly, spending
on cloud computing will accelerate
throughout the forecast period, captur-
ing 25 percent of IT spending growth
in 2012 and nearly a third of growth the
following year.
Several variables like multiple browser platforms and
versions, operating systems, and hardware in cloud
computing make comprehensive cloud testing necessary
and one-size-fits-all approach would not work
Businesses today require a fast, re-
liable, and secure IT infrastructure to
flourish. Small and medium enter-
prises are generally unable to meet the
huge capital outlay that such an IT
setup requires. Therefore, these organ-
izations generally opt to migrate to the
cloud, especially since it enables them
to focus on their core activities, in-
stead of worrying about maintaining
their IT infrastructure.
The Role of Testing
Migrating to the cloud has its own set of
challenges and risks such as data in-
tegrity, security, privacy, reliability, scal-
ability, business acceptability and
manageability, which can be mitigated
through adoption of additional proce-
dures. To overcome these challenges,
thorough testing of applications be-
comes mandatory. Traditional methods
of 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 interoperability
testing
 Disaster recovery testing
Several other variables like multiple
browser platforms and versions, operat-
ing systems, and hardware further com-
plicate the situation. It is evident that a
one-size-fits-all approach would not
work 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 be
understated.
With the scope for cloud computing
increasing, there is a spike in demand
for cloud testing as well. As software
applications become more critical for
business changes, the software devel-
opment process is becoming more agile,
distributed, and non-cohesive. This,
along with the emergence of a global
delivery model, has resulted in smaller
distributed teams operating independ-
ently for development, testing, and in-
tegration. To support this kind of
development processes and the need for
continuous testing, organizations spend
a major part of their budgets in setting
up test environments and automated
tool licenses. Cloud testing leverages
cloud computing resources to increase
testing functionality and significantly
decrease costs. The biggest saving on
account of testing in the cloud is
achieved through the conversion of cap-
ital expenditure (capex) to operational
expenditure (opex). Huge initial invest-
ments in building capacity are replaced
with need based sourcing of infrastruc- computing. A key attribute of cloud
ture, quality tools, and human resources computing is how it changes econom-
leading to multi-tenant, efficient, and ics. You only pay for what you use, and
certain utilization. With cloud testing, rates are typically lower than the equiv-
enterprises have unlimited resources at alent cost of building and supporting
their disposal, paying only for what they these services internally. There is a
consume, only when and if they con- growing trend towards cloud enable-
sume it. ment of applications or hosting applica-
tions on the cloud, but
Cloud testing leverages cloud stand the risks associated with it
companies also need to under-
computing resources to and adopt proper mitigation
increase testing functionality plans, the core of which is test-
and significantly decrease ing. The above model also
works well for businesses that
costs are not clear about the business
model by reducing the entry
barrier. This provides a great value for
Cloud testing is practiced in the industry customers who can consume these
in two ways: products and services at a reasonable
price point.
Testing cloud: This is to perform Cloud computing represents a shift
testing of the applications, which have towards delivering dynamically scala-
migrated or are to be migrated to the ble IT resources as services over the In-
cloud so as to ensure that their perform- ternet. These services typically share
ance, security, and reliability match or some key attributes, such as elasticity,
exceed expectations in view of the resource sharing, multi-tenancy, self-
changing delivery methods service, and pay per use. Three types of
services can be delivered via Cloud
Testing using the cloud: The second Computing:
one is to leverage the cloud-based hard- l. Software as a service (SaaS)
ware infrastructure and computing re- 2. Platform as a service (PaaS)
sources to perform traditional testing 3. Infrastructure as a service (IaaS)
like function, performance, load, stress,
security, and compatibility testing for In addition, there is the concept of pub-
regular, on-premise applications lic cloud and private cloud. All these
Both the approaches enjoy wide- kinds of clouds need different types of
spread popularity, and there are numer- testing, as traditional testing is not suf-
ous vendors and service providers who ficient in a cloud environment. Enter-
are providing these types of platforms prises need to have a better
and services to both consumers and or- understanding of the way different types
ganizations. of cloud work, how they impact busi-
nesses and which testing approaches
Testing Cloud should be used for them. They need to
One of the most common statements adopt an end-to-end testing approach,
made by experts about cloud computing starting from requirements to deploy-
models is that somehow the economic ment, because each stage has different
crisis of the last few years is pushing en- testing requirements.
terprises to use cloud to save money on
IT operations cost. Tightening budgets Testing Using Cloud
have opened the minds of enterprises With the availability of massive cloud
everywhere to the possibilities of cloud infrastructure (servers / load farms)
siliconindia
|37|
July 2010
 Business: By Pradeep Chennavajhula
around the globe, some companies have
started leveraging them for conven- Funconal Tesng
tional testing activities, the most promi-
nent one being Performance Testing of
At the first level System integration testing and user acceptance testing needs to be carried out to ensure
the developed cloud meets functional and business user needs.

Web applications using cloud infra- Non Funconal Tesng

structure. Prominent tool vendors are
also aligning with this business model
Software testing
Performance Testing Performance Testing including load and stress have to be carried out ensure the

S
to provide the tools using cloud.
developed cloud is scalable and meets end user performance requirements

Performance testing is usually asso-

Security Testing Security Testing is very important for a cloud environment and has to be

ciated with huge capital expenditure due the next Big employment Wave
performed to ensure application and data integrity.

to investment on tools, infrastructure,

Compability & Interoperability Tesng

and resources. Moreover, with the in- oftware testing industry is gearing up to be one with high growth
potential, and the inequality in supply and demand of talent makes
There are two angles to this. First ensure the developed cloud works on multiple environment like browsers,

crease in the number of concurrent

OS and other software and hard ware platforms. Second to ensure the developed application is compatible

users, the costs of tools also increase ex- it the next wave of employment growth
with different cloud platform providers like Amazon and Go Grid.

ponentially. Due to this, most compa-

Disaster Recovery Tesng
nies do not test applications for the According to Gartner, independent end-to-end testing projects and the riculum that teaches enough and that
expected number of users, resulting in testing as a business globally is average deal sizes are around $2-4 includes relevant topics that are cov-
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

their poor performance and huge in- growing at 40 to 50 percent and million. ered in depth. In addition to devising
Different Types of Testing during Cloud Enablement
to emergencies.

vestments on building capacities.
However, by leveraging cloud in-
frastructure, companies can eliminate
the investment on infrastructure and
tools. Additionally, it also provides for
geographically distributed loads, which
are similar to a real-world situation,
rather than tool-simulated loads.
To sum up, the benefits of testing
using 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 services
providers in the industry today that
offer solutions for both testing of
cloud and testing using cloud. To offer
such services, companies need a deep
understanding 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 Ahead
Cloud computing became a buzzword
even before it was defined. It’s a game
changer in the way applications are de-
livered, managed, and integrated. With
increasing focus on cloud computing
technologies, cloud service providers
need to equip themselves with the nec-
essary capabilities in order to meet the
demands for cloud testing. The impor-
tance of cloud testing is highlighted by
a study conducted by the research firms
The 451 Group and ChangeWave in
which 1,771 corporate software buyers
out of the 2,000 surveyed listed appli-
cation testing and development as one
of the top five uses of public clouds. Al-
most all Indian IT providers are ramp-
ing up competencies in the overall
cloud computing space by forging part-
nerships with cloud providers like
Amazon, Microsoft, Savvis, Vmware,
and Google. These hosting and plat-
form-based players themselves are
being extremely proactive in pushing
cloud-based deployments and are part-
nering with service providers to deliver
end-to-end solutions. Analysts and
technology advisory firms are of the
opinion that the number of applications
and the amount of content in the cloud
now available to both consumers and
corporations have grown to a critical
mass and cloud computing is the way
to go. A cloud computing based IT
services model would make all the
more sense for small and medium-sized
enterprises and would be an example of
business model innovation that will set
a new precedence in the IT industry.
Cloud computing is clearly worm-
ing its way into the enterprise, espe-
cially as a testing and development
environment and as a platform for less
than critical applications and services.
Organizations can leverage cloud
based testing for higher flexibility and
lower cost. ‘Testing as a Service’ or
TPO (Test Process Outsourcing) pro-
vides organizations an option to set up
a virtual test lab without any upfront
investment in lab infrastructure, au-
tomation tools licenses, and skilled re-
sources. The pay-per-usage pricing
models can help in controlling IT
budget and maximizing ROI. The
rapid pace at which the cloud is being
adopted by users and corporations
alike provides the next level of op-
portunity for IT service providers to
ramp up their skills and address the
demand, which is increasing by the
day. Testing teams should equip them-
selves with viable strategies to miti-
gate the risks and issues associated
with cloud computing by covering ad-
ditional capabilities available in the
cloud computing environment. si
there is a 35 to 40 percent growth in
offshore testing services. As per the
estimates of Ovum, the US alone
spends 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 Asian
countries. Given the reputation of
India as an IT country, a total of 70
percent, totaling to $9.1 billion is
garnered by Indian IT service
providers. The application develop-
ment and maintenance market has
only demonstrated a CAGR of 19
percent year-on-year, in comparison
to 47 percent by the independent
testing services.
Given the growth opportunity, and
saturation 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 fact
that all IT majors now have testing
centers of excellence and offer inde-
pendent testing service. “Till a few
years back, the average deal sizes in
outsourced testing projects were
about $50,000 to $60,000 requiring
a few testers to be on the job. Only
certain parts and types of testing
were being outsourced to India. Cur-
rently, independent software ven-
dor’s (ISV) are outsourcing
For India, to be prepared to grab
a $9.1 billion pie of the outsourced
testing market, the major challenge
is to overcome the shortage of
skilled resources. As per estimates,
there is a shortage of 22,000 testers
and potentially there will be a short-
fall of 40,000 more in the years to
come.
This shortage is now a major
concern for the IT service organiza-
tions, considering that the academia
is not geared up to support the pro-
gram, and many of the training or-
ganizations are not geared up to
meet the demand of the industry. In
this scenario, the question still re-
mains as to how is the industry plan-
ning to tackle the shortage of
software testers?
The current education programs
provided by independent training in-
stitutes in the market do not meet in-
dustry expectations. While the
industry ideally looks forward to a
resource that is truly industry-ready
and can be deployed with minimal
intervention of further training, most
programs provide superficial knowl-
edge and do not concentrate on test-
ing skill development, thereby not
capable of providing industry-ready
software testers. The challenge we
need to work on is in devising a cur-
the curriculum and delivering it,
there is a need for a industry-wide
common agreement on the compe-
tency framework for testing profes-
sionals, and an acceptance by the
industry members for the same
framework.
Considering the present growth
and potential in the software testing
industry, the opportunities for soft-
ware testers are enormous. While
there is not enough training available
to them, the pay package is certainly
very encouraging with entry level
salaries ranging anywhere between
1.4-3.6 lakhs. A career in testing can
be as challenging and interesting as a
development job. In fact, in some
companies these days, software
testers get paid even more than soft-
ware developers.
Customers will want to ensure
that software bugs don’t eat up their
dollar investments, and will demand
better testing. This would make the
total investments in testing grow, and
this would mean that testing is here
to stay and there is a great career for
individuals with this skill sets. si
About Author
The author is CEO, Co-
Founder, Edista Testing

siliconindia
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July 2010
Technology: By Nayan Bheda
The author is Vice President – Strategic Development, Suvidhaa Infoserve .
He can be reached at nayan@suvidhaa.net
M-commerce
E
Commerce
for the Masses
ven as we were marveling
at the way the Internet had
changed our lifestyles, the
increasing popularity of
the mobile phone and de-
velopments in mobile technology have
heralded 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 the
Internet without needing to find a
place to plug in. A vast segment of the
population that neither had a landline
nor a bank account (unbanked) in their
names have had a rapid leap and now
not only they own a mobile handset
but are also well poised to transact on
their mobile. The speed of mobile pen-
etration is 10 times faster than the PC
penetration and is expected to become
one billion by 2014. The mobile chan-
nel has provided a rare opportunity not
only to leapfrog years of poor infra-
structure development but also in by-
passing geographical constraints to
bring massive benefits and lifestyle
changes to millions of under-served
people across India. The average In-
dian does not own a PC, but the chai-
wala (tea vendor), the taxi-wala, the
farmer, the housewife, the kabadiwala,
and just about everyone has a monthly
budget to keep their mobile phone
alive. The huge unbanked population
and the lack of credit card penetration
can little hinder the growth of m-com-
merce in India. Let us take markets
siliconindia
|40|
July 2010
like Vietnam and Cambodia for in-
stance, which are much poorer
economies as compared to India and
have much lesser credit card popula-
tion, and yet m-commerce has already
evolved in these countries. So, can we
then say m-commerce will be a defi-
nite success in India? Well, the indus-
try is in its nascent stage and is
evolving every passing day, and each
one of the stakeholders in the ecosys-
tem viz., content developers, telcos,
regulators, banks and financial Institu-
tions, users (consumers), and even the
media have a definitive role to play.
A vast segment of the population that
neither had a landline nor a bank account
has had a rapid leap and is now well
poised to transact on the mobile
Content Developers
India is a land of many languages but
only two percent of the Indian popu-
lation prefers reading in English. If
the content is in local language, it
will not only ensure quicker adoption
by the user but also will be an instant
success. Further, content developers
are tempted to look at India as one
market, and there are more players to
share the pie. Also emerging are the
regional markets, growing exponen-
tially and offering a huge potential
for developers especially the start-
ups. These apart, there exists a huge
B2B market for m-commerce in
India as well.
scribers in India and still adding at a
rate of 10 million every month, the
Telcos
success of m-commerce can only be a
Who else but the telcos can better un-
reality if the customer is at ease in ac-
derstand the market, the customers,
cessing and using the various applica-
and importantly their profiles? Telcos
tions on his or her mobile. The average
can either fund the startups or offer
person in India who is not connected
project specific funding assistance. If
will never be able to comprehend the
telcos prefer not to risk funding a
potential of the connected world. Tel-
cos need to promote content bundled
with the connectivity and extend the
market to even unconnected users. The
cost of the connectivity could get ab-
sorbed by the restricted or proportion-
ate usage. Some of my friends in the
telecom industry shared some very in-
teresting pointers on the price sensi-
project or a startup, they can look at
tivity. It has been estimated that if an
the option of evaluating and support-
application is charged, say at Rs. 10
ing quality projects by taking up the
per month, then an estimated 25 per-
responsibility of marketing the con-
cent users download the content. 40
tent, thus saving huge marketing
percent of the people download the
budgets for startups. With such a
content at Rs. 5 and 60 percent down-
backing from telcos, the startups can
loads it at just Rs. 2. At a charge of Re.
approach potential investors and seek
1 per month, it is estimated that more
funding for the project. To me, such
than 80 percent of the users will down-
a step by the telcos will encourage
load the content. Once the user expe-
many young Turks. Some of the tel-
riences the content, chances are high
cos that I know have already made a
that he will opt for an upgrade to stan-
move in this direction but others
dard data plans and hence would
should also follow suit.
evolve into a full-fledged data user.
With half a billion mobile sub-
Banks and Financial Institutions
With less than 59 percent of the total In-
dian population having access to any
banking services, with connectivity and
electricity continuing to be a pressing
challenge, the mobile becomes the ideal
device to access the common man liv-
ing in the remote villages of India. The
The success of m-commerce can only be
a reality if the customer is at ease in
accessing and using the various
applications on his or her mobile
RBI guidelines were largely SMS based
until recently when it relaxed the norms
allowing domestic remittances and fund
transfers through the mobile. The do-
mestic remittances market in India has a
huge growth potential as over 30 per-
cent Indians are migrants in urban areas.
With the new guidelines, the receiver no
longer needs to have a bank account and
can simply collect cash at the nearest
bank or its agent’s (i.e., business corre-
spondent) outlet upon producing the
tPIN received via SMS and a valid ID
proof. Having said this, it must be noted
here that most of the banks are yet to de-
velop their m-payment gateway; and the
need for a robust m-payment gateway
on the lines of the e-payment gateway
cannot be underestimated. It is also the
assumed responsibility of the banks and
financial institutions to educate the
common man to this effect and build
trust. Banks must also come forward
and take a bold step towards reducing
the cost of transactions on the mobile.
Role of Media, the Opinion Builders
For m-commerce to be a success in
India, the media has a great role to play
in taking the issues of the ‘value-cre-
ators’ that include the content develop-
ers and telcos, and getting them heard
by the regulators and the government.
The industry players need to come
together 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 mindsets
of the consumers to try and experience
so that m-commerce becomes a ‘cannot
do without it’ or ‘must have’ service.
Government, Regulators, and Policy
Influencers
The impact of the global recession and
economic slowdown in the recent past
was minimal on India and the Indian
companies, mainly because of our reg-
ulatory framework, corporate laws, and
the existence of effective policy guide-
lines and tax regime. Thanks to the Tele-
com Regulatory Authority of India
(TRAI), the country has a much evolved
telecom industry. The government
should also consider extending financial
support to application developers, eas-
ing the tax laws for service providers
engaged in m-commerce, and offering
special tax rates for m-commerce trans-
actions.
Conclusion
The mobile, with its greater penetration
than the Internet in India has already
changed for ever the way people inter-
act in their daily lives. The issues of
physical presence at an outlet and access
to the Internet, amongst others, are fast
getting eliminated, giving the consumer
the opportunity to transact anytime,
anywhere. Yes, m-commerce is evolv-
ing in India, but if the stakeholders in
the ecosystem put their heads together
and join hands to address these critical
issues, the mobile could become the
universally accepted de facto
commerce tool. si
siliconindia
|41|
July 2010
Technology: By Ash Patel
The author is Director of Business Development,
Sankalp Semiconductor As the world knows, software ing, and motivating them is the key goal of having 6 to 8 centers in differ-
services and digital design services are focus of AMS design service compa- ent parts of India. This gives engineers

very mature markets in India. In this
domain, work is done from offshore
either through companies like Infosys,
Wipro, Mindtree, and Sasken or
through subsidiaries of MNCs in
India. Almost all U.S. semiconductor
companies have design centers in
“
nies. Being in the service industry,
there can never be enough attention to
customer satisfaction. AMS compa-
nies put their engineers through rigor-
ous technical and professional training
to meet industry quality standards and
focus on these services:
and managers an opportunity to return
to their roots to do more meaningful
work closer to their home towns. This
approach makes customer projects
more manageable as it becomes possi-
ble to focus on a particular discipline
and or specific customer at a particular

in AMS Semiconductor
India that are located in hotspots like  Analog and mixed-signal solutions site, at the same time protecting IP.
indo-US trend Bangalore, Noida/Gurgaon, Pune, or
Hyderabad.
 Mixed-signal physical design
 IO solutions Services strength in numbers: For a

Design Services
In contrast, there has been more re-
luctance to outsource analog design,
since it is considered a black art. This
is changing as the trends favoring the
 Board design services design service company, the top line
 Test and characterization services depends on the number of high qual-
ity engineers available to it. During the
first half of 2010, design serv-

“
Industry trend: Finding high quality engineers in the U.S. is a
real challenge for companies. With the economic meltdown
and the high cost of education in the U.S., the influx of for-
eign students has slowed down, which would translate to
less engineers available to companies. In conjunction, the
cost of doing business in the U.S. has risen, which en-
courages companies to find alternative locations. As a
result of the above two forces, India has become a
hotspot for design service companies eager to serve
the U.S. market. A word of caution - there is a big
The decrease
of foreign
student inflow
and the increase in the
cost of doing business
in the US have
significantly turned
the attention of
companies toward India
differ-
ence between a design service company and an AMS design serv-
ice company. A high level of commitment along with professional
training is required from engineers to be successful in AMS design services.
A handful of companies based in India like Cosmic, Sasken, and Wipro are already
competing globally in this domain.
migration of software and digital work
to places like India are also relevant to
analog design and test areas.
Growth of market: Software,
firmware, digital design outsourcing,
and local markets have already grown
to large numbers in India. The IT and
BPO industries of India is expected to
have a growth of over 7 percent dur-
ing 2009-10 fiscal year and to log rev-
enues of $64 billion. According to the
latest forecast of NASSCOM, the IT
and outsourcing industry will log an
export growth of 4-7 percent this fiscal
to log $48-50 billion in revenues. Do-
mestic revenue for the industry is ex-
pected to grow much faster at 15-18
percent to touch $13 billion, the in-
dustry lobby says in its annual survey
on the sector.
In the last few years, AMS design
services market is steadily gaining
momentum. The market stood at about
$1 billion in 2007 and the compound
annual growth rate (CAGR) is ex-
pected to climb by 11 percent from
2006 to 2011, according to Gartner es-
timates.
AMS Ecosystem: To build a world
class AMS design service company, an
ecosystem of Analog and mixed-sig-
nal services and solutions has to be
created. Highly talented engineers are
the heart of the company; hiring, train-
Having
operations on
more locations
helps attract talent from
the respective
surroundings, who in
turn focus on particular
disciplines and or a
specific customer at a
particular site
Outsourcing analog design and test
work is not as simple as software or
digital design since the process is not
well defined. Very few companies
have succeeded in building a sustain-
able business model. Such companies
have design centers in second tier
cities and work closely with colleges
there to get access to talent and re-
sources. This approach lets them pass
on the cost benefits to the customers
and helps to retain talent better. Em-
ployees do not have to deal with big
city hassles and achieve a better work
life balance. Sankalp’s approach is
even more notable since it already has
two operational sites and has a stated
ices companies have turned
down a number of business
opportunities since they are
low on available bandwidth.
From a business point of view,
it is a great situation to be in.
Companies are tackling the
problem by aggressively hir-
ing from colleges and putting
the recruits through rigorous
training programs. In parallel,
they are bringing industry vet-
erans and senior leaders on
board as consultants. US hir-
ing is very selective and free-
lance engineers are used to
execute projects, which have
to be done onsite.
Values, customer services, and work
environment: 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 to
know the significance of IP protection
and the measures they should take to
prevent any leaks. Honesty and in-
tegrity are the values on which the
company is founded. Customer serv-
ice is stressed upon and employee per-
formance is heavily graded based on
professionalism and customer service.
Semiconductor design is a creative
process, and to foster talent employees
are given the freedom to make deci-
sions and develop into leaders. si

siliconindia
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July 2010 siliconindia
|43|
July 2010
CIO Profile: By Vimali Swamy
over 3 billion transistors and is able to Treading on a Challenging Path ing on robotics and solid geometric

Technology is Fast Changing

perform a multitude of functions, not The role of a CIO is a highly de- modeling technologies, Jayaraman

“S
only in graphics but also in general manding job, especially at a dynamic quickly felt that he was more inter-

Be Open to Embrace the Change

ocial networking
and consumer
Web applications
and their foray
into the enterprises
is what one should look out for in the
near future,” says Ranga Jayaraman. As
the CIO of Nvidia, a leader in visual
computing technologies, he is quick to
observe the technology trends that will
drive the industry in upcoming years.
The industry has been developing at a
fast pace and technologies like cloud
its initial stages, is a very promising
technology that could transform the
way IT organizations function today.
The idea that one does not require
everything within the four walls of the
company to provide effective service
and support to customers is very attrac-
tive. And, companies like Sales-
force.com have proven this with their
sales, customer relationship, and part-
ner relationship management tool suite.
“Salesforce.com is an excellent exam-
Cost Optimization, the Driving
Factor
From a CIO perspective, Jayaraman is
equally enthusiastic about one of the
core 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 not
something they can afford to overlook,”
says Jayaraman. Like his peers in the
industry, optimization of resources has
large scale supercomputing. Designing,
developing, and debugging these chips
require the engineers to do millions of
compute jobs per day. These jobs are
run in large compute server farms with
thousands of servers, crunching away
non-stop, day in and day out, utilizing
petabytes of storage and very high
speed bandwidth networks within and
across datacenters.
“In order to drive costs down we
have focused heavily on how storage is
utilized, identifying and eliminating du-
plicate content and migrating content
that is not being used frequently to less
expensive storage tiers according to im-
portance. Also we have been looking at
ways of partitioning these server farms
and forming job queues in more intelli-
company like NVIDIA, states Jayara-
man. Keeping up with the current
technology and judiciously deploying
it to solve real business problems,
while ensuring information security
and managing effective delivery of
services to customers is a challenge
that excites him.
Any given product at Nvidia has
people working across different geog-
raphies. Enabling the employees to
work together and collaborate effec-
tively, overcoming the geographic and
cultural communication hurdles is an-
other area of focus for him. Some of
the technologies he is exploring for this
challenge are pervasive video confer-
encing, people search using profiles
rather than names, internal video pod-
ested in transforming business and
connecting with people. He then led
the storage business at IBM as the
CIO, which was then sold to Hitachi
to form Hitachi Global Storage
Technologies. After a five year stint
at Hitachi he joined Nvidia in the
same capacity in 2008 and has been
successfully driving the business
since then.
Jayaraman strongly feels that IT or-
ganizations should develop a culture of
‘heroic professionalism.’ Due to the
dynamic nature of IT, problems con-
stantly arise in a business function and
some employees become ‘professional
heroes’ by making a diving catch and
saving the day. People need to be able
not only to solve the problem of the

One does not require everything

computing and enterprise versions of gent ways so that we can increase the cast publishing, and enterprise social day but also to really look at how to do
consumer Web applications are what utilization of those servers more and networking for work groups and com- things so that they are not inundated
will drive collaboration within enter- within the four walls of the more,” explains Jayaraman. mon interest communities. and buried by the problems. This is a

company and should utilize the

prises tomorrow. It is with such focused and well On the external business partners’s culture he has been instilling at Nvidia
Exemplifying his thoughts, Jayara- thought out cost management strategies side, Jayaraman believes that lack of IT over the past 2 years.
man talks about the scope of a popular expertise of external vendors to that Jayaraman helped Nvidia navigate transparency is a continuing challenge A people’s person, he believes that

provide effective service and

consumer application like YouTube. In
a consumer’s everyday life, YouTube is
one of the most common platforms to
share experiences and perspectives
with each other as a video log. But at
an enterprise level, it holds much more
potential. A lot of time and effort can be
saved in the training of resources via
YouTube like capabilities. A technol-
ogy expert or a trainer can effectively
create a video podcast and post it with
careful packaging and tagging of the
content on an internal video sharing
site, where it is available and searchable
by others in the company. The users can
watch it, add comments about what
they saw and learnt and what they did
not, what needs elaboration and recom-
mend it to other friends. “This will pro-
vide a means to augment organizational
learning capture and propagation mech-
anisms such as documents and wikis,”
he says.
Similarly, cloud computing, even in
support
Ranga Jayaraman
ple of major enterprise applications in
the cloud. Force.com, on which the
Salesforce.com applications are built is
a very good example of a powerful ap-
plication development environment as
a cloud offering,” explains Jayaraman.
But where do these fit into the
larger scheme of everyday operations?
Jayaraman is quick to answer. If one
looks at the scope of what most IT or-
ganizations spend their energy on, a
very large fraction of their day would
be consumed in routine tasks like server
upkeep, networks, storage, training, and
addressing problems of resources.
Adoption of these new technologies
will allow IT organizations to free
themselves to develop new capabilities
of great business value.
been his constant focus as a CIO, and
over the years he has observed several
areas of opportunity for effectively
managing it.
Any IT organization has a large
number of contractual relationships for
hardware and software products and
services. It is imperative for a CIO to
focus on what the real needs of the
company are for the products and serv-
ices versus the contractual obligations
with the vendors. The entire vendor
management cycle with a commitment
to achieve a win-win outcome is quite
essential for cost reduction, he insists.
The next area is operational opti-
mization. Nvidia makes some of the
world’s most complex chips. For ex-
ample, its latest generation GPU has
through the tumultuous economic
downturn. Now, with future growth on
the horizon, he is enthusiastic to talk
about the opportunities ahead. Nvidia’s
business spans the entire spectrum of
computing from mobile to supercom-
puting. Mobile computing is a major
area of focus for the company. Today its
Tegra chips are finding their way into
extraordinary devices like smartphones,
computing tablets, and smart books.
One of the other core businesses of
Nvidia is high-performance computing.
It’s CUDA enabled GPUs enable high
performance supercomputers to be built
at affordable cost. Getting into the mo-
bile and supercomputing arenas means
the company is selling its products to
enterprises, including the CIOs of those
enterprises. So, Jayaraman ensures that
IT is involved in the development and
support of capabilities for NVIDIA to
market and sell to those customers and
support them after the sale.
within the industry. IT organizations
rely, to a large extent, on the partner-
ships with organizations outside the
company. A partner could be a
provider of hardware, software or
services. “I feel that service providers
spend tremendous efforts in building
partnership with customers, but they
often do not provide sufficient visibil-
ity into their operations and cost. If the
partners will create a more open envi-
ronment it would enable a deeper un-
derstanding and the partnership will be
more effective,” Jayaraman explains.
This is a challenge every company
faces and the industry will have to take
a collective effort to overcome it.
Leadership and Vision
An industry veteran, Jayaraman has
a vast experience spanning IBM, Hi-
tachi Global Storage Technologies,
and currently Nvidia. Though he
started as a researcher in IBM work-
one cannot be a leader if driven by
selfish objectives and goals. A true
leader is one whose goals are beyond
self and has a vision for the organiza-
tion he works for. His mantra is ‘love
all and serve all’. Jayaraman is a
strong believer in developing a healthy
team, building a career path for his
group, and giving everyone a chance
to prove their mettle. As for him, he
says, “I don’t have a career to mind
but have a job to do. I give my all to
the job and the career is the side effect
of a job well done.”
A word of advice from him to
startup company leaders — “Work on
problems that matter and validate them
with the customers in the early stage so
that what you create indeed becomes
valuable. Engage with potential cus-
tomer prospects quite early, seek out
the CIOs who see the potential for an
early engagement and strike a win-win
value proposition.” si

siliconindia
|44|
July 2010 siliconindia
|45|
July 2010
 siTech20 siliconindia
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Index of the top tech public companies in U.S founded
Stock Price
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CAPITALIZATION
In $ Millions
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RANK COMPANY
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