New Technology

Outsourcing company Satyam Computer Services Ltd said on Sunday it would rebrand itself as "Mahindra Satyam," its latest step in efforts to recover from India's worst corporate fraud scandal.

Satyam, once ranked as India's No. 4 outsourcer, shocked investors in January with the revelation that it had overstated profits for years.

Tech Mahindra, a unit of tractor and utility vehicle maker Mahindra & Mahindra and 31 percent-owned by Britain's BT Group, won an auction in April for a controlling stake in Satyam.

"We are optimistic that this new brand will re-energize the organization and will be well received by all our stakeholders," Vineet Nayyar, executive vice chairman of Satyam's board, said in a statement.

According to a global study jointly released by IBM and InfoTech Research Group, even in a very difficult economic environment, Indian small and medium enterprises (SMEs) are eager to actively invest in initiatives that reduce the environmental impact of their information technology.

The study is based on a survey of more than 1,000 information technology executives at companies with between 100 and 1,000 employees across industries and in a dozen countries including the India, United States, Canada, France, Germany and the United Kingdom.

The findings show that more than 55 per cent of Indian companies are going to, or have already commissioned third-party environmental audits, purchased emission credits, or have made improvements in their supply chain efficiency to reduce energy consumption. 63 per cent of Indian IT enterprises have completed a retrofit of existing server rooms to increase energy efficiency, or have a pilot project underway.

Almost two-thirds of all companies globally are currently, or are planning within the next 12 months, to add virtualization technology to their servers, consolidate storage systems, or retrofit their server rooms.

�Businesses around the world have discovered that going green isn�t just good for the planet; it�s good for their bottom line,� said Ramesh Narasimhan, Director, General Business, IBM India/South Asia. �Green IT strategies are leading to savings in operational expenditure; lower space and power and higher ROI. The findings in this report highlight how mid-size companies are realizing significant cost savings when they adopt Green IT initiatives.�

Significantly, there are compelling business benefits associated with �going green� and reducing the negative impact on the environment is a welcome addition. The driving factor pushing companies to adopt Green IT to reduce their costs while reducing the negative impact on the environment is an obvious additional benefit.

The study found companies typically fall into one of four IT personalities; green advocates, smart spenders, green observers and green seekers. Green advocates, companies that integrate environmental considerations into all areas of their business, makes up about 25 per cent of the companies surveyed. Smart spenders make up 38 per cent of the survey group and are defined as SMBs willing to make upfront investments to achieve a long-term cost reduction. Green observers, who make up 30 per cent of the survey group, do not have specific environmental goals and need management support for initiatives to improve energy efficiency. Green seekers, at 7 per cent, are interested in adopting energy efficient technology but are unsure of where to start and how to quantify results.

Saving electricity requires the measurement of IT electrical consumption, something many companies cannot do. However, the survey finds that more than 50 per cent of companies have implemented some form of energy measurement for their information technology infrastructure, and about one-quarter plan to do so in the year ahead.

About 60% of the total respondents weigh the importance placed on business benefits against environmental benefits, suggesting that IT initiatives to help improve energy efficiency must yield financial returns in order to get the green light.

Countries with some of the highest fuel prices in the world have not, up to this point, turned to remote conferencing and telecommuting initiatives to reduce both cost and energy consumption. The survey found while 50 to 60 per cent of Indian, Brazilian, North American and British businesses are up and running with telecommuting and virtual conferencing capabilities, Germany, France, and, to a lesser extent, the Nordic countries have been slower to adopt these technologies. Initiatives intended to reduce travel are clearly receiving the most attention from geographically �big� countries over the next 12 months. From Brazil to Canada, more than 30 per cent of businesses will aggressively pursue remote conferencing and telecommuting strategies.

Virtualization is also being perceived as a major step in help achieving energy efficient business operation. The rate of server virtualization across most regions (with an average implementation rate of 48 per cent) is evidence that initiatives with a business case comprised of clear cost savings and environmental benefits will win first. For new initiatives to gain acceptance from stakeholders who may be sceptical, a clear case for cost containment, savings or other business benefits must be made first.

Data indicates that IT equipment recycling has shown good progress. Overall, 56 per cent of the companies surveyed have either completed or are implementing outdated hardware recycling programs.

Approximately 23 per cent of IT departments report plans to adopt IT equipment recycling and energy measurement practices within the next 12 months. 65 per cent of all implementations, the study found organizations� initial goals for these projects are met or exceeded.

The Indian marketplace boasts of more than 35 million small and medium businesses and is now competing globally. They will need to gain a competitive edge to win amidst global competition and technology provides them this edge. IBM offers services, research, hardware and software specifically tailored for the SME market in India that can help mid-size companies to be both greener and leaner.

Despite the recessionary phase hitting the bottom-line of the country's IT sector, the northern region appeared to have remained insulated as total IT exports from this region grew by a whopping 30 per cent, with Infosys becoming the top exporter.

Performing against all odds, export of software and IT enabled services from Mohali, Chandigarh and Panchkula have jumped to Rs 1,051.23 crore in 2008-09 against Rs 806.01 crore in 2007-08, as per data provided by Software Technology Parks of India (STPI).

"With the global slowdown casting its shadow on majority of industrial sectors including IT, we were unsure of even touching Rs 1,000-crore mark from this region under current circumstances...but the industry has managed to clock handsome growth in spite of meltdown impact," STPI Joint Director Ajay Shrivastava said in Chandigarh.

Of the total export of Rs 1,051.23 crore, the exports from SEZs of Chandigarh zoomed to Rs 318 crore in 2008-09, posting a growth of 127 per cent in one year of its operation.

Infosys Technologies continued to retain the position of top IT exporter from here as its total exports, including SEZ, was Rs 565.14 crore against Rs 342.88 crore in the year-ago period.

Interestingly, the exports of Infosys account for almost half of the total IT exports from the tricity of Mohali, Panchkula and Chandigarh.

Infosys Technologies Ltd chairman and chief mentor N.R. Narayana Murthy Saturday hoped the union budget for 2009-10 would focus on inclusive growth, which he termed as 'the need of the country'.

'I don't have any specific expectation for the IT sector from the budget. But I hope the government will try to bring in an inclusive growth, as it is the need of the country to make sure the poorer people will also benefit from the economic progress,' Murthy told reporters here.

Elaborating on his budget wishes, Murthy said the government should have better focus on healthcare, education, shelter and nutrition for the betterment of the needy.

'We are very happy there is a stable government and that is good thing to the country. I am sure this stable government will do quite a lot for the country because it is free to implement its policies,' he said on the margins of the IT bellwether's 28th annual general meeting (AGM).

Expressing relief over the outcome of the recent general elections, Murthy said a two-party system was a stable model, as evident from such a system in the US, Britain and many other countries.

'By and large, two-party system is a stable model. It is an evolved system,' he pointed out.

Commenting on the severe financial crisis that had led to a global recession of a magnitude never anticipated by critics of the free market system, Murthy said compassionate capitalism had proved to be the only viable system because communism had failed and socialism had not worked as well as everyone wanted.

'Though I don't believe the free market system has failed, as critics have pointed out in light of the global meltdown and financial crisis, I do admit there are negatives in all systems. But I think, by and large, compassionate capitalism has proved to be the only viable system,' Murthy noted.

India's largest outsourcing firm Tata Consultancy Services (TCS) said that it will relocate staff abroad into India."The company follows an onsite-offshore model. We will focus to do more work in India because it helps in saving cost and efficiency," TCS Chief Operating Officer N Chandrasekaran said.

However, the company would continue to do work onshore and relocation did not mean that it was winding up its operations abroad.The company, which tried out its relocation in January-March this year, gained significantly in the last quarter of 2008-09.

In Q4, the company brought back its US staff to India resulting in a cost saving of Rs 121 crore. The company did not give any figures on how many staff were brought back.The relocation of staff could be in thousands, he said.

Infosys outperformed its peers both on the front of revenue and profit growth in the fourth quarter of 2008-09. Revenue and profit grew by 25 and 33 per cent, respectively.

Amidst a depreciating rupee, IT companies have seen a rise in revenues and profits for the quarter and year ended March 2009. The combined revenue growth of the top four - TCS, Wipro, Infosys, and HCL Technologies - was 15 per cent for the quarter ended March 2009.

The cumulative profit for the four companies stood at Rs 3,840 crore for the said quarter, a gain of 13.6 per cent over the same period last year. The primary contributors to the growth were Infosys and Wipro.

TCS too posted gains. HCL technologies, however, witnessed a 17 per cent drop in revenue.

Its foreign exchange loss stood at Rs 201 crore. "Infosys has the lowest hedge, it is good on delivery, performance, it reads the market well and outperforms its guidance.

All these make me go bullish on the company among the lot," said Anil Advani, head of research, SBI Capital Securities. HCL's performance has typically lagged that of the remaining three, "HCL has never been a great performer but with the Axon acquisition, people are looking at it in a more positive manner," said an IT analyst who did not wish to be named.

On an annual performance basis, while Wipro gained 44 per cent in its revenues, Infosys emerged as the maximum gainer in profits with a 30 per cent growth in profit during 2008-09 against that recorded in 2007-08.

The Sensex maintained its previous week's level and ended at 11,403 points on the last trading day of the week, Wednesday, rising by a marginal 0.65 per cent. Foreign institutional investors (FIIs) invested around Rs 2,491 crore in equities during the week. For the month of April, their total investment in equities stood at Rs 6,508 crore.

The sectoral indices presented a mixed bag of results last week. The major gainers were Information Technology (IT) and Banks, which gained 4.2 per cent and 1.7 per cent respectively during the week. The heavily battered sectors were Realty and Metals, which declined 5.6 per cent and 3.9 per cent respectively.

"The fact that the US economy is showing some signs of revival may have been reflected in the rise of the IT index last week. However, the realty index is still reeling under pressure due to anticipation of poor Q4 results," says V K Sharma of Anagram Stock Broking. India's largest real estate company, DLF, on Thursday posted a staggering 92.7 per cent year-on-year decline in net profit for the March quarter - a development that is likely to shake market participants' faith in the realty sector even further.

Inflation rose slightly to 0.57 per cent for the week ended April 18, 2009. It stood at 0.26 per cent the week before. Crude oil is currently trading at $49.9 per barrel, declining a marginal 0.7 per cent during the week. Gold declined by about 1 per cent. It is currently trading at Rs 14,520 per 10 gram. The rupee is currently trading at 49.8 vis-Ã -vis the dollar, appreciating 0.3 per cent during the week.

Unless and until markets in the US witness a sharp fall, the Indian stocks markets are expected to continue to rally. "Once the Q4 results have been announced, the markets are likely to move in tandem with the international environment. However, review your position in the market before the election results," suggests Sharma.