With the global recession impacting IT companies, Indian software firms are eying the huge aerospace and defense (A&D) market as airplane makers and Defense companies look to control costs by outsourcing design and management systems.

Research firm Frost & Sullivan estimates the Indian Defense market to touch $36 billion by 2013 and companies in India are expected to get offset orders worth nearly $4 billion through 2011.

Sensing this potential, companies such as IBM, Wipro and HCL are working on IT implementation contracts. The offset program is expected to open up new opportunities for these IT vendors for A&D contract worth over Rs 300 crore.

Talking to CXOtoday, Anup Vittal, Industry Leader-Aerospace & Defense of IBM India, said, “With A&D OEMs and tiered suppliers increasingly outsourcing IT and engineering services, there is a very large window of opportunity created for software (IT) companies. A&D companies are increasingly being asked to demonstrate product development agility, human capital management, improve upon service offerings in the aftermarket space and enable enterprise cost effectiveness.”

“All of these capabilities can be developed by partnering with established software organizations that are capable of driving innovation and improvements. This, in turn, makes it a very lucrative market for software companies to exhibit their expertise,” said Vittal.

IBM is bullish about the A&D market in India and sees a huge potential to earn up to $5 billion from these sectors in India over a 10-year period. Additionally, as a qualified A&D offsets partner in India, IBM is well-poised for significant growth in this region, as companies in India are expected to get offset orders worth nearly $4 billion through 2011.

Similarly, Wipro offers application development and maintenance and enterprise business integration. It also has the expertise to offer IT services for the maintenance, repair and overhaul (MRO) of civilian aircraft, and is already offering these services to some of its clients.

HCL’s main area of expertise in A&D sector are avionics, aero structures and mechanical engineering services for aero engines and addresses the aerospace industry’s key points.

Karun Khanna, director of Alpha Design Technologies, said, “Looking at the huge demand for software in the A&D sector, most of the IT software players are all now eying a large share in this sector. Since they all have high domain knowledge, it will give this sector the much-needed boost.”

India’s opening up of the Defense sector to foreign direct investment, the ongoing modernization plan of its Armed Forces and enormous new opportunities in the civil aviation sector have opened innumerable new avenues.

The Reserve Bank of India (RBI) has issued a Notification to all the banks in India, making it mandatory for them to develop a system wherein additional authentication/validation is offered to an online banking customer through a password input.

Also, for transactions exceeding Rs. 5,000, it will be mandatory for the banks to send an intimation to the customer.

“RBI has been reviewing various options to enhance the security of online card transactions,” said G. Padmanabhan, chief general manager of RBI, in his letter to the banks. The letter goes on to say that the above-mentioned Notification has to be strictly followed, on failure of which the banks will be liable for penalty charges.

Interactive Voice Response (IVR) transactions will not have to comply with the compulsory password protection procedure for the time being. For this, separate instructions will follow from the bank. The Notification comes into effect from August 1, 2009.

The study, ‘R&D Globalization - A China Perspective’, by Zinnov Management Consulting revealed that China as of today is home to about 920 MNCs who have established 1,100 R&D centers, while the numbers for India are significantly lower at 671 MNCs with 680 centers. Not all the R&D is limited to software alone, but also includes manufacturing, oil & gas, and chemicals, among other industries.

The report highlights the fact that companies are realigning their global strategies in the wake of the recent US meltdown and countries like India and China still continue to hold strong growth prospects as offshoring destinations.

Pari Natarajan, chief executive officer, Zinnov Management Consulting, said, “With the changed global scenario, offshoring is undoubtedly showcasing an aggressive growth trend and some key drivers that are helping increase offshoring to China are reasons like the increased government support, along with huge availability of local workforce, the domestic market opportunities, and last but not the least cost arbitrage.”

“Top Indian offshore business destinations today are facing tough competition from cities like Shanghai and Beijing as favored offshoring destinations and hence it’s time for India to look into various aspects that can further strengthen the R&D landscape in India,” said Natarajan.

Though offshoring to China began in the early ’90s, the momentum started picking up only in mid-2000. The local government in China, in fact, has been very active in promoting R&D activities by offering a multitude of incentives.

Additionally, a huge base of installed as well as fresh talent pool suitable for working in R&D space, along with enormous domestic market opportunity, are some of the favorable factors. The report states that even though the cost advantage has come down over the last five years, the total cost of running a centre in China is still 65 to 70 percent cheaper than in the US.

“MNCs based out of the US and Europe are the biggest R&D investors in China till date, whereas cities like Shanghai and Beijing collectively account for more than half of the R&D establishments. These global firms have established large R&D centres in China with 53% of them having more than 150 R&D personnel at these centres,” said Praveen Bhadada, engagement manager, Zinnov Management Consulting.

“There is a definite desire among Chinese centers to grow fast and the leadership teams at these centers have been aggressively in touch with their headquarters to get more work, both in terms of quality and quantity. Indian centers, in due course of time, are most likely to face tough competition from their Chinese counterparts and hence it’s time for us to look into matters that can strengthen the R&D landscape in India,” said Bhadada.

The report very promptly shows that the Indian centers are much ahead on the overall maturity curve, with all requisite processes in place and better talent; they are indeed well-positioned to take up more work in the overall R&D value chain as compared to China. And at the end of it all, both India and China do not account for more than 10 to 15% of the total R&D for most of the companies and the future will witness more work being offshored to both these locations.

Zinnov Management Consulting, the management consulting company, released the findings of a study on attrition levels in the MNC R&D industry in India for the year 2009.

The report states that this declining trend in attrition started in the year 2008 and was the lowest ever then, when compared to the previous two years. While it was high in the second quarter (April to June period in case of January to December financial cycle) of the year as compared to the other quarters, it was much under control in most organizations by the last quarter of 2008 (October to December period) due to the economic condition.

Sahana Shetty, senior consultant, Zinnov Management Consulting, said, “This year, most organizations have frozen the salary increase for 2009 and even delayed their appraisal processes in lieu of a better visibility on the economic situation. Most of them have even frozen hiring for the current year, while only a few of them are back-filling for attrition for critical positions.” Throwing some light on trends that they foresee, Zinnov reported that the average attrition rate across product development organizations is at 5-8% and companies are expected to have a lower attrition in the coming months in 2009.

The report stated that when compared to 2007, product companies across India have witnessed low attrition for various levels in 2008, indicating a more positive trend. The junior-level attrition, which had gone up to 7% in 2007, dropped to 5% in 2008. Similarly, middle-level attrition, which was 6% in 2007, also came down to 4% in 2008. Also, 2008 witnessed the lowest levels of attrition when compared to the last two years.

In terms of cities, Bangalore continues to reflect high attrition when compared to Pune and Chennai, as per the report. Companies might see attrition at the junior levels as engineers might choose to go for higher studies in 2010, if the downturn continues through to next year, highlighted the report. In addition to this, services companies might start competing for senior resources and domain experts as their revenue model/business model might switch to revenue share/fixed priced projects than the current time & material projects. There is bound to be increased focus on internal capability development programs in varied organizations to help breed productivity, said the report.

Google won a significant legal victory when a judge ruled against a Pittsburgh couple who claimed that Street View on Google Maps was a reckless invasion of their privacy. Aaron and Christine Boring alleged in a lawsuit that Google “significantly disregarded (their) privacy interests” when Street View cameras captured images of their house beyond signs marked “private road.”

They sought more than $25,000 in damages and asked that the images of their home be taken off the site and destroyed.

But a federal judge in Pittsburgh found no merit to the claims, finding that Google could legally photograph on private roads.”Today’s satellite-image technology means that…complete privacy does not exist,” Google said in its response to the Borings’ complaint.

A couple in Pittsburgh whose lawsuit claimed that Street View on Google Maps is a reckless invasion of their privacy lost their case.

Aaron and Christine Boring sued the Internet search giant last April, alleging that Google “significantly disregarded (their) privacy interests” when Street View cameras captured images of their house beyond signs marked “private road.” The couple claimed in their five-count lawsuit that finding their home clearly visible on Google’s Street View caused them “mental suffering” and diluted their home value. They sought more than $25,000 in damages and asked that the images of their home be taken off the site and destroyed.

However, the U.S. District Court for Western Pennsylvania wasn’t impressed by the suit and dismissed it (PDF) Tuesday, saying the Borings “failed to state a claim under any count.”

Ironically, the Borings subjected themselves to even more public exposure by filing the lawsuit, which included their home address. In addition, the Allegheny County’s Office of Property Assessments included a photo of the home on its Web site.

The Borings are not alone in their ire toward the Google Maps feature. As reported earlier, residents in California’s Humboldt County complained that the drivers who are hired to collect the images are disregarding private property signs and driving up private roads . In January, a private Minnesota community near St. Paul, unhappy that images of its streets and homes appeared on the site, demanded Google remove the images , which the company did.

However, Google claims to be legally allowed to photograph on private roads, arguing that privacy no longer exists in this age of satellite and aerial imagery.

“Today’s satellite-image technology means that… complete privacy does not exist ,” Google said in its response to the Borings’ complaint

Not long after the feature launched in May 2007 , privacy advocates criticized Google for displaying photographs that included people’s faces and car license plates. And last May, the company announced that it had begun testing face-blurring technology for the service.

source: Cnet

In order to cater to the needs of enterprises that are running VAX and Alpha Systems, Stromasys, a Geneva-based software company, has opened a representative office in Bangalore.  The India office will serve as a hub for Stromasys’ sales and operations in the Asia-Pacific Region.

The company has appointed Venkat Sundaram as the chief representative for its India operations. He will be responsible for managing the overall business and operations. He has over 30 years of experience in the IT industry.

The VAX and Alpha hardware systems were developed during the 1980s, along with an advance operating system, Open VMS, that is far superior to today’s operating systems. However, now the company’s solution gives a seamless migration from the aging VAX or Alpha systems hardware platform. Talking to CXOtoday, Robert Boers, founder and chairman of Stromasys, said, “The market for cross-platform virtualization solutions in the APAC region is experiencing a phenomenal growth, and having a direct country-specific presence in the region will allow us to serve customers better and achieve further business growth.”

“We know that the Indian Defence forces and labs are all using VAX or Alpha systems for a very long time and need to migrate to newer hardware platforms that are faster, and more energy-efficient industry standard servers,” said Boers.

China, India, Japan and Australia are the major markets for Stromasys in the APAC region and it expects to grow annually at 30% in all these countries.

Commenting on the Indian market, Sundaram said, “Cross-platform virtualization solutions have ample market potential as there are many companies, GoI agencies, and PSUs throughout India that still run mission-critical applications on older VAX or Alpha systems - where the underlying hardware is now End-of-Life and simply needs to be replaced.”

“With our solutions, these companies can now alleviate the problems of hardware obsolescence and greatly reduce their services, maintenance and operational costs of these aging systems,” he said.

The company is targeting about 200 companies in India including Indian Air Force, ISRO, BHEL, ADE, NTPC, and CMC, among others.

Planned expenditure

Government’s planned expenditure for April-November 2008 stood at Rs 1.3 lakh crore
April-Nov planned expenditure is 56% of the estimated Rs 2.4 lakh crore Including all fiscal measures announced, it is expected to rise Rs 35,000 cr to Rs 2.7 lakh crore

Brokerage houses estimate planned expenditure in FY10 at Rs 2.9 lakh cr.

Non-plan expenditure

• Govt had estimated non-plan expenditure of Rs 5 lakh crore, up  13% YoY
• On account of rising demand, govt asks Parliament for supplementary grants
• Non-plan expenditure would be Rs 6.1 lakh crore, up 21% higher than budget estimate
• High agricultures producer/foodgrain prices in the first half of fiscal increased food bill subsidy by Rs 4,100 cr

Budget expectation

Banking

• Expected to increase banks’ mandatory lending limit to MSMEs
• May persuade PSU banks to reduce home loan rates, through interest subvention or any other means
• May reduce the duration of deposits (estimated at 3 years) to drive an increased flow of deposits towards banks.

Logistics

• Timeline for CST phase out by 2010 to be maintained
• Focus on implementation of freight corridor of the Railway
• Sec 80IA benefits to continue for ICD & CFS investments

Automobile

• Removal of additional duty of Rs15,000-20,000 on vehicles with engine capacity above 1,500cc
• Accelerated depreciation of 50% of purchase of CV before Mar 2009 may be extended

Brokerage Expectations

• Direct tax collections to decline by 4%. Indirect tax collection is already under pressure on a series of duty cuts.
• To increase capital commitments, already up 20% over budget estimate.
• Subsidies are likely to be considerably lower in FY10 due to substantial decline in fertiliser prices.
• The revenue projection for FY09 is looking aggressive in the changed economic environment.
• Net tax revenues falling short of budget estimates by 5%.
• Lower subsidy bill ensure production utilisation towards growth
• Gross fiscal deficit of FY10 seen at 5.3% of GDP
• Net tax revenue to decline due to lower personal income and corporate earnings
• FY09 direct tax to decline by 4% to Rs 3.5 lakh crore from budget estimates of Rs 3.6 crore
• Excise duty collection to fall short by 16% for FY09 due to fall in prices of most goods and commodities

ValueFirst intends to use the funds to increase its workforce by over 100%, enhance its presence in 35 cities in India and add new product lines including voice and internet based services

The company also plans to increase its existing client base of over 1,000 customers to cross the 10,000-customer mark. It also has plans to deploy certain funds for the two new companies that it has launched - SpotOn and ValueFirst Connect. The new companies will be individually responsible for handling various aspects of the existing business, as part of their expansion plans.

Speaking on the occasion, Vishwadeep Bajaj, CEO, ValueFirst, said, “We have been in operations for over 5 years, growing and expanding rapidly. This was the most opportune time for us to raise funds for further scaling up as we aim to take ValueFirst from simply being an enterprise mobile messaging company to one that provides holistic communication services for enterprises.” Ben Mathias, executive director of NEA India, said, “ValueFirst has built a solid foundation and partnering with NEA can result in a highly successful enterprise with significant scale.”

NEA’s direct investments in India are primarily in mid- to late-stage projects.

Budgetary support for Department of IT would be increased as compared to last year

With a view to maintaining the fiscal tempo to address the economic slowdown and meet the requirements of infrastructure development, Pranab Mukherjee, the Minister for External Affairs, said budgetary support for Department of IT would be increased.

The Department of IT is set to receive around Rs. 2,652 crore in the Central Plan outlay

The abbreviate BPO stands for Business Process Outsourcing. It is the outsourcing of certain types of work like customer servicing, payroll processing, maintaining accounts, etc. Say for instance if a company is in the business of designing Aircraft engines; by delegating the work of payroll process, employee benefits, etc, to a service provider who specializes in that kind of work,the company could concentrate on its main job; that of designing aircraft engines. This would reduce the expenditure for the company as the wages it has to pay for the personnel doing these types of work in their countries will be much higher than what it pays for the outsourcing work. Opportunities for You: Virtually every work process has been computerized with user friendly software and one need not be technically qualified to process a task that is technical in nature. If you can follow a set of instruction and have the ability to learn, companies will hire you. It is this advantage which the BPO industry provides for a non technical graduate or even for someone who is an undergraduate. If you can speak reasonably good English, are willing to learn new skills and adjust to a new working environment then surely you have a place in this industry.

Benefits you can enjoy: Even if you are a novice, you can expect a minimum amount of Rs 8000 per month, plus other benefits like

· Free transport and canteen facilities

· Opportunities to learn new skills

· Company’s sponsorship for higher studies etc.

· Regular increments, performance based incentives and promotions.