Consolidation in mid tier IT/BPO companies and M&A

The merger and acquisition trend in the mid-size IT space started two years back when MindTree acquired Aztecsoft. Latest one being iGate Acquiring Patni to become a billion Dollar Revenue company. Planning to be a outcome based integrated service provider of both IT and BPO.

In 2009, the IT sector saw close to 92 M&A deals, number of M&A deals increased to 115 in 2010, and industry analysts feel that 2011 will see further substantial increase in M&As.

Ashok Soota started a company happiest Mind after leaving MindTree –

While most IT firms define domain knowledge as either technology practices or industry verticals, Happiest Minds will add a third component – business workflows that will incorporate prototype solutions based on latest technologies.

Wipro Ltd has added to the string of acquisitions it has made in the past two years with the purchase of Science Applications International Corp.’s (Saic) oil and gas IT (information and technology) practice. The company will pay $150 million for the business.

Genpact  has acquired consulting and IT services firm Headstrong Corporation for $ 550 million. Does the merger mean end of pure-play Indian BPO companies?

-Cheers

HP - Strategic priorities

Cloud: HP plans to build a full cloud stack and help transition customers to hybrid cloud environments. HP intends to leverage its scale, reliability and security in its current hardware, software and services offerings. HP also plans to grow its higher-value services that offer greater strategic value.

HP unveiled the company’s plans to build an open applications marketplace that integrates consumer, enterprise and developer services. The platform will support multiple languages and will be open to third-parties. HP will vet applications for security and interoperability to facilitate an environment that is both trusted and open. A device-aware HP cloud will configure and send the appropriate services to the device that the customer is using, and connected devices will intuitively access services the customer needs.

Connectivity: HP also intends to be a leader in the area of connectivity. HP already has a globally distributed installed base in both the consumer and enterprise, and ships two printers and PCs a second, which will be webOS enabled – this huge, growing installed base of devices provides enormous opportunity upon which to build HP-, customer- and ecosystem-driven innovation. HP and its ecosystem of partners will continue to provide context-aware experiences for consumers, SMBs and large enterprises with secure information creation, digitization, transformation and consumption — anytime, anywhere.

Software: Through a build, buy and partner approach, HP intends to continue to enhance its leading management and security portfolio. Using that as a foundation, the company plans to address real-time analytics for “Big Data,” which is the combination of structured and the much faster growing unstructured data set. Upon completion, HP’s acquisition of Vertica will provide an important asset in this area. HP’s digitization offering also provides important information management capabilities that can be verticalized for specific industries. HP will continue to invest in leading-edge technologies and services that go beyond today’s limited point solutions to protect the modern enterprise and provide the security and information backbone that enterprises rely on for visibility and insight across distributed infrastructures and new hybrid environments.

-Cheers

Platform Play...

The cloud computing era is just beginning - The prevailing patterns, standards and best practices of cloud software engineering have not yet been established. This represents an opportunity for new software providers to build a leading presence in the software solutions market. It is also a major technical and business challenge to the established software vendors — to retain their leadership by extending into the new space without undermining their hard-earned strength in the dominant on-premises computing market.

During the next two years, the fragmented, specialized PaaS offerings will begin to consolidate into suites of services targeting the prevailing use patterns for PaaS.

Making use of such preintegrated, targeted suites will be a more attractive proposition than the burdensome traditional on-premises assembly of middleware capabilities in support of a project.

By 2015, comprehensive PaaS suites will be designed to deliver a combination of most specialized forms of PaaS in one integrated offering.

Gartner predicts that by 2015, most enterprises will have part of their run-the-business software functionally executing in the cloud, using PaaS services or technologies directly or indirectly.

-Cheers

Security - Product on Watch List

Tectia Guardian is part of Tectia Manage Solutions, which allow organizations
to ensure that their critical business infrastructure is secure, reliable, and
compliant with relevant industry regulations and standards. Tectia Guardian in
particular provides a proactive set of security controls for critical data
channels to minimize the risk of security breaches.

It is a unique governance tool, which integrates into existing IDS/DLP-
Intrusion Detection System/Data Loss Prevention solution. It allows
enterprises and governmental agencies to activate auditing and control of their
critical services and outsourced IT operations without changing their daily
operations, infrastructure, or user experience, ensuring the lowest
implementation and operational costs.

The inspection, full replay, and archiving of internal and external remote
administration connections helps to ensure accountability and meets the data
security compliance requirements of regulations such as the Sarbanes-Oxley Act
(SOX), Payment Card Industry Data Security Standard (PCI DSS), Federal
Information Security Management Act (FISMA), and U.S. Department of Defense
(DoD) directives and other mandates requiring encrypted traffic to be
inspected, audited and controlled.

Tectia Guardian 3.0 enhances its comprehensive list of supported protocols,
allowing companies using VMWare View and the latest Windows protocols to take
full advantage of their environment. Support for secure file transfer protocols
allows organizations to extend auditing and control from remote system
administration to secure file transfers.  Available as a virtual appliance,
Tectia Guardian 3.0 also provides enhanced availability, and search and
reporting functions.

-Cheers

Enterprise grade Mobile Device Managment (MDM)

Mobile Device Management (MDM) software secures, monitors, manages and supports mobile devices deployed across an enterprise. Enterprise-grade MDM functionality typically includes over-the-air distribution of applications, data and configuration settings for all types of mobile devices, including mobile phones, , smart-phones, i-Pads, tablet computers etc. The intent of MDM is to optimize the functionality and security of a mobile communications network, while minimizing cost and downtime. This applies to both company-owned and employee-owned devices being utilized across the enterprise.

Typically solutions include a server component, which sends out the management commands to the mobile devices, and a client command, which runs on the handset and receives and implements the management commands. In some cases, a single vendor may provide both the client and the server, in others client and server will come from different sources.

An administrator at the mobile operator, an enterprise IT data center or a handset OEM can use an administrative console to update or configure any one handset, group or groups of handsets. This obviously provides scalability benefits particularly useful when the devices being manged are large in numbers.

Some of the functionalities desired in MDM platform are –

• Firmware over the air updates
• Remote Diagnostics
• Remote Configuration and Provisioning
• Security
• Backup/Restore
• Network Usage and Support
• Application Deployment
• Mobile Asset Tracking and Management
• Remote Lock and Wipe
• Device Provisioning
• Software Installation
• Troubleshooting
• Policy Application
• Logging and Reporting
• Remote Control and Administration

Three device management software vendors announced versions of their applications exploiting the new APIs. The applications are: Afaria from Sybase, Mobile Device Manager from AirWatch and Virtual Smartphone Platform from MobileIron. All three are intended to provide centralized management for Apple iOS 4 devices.

-Cheers

Indian IT companies Competitive Advantage - People.

Indian IT Companies who would be successful in next 5 years would be the one who would tap their competitive advantage and not the one who work on the strategy with McKinsey’s or Work on people cost management plan with Mercer or Global Organization Models with Deloitte…   

Infosys and Wipro had done it in past but need refocus on same. HCL and Cognizant are doing it now and are reaping the benefits.   

In Harvard study of leaders in India at Infosys, Reliance Industries, Tata, Mahindra & Mahindra, Aventis Pharma, and many others, a picture emerged of a distinctive Indian model. None of the leaders they interviewed suggested that their companies had succeeded because of their own cleverness at strategy or even because of the efforts of a top team. They didn’t mention skill in financial markets, mergers and acquisitions, or deal making—talents that Western CEOs often claim underpin their companies’ performance. Almost without exception, these leaders, like Nayar, said their source of competitive advantage lay deep inside their companies, in their people.

That may sound like posturing, but the research puts hard numbers on the characteristic ways Indian leaders invest in people. Far more than their Western counterparts, these leaders and their organizations take a long-term, internally focused view. They work to create a sense of social mission that is served when the business succeeds. They make aggressive investments in employee development, despite tight labor markets and widespread job-hopping. And they strive for a high level of employee engagement and openness.

-Cheers

Platform is burning....

Letter from Nokia CEO to employees on why he thinks that his Platform is Burning and why he should work with Microsoft to survive and come back to tell the story.... 

Hello there,

There is a pertinent story about a man who was working on an oil platform in the North Sea. He woke up one night from a loud explosion, which suddenly set his entire oil platform on fire. In mere moments, he was surrounded by flames. Through the smoke and heat, he barely made his way out of the chaos to the platform's edge. When he looked down over the edge, all he could see were the dark, cold, foreboding Atlantic waters.

As the fire approached him, the man had mere seconds to react. He could stand on the platform, and inevitably be consumed by the burning flames. Or, he could plunge 30 meters in to the freezing waters. The man was standing upon a "burning platform," and he needed to make a choice.

He decided to jump. It was unexpected. In ordinary circumstances, the man would never consider plunging into icy waters. But these were not ordinary times - his platform was on fire. The man survived the fall and the waters. After he was rescued, he noted that a "burning platform" caused a radical change in his behaviour.

We too, are standing on a "burning platform," and we must decide how we are going to change our behaviour.

Over the past few months, I've shared with you what I've heard from our shareholders, operators, developers, suppliers and from you. Today, I'm going to share what I've learned and what I have come to believe.

I have learned that we are standing on a burning platform.

And, we have more than one explosion - we have multiple points of scorching heat that are fuelling a blazing fire around us.

For example, there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem.

In 2008, Apple's market share in the $300+ price range was 25 percent; by 2010 it escalated to 61 percent. They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010. Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range.

And then, there is Android. In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers. Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core.

Let's not forget about the low-end price range. In 2008, MediaTek supplied complete reference designs for phone chipsets, which enabled manufacturers in the Shenzhen region of China to produce phones at an unbelievable pace. By some accounts, this ecosystem now produces more than one third of the phones sold globally - taking share from us in emerging markets.

While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time. At that time, we thought we were making the right decisions; but, with the benefit of hindsight, we now find ourselves years behind.

The first iPhone shipped in 2007, and we still don't have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.

We have some brilliant sources of innovation inside Nokia, but we are not bringing it to market fast enough. We thought MeeGo would be a platform for winning high-end smartphones. However, at this rate, by the end of 2011, we might have only one MeeGo product in the market.

At the midrange, we have Symbian. It has proven to be non-competitive in leading markets like North America. Additionally, Symbian is proving to be an increasingly difficult environment in which to develop to meet the continuously expanding consumer requirements, leading to slowness in product development and also creating a disadvantage when we seek to take advantage of new hardware platforms. As a result, if we continue like before, we will get further and further behind, while our competitors advance further and further ahead.

At the lower-end price range, Chinese OEMs are cranking out a device much faster than, as one Nokia employee said only partially in jest, "the time that it takes us to polish a PowerPoint presentation." They are fast, they are cheap, and they are challenging us.

And the truly perplexing aspect is that we're not even fighting with the right weapons. We are still too often trying to approach each price range on a device-to-device basis.

The battle of devices has now become a war of ecosystems, where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren't taking our market share with devices; they are taking our market share with an entire ecosystem. This means we're going to have to decide how we either build, catalyse or join an ecosystem.

This is one of the decisions we need to make. In the meantime, we've lost market share, we've lost mind share and we've lost time.

On Tuesday, Standard & Poor's informed that they will put our A long term and A-1 short term ratings on negative credit watch. This is a similar rating action to the one that Moody's took last week. Basically it means that during the next few weeks they will make an analysis of Nokia, and decide on a possible credit rating downgrade. Why are these credit agencies contemplating these changes? Because they are concerned about our competitiveness.

Consumer preference for Nokia declined worldwide. In the UK, our brand preference has slipped to 20 percent, which is 8 percent lower than last year. That means only 1 out of 5 people in the UK prefer Nokia to other brands. It's also down in the other markets, which are traditionally our strongholds: Russia, Germany, Indonesia, UAE, and on and on and on.

How did we get to this point? Why did we fall behind when the world around us evolved?

This is what I have been trying to understand. I believe at least some of it has been due to our attitude inside Nokia. We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven't been delivering innovation fast enough. We're not collaborating internally.

Nokia, our platform is burning.

We are working on a path forward -- a path to rebuild our market leadership. When we share the new strategy on February 11, it will be a huge effort to transform our company. But, I believe that together, we can face the challenges ahead of us. Together, we can choose to define our future.

The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same.

Stephen. CEO Nokia

-Cheers

Empire Strikes back…Nokia

Apple’s iphone  killed Nokia’s Smart phone market share and Motorola, HTC, Samsung with Google’s Android put the last dagger… Now will Nokia Strike back with Microsoft as Partner?

Nokia and Microsoft will combine assets and jointly develop and market mobile products. Nokia’s Maps product will become a core part of Microsoft’s services, while Microsoft’s development tools will create applications for Nokia Windows phones.

Nokia brings with it, its "tremendous brand,"  and also mobile devices, an application store, and maps.
Microsoft will bring the Windows Phone 7 software, and brands including Office, Xbox Live and Bing.

Nokia will divide into two units: Smart Devices and Mobile Phones.

Nokia will bring out a device this year on MeeGo. MeeGo engineers will then be shifted to work on innovations that can help Nokia leapfrog rivals.

Nokia plans to ship another 150 million phones based on its current smartphone operating system Symbian. However, announcement that "Windows Phone is our primary platform" in effect spells the end of Symbian.

Nokia plans to “substantially reduce” its research and development budget. At 5.9 billion euros ($8.1 billion), Nokia’s corporate R&D spending is more than four times that of Apple’s.

Nokia said  there will be “significant reductions” in Nokia jobs. "There will be substantial reductions in employment in various locations around the world and that too will affect Finland.

Nokia has already  announced 1,800 job cuts in the workforce of more than 120,000.

Nokia had extensive discussions with Google but that there was insufficient opportunity for Nokia to “differentiate” its products from others such as those made by Motorola, HTC or Samsung. There was also, with Google's strength in mapping, little chance for Nokia to get much out of its own strength in maps.

-Cheers
PS: Also Read letter from Nokia CEO to employees....Platform is burning...Instead of pointing to link I will just copy it for future reference and post it as seprate blog...!

Forrester Research report

SaaS faces major obstacles in four broad sectors of software. They include lower-level elements of the stack, such as operating systems and databases; software for internal IT management and data management; "legacy, entrenched process applications"; and vertical applications, such as a securities transaction processing system, Forrester said.

SaaS is making inroads in mature application areas such as SCM (supply change management), particularly when the customer hasn't already purchased such functionality from an on-premises vendor.

SaaS is starting to shake things up in areas like CRM (customer relationship management) and human resources, where it is replacing on-premises systems.

SaaS is also making some inroads in GRC (governance, risk and compliance) and application development, Forrester added.

SaaS is now the majority model for software sales and delivery in e-purchasing, expense reporting tools and blogging & wiki platforms.

-Cheers

Buzz in Indian IT Industry

Y2011 for Indian IT Industry –

Focused strategy: In the past, IT industry has been large supply-driven. There was a lot of demand and those who were able to keep the delivery engine going were the winners. This system generally emphasized ability to hire and deliver over sales, marketing and company strategy. However, in an industry with increased competition, that is likely to change and winners are those who have a razor-sharp focus rather than pursuing all business.

2011: Watch for more firms to tighten their strategies and get more focused. Bottom-up, consensus-driven business plans will give way to top-down decisive strategies

Consultative Approach: Cognizant entering the top 3 and Patni-iGATE combo providing another $1 billion firm will provide more viable options for clients. This is likely to lead to pricing pressure on the incumbent providers. The only two routes to avoid this are (a) non-linear, more automated delivery and (b) consultative solutions

2011: Watch for investments in non-linear platforms and greater focus on consulting.

Sales & Marketing: As we move from a supply-driven phase to one that is more demand driven in an era of consolidation, brand differentiation and brand premium matter much more. In addition, as the market gets tougher, there will be greater emphasis on managing the offerings portfolio and understanding technology trends - a great opportunity for marketing to play a more strategic role.

2011: Expect the enlightened few to start investing in a strong brand. The front-runners will break away for the tag of “Indian IT” and be seen as global players like IBM and Accenture

-Cheers

Back-up in Cloud - good solution

Riverbed Whitewater Appliance is a new product that was introduced in November-2010.  It optimizes backups into the cloud, using the same kinds of de-duplication and optimization that Riverbed Steelhead appliances use across the WAN.  It brings security (SSL, 256-bit AES), and reduction in the amount of data that flows into the cloud, while keeping a local copy of the backed up data on the appliance.  And it works with most current backup applications - NetBackup, Backup Exec etc.

Whitewater appliances leverage a number of characteristics to deliver optimum performance for accelerating backups to cloud storage.

Deduplication- Industry-leading deduplication eliminates redundant data within backup streams. The Whitewater appliance’s deduplication is byte-based with variable-size dedupe segments. This is more granular than regular fixed or variable block-based deduplication and provides an additional 50-70 percent savings on storage and bandwidth requirements.

Security- The data ingested by Whitewater appliances is secured with 256-bit AES at rest, and with SSL v3 in-flight across the network. This dual layer of security minimizes the risk of data being compromised.

Local storage The Whitewater appliance has a finite-sized disk. This keeps backup data local while it’s replicated to the cloud. Most recent restores come from the appliance, and are also local. If older restores are needed, the data is brought back from the cloud.

Integration- Whitewater appliances integrate with existing backup products and can be mounted as a CIFS or NFS target to the media server. At the backend they write directly to cloud storage via REST/HTTP/SOAP APIs. This is done without any rip-and-replace of existing backup systems, and with minimal configuration changes.

-Cheers

Patni's cloud journey...

Standardization - Consolidation-Virtulization- Extreme Virtulization - Private Cloud- Public Cloud...

Patni views cloud computing as the next evolution of its own internal data center consolidation. The company went virtual and runs about 90% of its line of business applications in a private cloud -- it's now in the process of moving about 30% of that cloud into AWS - Amazon.

“In the last eight months we have started moving much of the dev environment onto the AWS platform,” said Satish Joshi, executive vice president for Patni.
Patni started by developing monitoring and provisioning systems based on VMware’s APIs and had managed an eye-popping level of consolidation.

Patni supports 15,000 users on about 80 high-octane servers (two racks) that run 400 virtual machines. It runs an additional 200 legacy physical servers for certain older applications that it’s not convenient to move but which may eventually get phased out. It also runs hosting environments for many customers, many of which are virtualized, but they’re not part of Patni’s private cloud environment.
The firm plans to move about 30% of that cloud infrastructure directly to Amazon overall, and expects the three-year cost to come in at around $1.7 million, a 15% savings over internal operation. While the savings weren’t out of this world, in his view, the real benefits were not in the cost, but in the flexibility a public cloud environment enables.

There isn't a good way to quantify that, but what you gain is definitely a benefit. … Our internal provisioning time used to be days and now that has been cut down to less than a day.
Patni has been in operation for more than twenty years, and he said the biggest headache in the move to a hybrid cloud platform was standardization across what was practically a living history museum of IT hardware.

We had all the vintages of server hardware, all vintages of networking gear. There was a lot of standardization we had to do. Patni’s move to cloud was really driven by the need to stay ahead of its customers, who were also clamoring for next-generation platforms. By now most of its customers will have done some kind of virtualization and some streamlining and now wanted different types of service. Probably the biggest change has been in the nature of the engagement.

Of course, there are always tradeoffs. Patni and other MSPs love the flexibility and utility of cloud, but it’s remote; and for a global organization, that is a critical issue. Joshi said that careful planning and study are necessary for anyone venturing into the cloud.

Part of this migration plan actually includes increased spending on communication infrastructure. If the expansion of communication infrastructure was not required, the saving would have been much more dramatic.