Lotus Notes, Domino & Outsourcing

Gartner released its brief IT Outsourcing to India - Analysis of Cities (PDF File) this week analyzing the different Indian cities on their potential to emerge as leaders in the Offshore Outsourcing market.

The presentation starts with a question that summarizes how most people view the IT Outsourcing trend to India .. “Isn’t all of India like Bangalore?” and goes onto classify cities into Tiers, outline factors for evaluation (including Infrastructure, Skills Availability, Skills Retention, Access, Political Support, an “Expatriate Index” and Cost of Living) and a rating of the cities on these factors.

The report ranks Chennai very high - E (Excellent) or VG (Very Good) on all factors but for Infrastructure for which Chennai gets a G (Good) and improving. Chennai is obviously one of the best bets for companies looking at offshore operations - either captive or outsourced.

We have been advising clients who look at the offshore decision helping them through the tasks involved in setting up operations in India, and we do notice Chennai becoming very attractive for people considering offshore.

Good going Chennai.

The launch of Blackberry devices and service by Airtel pushes the envelop of what is feasible to do while mobile in India. Ofcourse, Blackberry devices support secure access to Domino data, and Domino with Blackberry is one of the hottest emerging niches. We are gearing ourselves up for action both in the local Indian market and in the offshore markets of US by picking up skills on Blackberry and using Blackberry to access Lotus Domino data.

The latest print edition of Dataquest has a special coverage of Chennai. While Bangalore and Hyderabad have been hogging all the limelight around offshore outsourcing and software services in the media, good ol’ Chennai has been slowly and steadily chugging towards a fairly enviable software services industry. We have always known it in running our Lotus Notes Outsourcing business, and it is good to see the trade media recognizing it. Some highlights from the article:

• Chennai (Tamil Nadu) is the third largest recipient of FDI into India
• The state has 25 universities, and 250 engineering colleges producing over 70,000 engineering graduates of whom 35,000 are from IT, CS and related backgrounds.
• Chennai has upto 50% lower attrition compared to other locations
• Real Estate prices in Chennai are 30 - 40% cheaper than Bangalore
• Chennai has 99.7% power availability, far more than what Bangalore has
• Chennai has excellent connectivity with bandwidth in excess of 13 Tbps+ being the nodal point for interconnect with Singapore and other East Asian countries
• Chennai has good international connections with seamless connection to South East Asia and Europe

The present government and its competent IT secretary, Vivek Harinarain have been slowly working towards selling the state as an investment destination. With wins like Yahoo and HP, and existing operations of CA, Verizon, World Bank, McKinsey and others, Chennai will be a big player in the years to come.

I’ve always been bugged by the number of ads I saw of GoToMyPC. I’m a big fan of VNC and I thought GoToMyPC could be a tricky deal, given that connections are being routed through their server. I realized yesterday that this is a Citrix venture, and that changes my perception big time. Remote access, as enabled by these tools are a big part of what is collapsing distance in the world. Quite often, when I work on offshore Lotus Notes projects, I have clients facing problems with a release that I cannot easily understand. I wish I could be there next to him/her, seeing what he sees on his desktop. Sure, Domino Administrator is way too cool as a remote administration tool, and it collapses distance quite a bit. But the problems are typically what is outside the purview of Domino Administrator. Quite often they are with the desktop, when an application is being installed over a Notes Client. Remote access tools are quite the savior in this aspect. While VNC does great, Citrix would do better, given the way they transparently handle the installation process and given that they just send the updates to the screen and inputs and not the entire images every time. With near T1 speeds becoming common in India, I anticipate a big jump in the kind of things you can do for overseas customers with these enabling services.

This makes me feel that we are only just beginning with this globalization of service delivery thingie!!

- Venki

META Group has come out with a report doing a reality check on the offshore outsourcing trend. Here is the summary:

• By 2006, Most IT Organizations Will Have an Offshore Strategy
• Offshore Outsourcing Market Exceeds $10 Billion
• Average Enterprise to Offshore 60% of Application Work by 2009
• Political Backlash Toward Offshore Not Deterring Market Adoption

For those of us on this side of the offshoring trend, the consolidation of the trend is visible. We see more international names, recruitment ads that shows a distinct increase in the offshoring activity. What is even more interesting is the way the bigger offshore outsourcing firms are going mainstream. It is very clear that Infosys, Wipro and TCS are interested in going beyond the offshore tag, and acquiring capabilities and an image that positions them as total IT solutions providers. This often implies going in for acquisitions, taking on a bigger local workforce in the relevant markets and a determined push away from the low cost perception.

We will follow the moves of the offshore biggies here. Do come back for more news.

The momentum that Infosys has been gathering is clear from its latest results. A nearly 50% jump in revenues, and heading towards the $2 bn. mark. The differentiation Infosys has always pursued compared to other offshore majors is soon going to show. Check out this interesting interview with Nandan Nilekani.

Interesting report on the Russian outsourcing scenario in SearchCIO. The report outlines where Russia stands in comparison with India and other players. Very well written. Check it out.

- Venki
Lotus Notes Outsourcing Specialists

This news item is about BPO from the insurance sector.

BFSI is a biggie when it comes to outsourcing. The software industry has seen a lot of BFSI action with dedicated players like Polaris, Mphasis and iFlex gaining good ground in the industry. The BPO trend is accelerating and we should see some substantial outsourcing deals in the coming months.

- Venki

This news item is about BPO from the insurance sector.

BFSI is a biggie when it comes to outsourcing. The software industry has seen a lot of BFSI action with dedicated players like Polaris, Mphasis and iFlex gaining good ground in the industry. The BPO trend is accelerating and we should see some substantial outsourcing deals in the coming months.

- Venki

I’ve always wondered when industry events will start going online, instead of forcing people to travel long distances etc. Here is one : IT Offshore 2004.

It is an online conference about Trends, Issues and Tools for Global Outsourcing Relationships. Conference is being done online.

Interesting article in News.com about how offshore companies are using different words to describe offshoring.

Well, the article quotes Infosys using the term “Global Delivery Model” instead of “offshoring” as an instance of such euphimism. Infosys has been using the term for quite a while, well before offshoring became controversial. They started using it to differentiate, and it was a good attempt to own a good sound byte in customers’ mind. But I wouldn’t be surprised if people do resort to avoiding controversial phrases.

This article from www.codeproject.com is among the best of material I’ve read analyzing this whole offshore trend. Absolute must read for anyone affected by offshore - either side of the spectrum.

- Venki

An interesting article in SearchCIO .. published a few weeks back, but I stumbled on it only today. Two of their editors argue whether the offshoring issue is real or hyped.

I found the following statistics from the article very interesting:

• Of the 2.7 million jobs lost in the last three years, only 300,000 were lost because of offshore outsourcing.
• Business Week magazine reports that 1% of productivity growth can eliminate up to 1.3 million jobs a year.
• According to the Organization for International Investment (OFII), foreign companies with U.S. offices employ a record high 6.4 million Americans and support an annual payroll of $350 billion, which is heavily invested in the U.S. economy.
• The OFII also reports over the last 15 years, total insourced jobs grew by 117% and total outsourced jobs grew by 56%.
• A 2003 report put out by the market research company International Data Corp. and which was cited by the Associated Press, Los Angeles Times and The Wall Street Journal was later called “a little wobbly” by an IDC spokesman.
• U.S. educational institutions collected $1.2 billion from Indian nationals in 2002, a reported six times the amount received from British students.
• According to The Economist, America’s population grew by 23.9% between 1980 and 2002. The number of employed Americans grew by 37.4% in the same period, a near record high.

Motorola has had its share of success with the wireless handheld and infrastructure market in India. Now they are clearly articulating their plan to focus on India, both as a market and as a research & development hub. Check out the Economic Times interview with Mr Mike Zafirovski, president and chief operating officer of Motorola.

I found this comment insightful:
Asked if technology companies of the future would necessarily have to have an India presence , as some venture capitalists believe, Mr Zafirovski was more candid: “Nothing is that imperative. Offshore presence is necessary for the business model, but it could be in other low-cost countries. However, I would say that a technology company would fail in its IQ test if it did not have anything significant in India. There’s quality, speed, process orientation in India and at a cost that’s still attractive.”

- Venki