Hewlett-Packard executives expect sales of IT products to rebound in the coming year and they said the company is positioned to outpace the market and record overall sales growth between 3 and 4 percent in 2010.
"We think we have the best portfolio of technologies and services in the industry," said CEO Mark Hurd, speaking at a securities analyst meeting Thursday. "We're pretty well-positioned to go out in the marketplace and win. I think HP's best days are ahead of it, not behind it."
"Our current view is that the IT market returns to growth in fiscal 2010. And given the strength of our portfolio and ongoing investments in market coverage, we do expect to grow faster than the market," said CFO Cathie Lesjak.
HP is in the midst of its fourth fiscal quarter that ends Oct. 31. For the third quarter ended July 31, the company reported a 2 percent decline in sales to $27.5 billion and a 19 percent drop in earnings to $1.6 billion.
But the focus of the analyst meeting was fiscal 2010. Hurd said HP's addressable market, including PCs, servers, storage, printers, networking, software and services, is $1.3 trillion.
Hurd said he expects sales growth in the IT market to resume in 2010, then added: "We will grow faster than the IT market."
HP predicts that its sales in fiscal 2010 will reach $117 billion to $118 billion, up 3 to 4 percent over fiscal 2009, Lesjak told analysts. Earnings will be between $3.60 and $3.70 per share.
The CFO said HP is forecasting that sales from its personal systems group will grow between 3 and 5 percent in fiscal 2010, but sales from its imaging and printing group will be flat by up to 2 percent.
Enterprise systems and storage technology sales will grow between 2 and 4 percent in fiscal 2010, as will HP services. HP software sales will grow between 7 and 9 percent.
Hurd said HP's cost structure is "much improved from several years ago," but later added: "We don't quite have HP operating as effectively as we can." He said there is still "material opportunity for us" to improve the company's operating efficiencies.
One place HP is still cutting costs is in its EDS services unit, which it renamed HP Enterprise Services this week. So far this year, HP has cut $900 million in operating costs out of the operation through the company's integration efforts, Lesjak said, with plans to cut another $1.2 billion through 2010.
Showing posts with label IT Budget. Show all posts
Showing posts with label IT Budget. Show all posts
Saturday, October 24, 2009
Wednesday, September 30, 2009
Pressure on India Other Markets take marketshare in BPO and IT
The global information technology and business process outsourcing market will end 2009 with total revenues of $373 billion, 14.4 per cent higher than the $326 billion recorded in 2008.
India and China will remain at the top of the list, with expected revenues amounting to $48 billion and $28 billion, respectively.
India would have 44.8 per cent of the total outsourcing pie and China 25.9 per cent, according to Canadian-based ICT research and advisory firm XMG Global.
The growth rate for 2009 will be, however, less than the 19 per cent that the industry recorded in 2008 over 2007, XMG said in its annual year-end prediction of where the offshoring and global outsourcing industry will finish.
“The market share of India is similar to 2008 and has mostly to do with the Satyam accounting adjustments and the shifting of work to other offshore countries. In other words, we are seeing new levels of normalcy in which the recession has provided the opportunity to rationalise and shift work to offshore destinations other than India,” XMG Global’s Senior Analyst, Mr Vincent Altez, said in the report.
The Philippines is expected to close the year with $7.3 billion or 21.7 per cent growth — lower than the 24 per cent growth forecast due to the slower growth for IT services and the delay in expansion plans of several captive players. Foreign direct investment is also expected to slide this year as investors are streamlining capital.
Pressure on India
While South Africa, Egypt and Mexico are emerging as alternative destinations for offshoring, the Chinese and Vietnamese governments continue to attract foreign investors and build advance infrastructure, putting pressure on mature offshore countries such as India..
India and China will remain at the top of the list, with expected revenues amounting to $48 billion and $28 billion, respectively.
India would have 44.8 per cent of the total outsourcing pie and China 25.9 per cent, according to Canadian-based ICT research and advisory firm XMG Global.
The growth rate for 2009 will be, however, less than the 19 per cent that the industry recorded in 2008 over 2007, XMG said in its annual year-end prediction of where the offshoring and global outsourcing industry will finish.
“The market share of India is similar to 2008 and has mostly to do with the Satyam accounting adjustments and the shifting of work to other offshore countries. In other words, we are seeing new levels of normalcy in which the recession has provided the opportunity to rationalise and shift work to offshore destinations other than India,” XMG Global’s Senior Analyst, Mr Vincent Altez, said in the report.
The Philippines is expected to close the year with $7.3 billion or 21.7 per cent growth — lower than the 24 per cent growth forecast due to the slower growth for IT services and the delay in expansion plans of several captive players. Foreign direct investment is also expected to slide this year as investors are streamlining capital.
Pressure on India
While South Africa, Egypt and Mexico are emerging as alternative destinations for offshoring, the Chinese and Vietnamese governments continue to attract foreign investors and build advance infrastructure, putting pressure on mature offshore countries such as India..
Sunday, September 27, 2009
IBM has 36% market share in India
IBM, the world’s biggest software services provider, continues to gain more business in the domestic information technology market, and is set to control almost half of the domestic outsourcing market by 2010.
At least two experts tracking India’s $5.6-billion market for software outsourcing said, requesting anonymity, that IBM currently has around 36% share, and is set to control almost half the domestic outsourcing market by 2010.
“In terms of revenues, IBM’s share will be 50-60% already,” the expert helping Indian enterprises plans their IT spend told ET. “In terms of number of contracts, the company should be able to achieve 50% share in a year or two.”
Top Indian software exporters such as TCS, Infosys and Wipro are also attempting to address the lucrative Indian market for services at a time when their key markets, the US and Europe, are seeing a slump.
However, Indian tech firms will find it tough to challenge IBM’s strengths in offering hardware, software, outsourcing and consulting, as an integrated solution to clients.
Apart from mega outsourcing contracts worth anywhere between $500 million and $1 billion from telcos such as Bharti Airtel, Idea Cellular and Vodafone, IBM has been able to remain aggressive when it comes to smaller, but strategic deals from companies like Tata Sky and HPCL.
“We helped Tata Sky differentiate and achieve a competitive positioning by offering innovative services such as prepaid recharge options for subscribers,” said Ponani Gopalakrishnan, vice-president of IBM’s India Software Labs.
Indian companies, like their counterparts in the US and Europe are seeking to bring down their operational costs by 10-30%. Customers such as Tata Sky and HPCL are increasingly turning to IBM for innovative solutions that help them achieve competitive edge.
The HPCL contract worth around $2.2 million, for implementing radio frequency identification device, will help the petroleum company streamline its processes of bottling, supplying and tracking over 500,000 LPG cylinders in the first phase.
Ms Gopalakrishnan who holds over 20 patents granted by the US patent office, along with a few hundred researchers at the lab are solving business problems and helping new businesses such as Tata Sky raise entry barriers for new entrants through innovative solutions.
“We helped Tata Sky integrate its back-end capabilities with IT infrastructure using SOA,” said Ms Gopalakrishnan. SOA, or service-oriented architecture, helps enterprises integrate their business processes, and deliver flexible IT-based services to users. Tata Sky aims to have around eight million subscribers by 2012.
While some of these outsourcing contracts are smaller in size when signed, IBM is able to evolve these engagements into bigger, multi-year contracts.
At least two experts tracking India’s $5.6-billion market for software outsourcing said, requesting anonymity, that IBM currently has around 36% share, and is set to control almost half the domestic outsourcing market by 2010.
“In terms of revenues, IBM’s share will be 50-60% already,” the expert helping Indian enterprises plans their IT spend told ET. “In terms of number of contracts, the company should be able to achieve 50% share in a year or two.”
Top Indian software exporters such as TCS, Infosys and Wipro are also attempting to address the lucrative Indian market for services at a time when their key markets, the US and Europe, are seeing a slump.
However, Indian tech firms will find it tough to challenge IBM’s strengths in offering hardware, software, outsourcing and consulting, as an integrated solution to clients.
Apart from mega outsourcing contracts worth anywhere between $500 million and $1 billion from telcos such as Bharti Airtel, Idea Cellular and Vodafone, IBM has been able to remain aggressive when it comes to smaller, but strategic deals from companies like Tata Sky and HPCL.
“We helped Tata Sky differentiate and achieve a competitive positioning by offering innovative services such as prepaid recharge options for subscribers,” said Ponani Gopalakrishnan, vice-president of IBM’s India Software Labs.
Indian companies, like their counterparts in the US and Europe are seeking to bring down their operational costs by 10-30%. Customers such as Tata Sky and HPCL are increasingly turning to IBM for innovative solutions that help them achieve competitive edge.
The HPCL contract worth around $2.2 million, for implementing radio frequency identification device, will help the petroleum company streamline its processes of bottling, supplying and tracking over 500,000 LPG cylinders in the first phase.
Ms Gopalakrishnan who holds over 20 patents granted by the US patent office, along with a few hundred researchers at the lab are solving business problems and helping new businesses such as Tata Sky raise entry barriers for new entrants through innovative solutions.
“We helped Tata Sky integrate its back-end capabilities with IT infrastructure using SOA,” said Ms Gopalakrishnan. SOA, or service-oriented architecture, helps enterprises integrate their business processes, and deliver flexible IT-based services to users. Tata Sky aims to have around eight million subscribers by 2012.
While some of these outsourcing contracts are smaller in size when signed, IBM is able to evolve these engagements into bigger, multi-year contracts.
Saturday, September 26, 2009
TCS nets project from Andhra Pradesh
MUMBAI: Tata Consultancy Services (TCS), has secured a five-year project to build and operate a State Wide Area Network (SWAN) in Andhra Pradesh. The project will be based on a Build, Own, Operate and Transfer (BOOT) model. This is the fourth SWAN project TCS has bagged in a row.
Wipro, an outsourcing firm also announced that it had won a three-year IT services contract from Aquarion Water Company, one of the largest water utilities in the U.S. Financial details of the deal were not disclosed.
The project will enable the Andhra Pradesh government to start and run various e-governance projects and citizen services. This would bring about significant efficiencies in G2G and G2C services of the state, which will help in bringing complete transformation in the e-governance structure. The project would be rolled out in 12 months and TCS will then maintain it for five years.
"We are happy to partner with Tata Consultancy Services for this project. This ambitious APSWAN project is an initiative of the state government to take a wide array of government services to the common man in the remotest corner of the state," Dr. Sameer Sharma, (IAS) IT Secretary & Chairman of Andhra Pradesh Technology Services told IndiaInfoline.
TCS has however not disclosed the financial details of the contract. The IT firm is currently developing similar projects for three other regional governments in the country, it said in a statement.
"This win is yet another endorsement of TCS' capabilities in the full services space. We are extremely happy to engage further with the Andhra government. For APSWAN, we will lay a statewide network of IT infrastructure and set up common service centres for citizens to take advantage of e-government services delivered at their doorstep. TCS would set up a state-of-the-art Network Operations Centre (NOC) and helpdesk for round the clock monitoring of the facility and services," said Tanmoy Chakrabarty, Vice President and Head of government ISU.
Wipro, an outsourcing firm also announced that it had won a three-year IT services contract from Aquarion Water Company, one of the largest water utilities in the U.S. Financial details of the deal were not disclosed.
The project will enable the Andhra Pradesh government to start and run various e-governance projects and citizen services. This would bring about significant efficiencies in G2G and G2C services of the state, which will help in bringing complete transformation in the e-governance structure. The project would be rolled out in 12 months and TCS will then maintain it for five years.
"We are happy to partner with Tata Consultancy Services for this project. This ambitious APSWAN project is an initiative of the state government to take a wide array of government services to the common man in the remotest corner of the state," Dr. Sameer Sharma, (IAS) IT Secretary & Chairman of Andhra Pradesh Technology Services told IndiaInfoline.
TCS has however not disclosed the financial details of the contract. The IT firm is currently developing similar projects for three other regional governments in the country, it said in a statement.
"This win is yet another endorsement of TCS' capabilities in the full services space. We are extremely happy to engage further with the Andhra government. For APSWAN, we will lay a statewide network of IT infrastructure and set up common service centres for citizens to take advantage of e-government services delivered at their doorstep. TCS would set up a state-of-the-art Network Operations Centre (NOC) and helpdesk for round the clock monitoring of the facility and services," said Tanmoy Chakrabarty, Vice President and Head of government ISU.
Patni Targets Acquisitions in US and Continental Europe
Bangalore: Patni is eyeing two acquisitions; one each in the U.S. and Continental Europe, and plans to close at least one transaction by November 2009. The company has been negotiating with both these companies for the past three months and possibly within the next few weeks, the term sheets are likely to be exchanged. A term-sheet refers to an agreement between two companies to pursue negotiations to conclude a potential M&A (Mergers and Acquisitions) transaction.
Multiple sources familiar with Patni's acquisition plans said that the company wants to cross the $1-billion mark in revenues through inorganic growth, and compete more effectively with TCS, Infosys and Wipro for large multi-year outsourcing contracts. An anonymous source said that Patni was chasing an enterprise resource planning (ERP) services firm in continental Europe with around $400 million in revenues, while the U.S. target with expertise in insurance solutions area is closer to $150 million in revenues. Banking and financial services industry (BFSI), which includes serving customers such as Guardian Life Insurance, is one of the fastest growing businesses for Patni.
In a telephonic interview to the Economic Times, Patni CEO Jeya Kumar said that the company was indeed pursuing acquisition opportunities for accessing newer markets and scaling up existing domain capabilities. "We would either acquire a company for its pure IP within a particular domain, or for gaining access to a growing market."
According to U.S. based financial analyst, Patni should have around $400 million in cash by the end of 2009. Kumar, who joined Patni in February earlier this year, has been working on transforming Patni's internal processes. Experts such as James Friedman of Susquehanna International Group (SIG) said that the company has already moved in sync with tier-I suppliers by improving its operating margins from around 11 percent last year to almost 17.5 percent during the second quarter ended June this year.
"Patni has accomplished these goals through a combination of cost-cutting initiatives, including headcount reductions, travel controls, onsite/offshore adjustments, and utilization efficiencies. More surprisingly, the company has managed to grow again, with revenues increasing 3.5 percent quarter-over-quarter (QOQ)" said Friedman.
Multiple sources familiar with Patni's acquisition plans said that the company wants to cross the $1-billion mark in revenues through inorganic growth, and compete more effectively with TCS, Infosys and Wipro for large multi-year outsourcing contracts. An anonymous source said that Patni was chasing an enterprise resource planning (ERP) services firm in continental Europe with around $400 million in revenues, while the U.S. target with expertise in insurance solutions area is closer to $150 million in revenues. Banking and financial services industry (BFSI), which includes serving customers such as Guardian Life Insurance, is one of the fastest growing businesses for Patni.
In a telephonic interview to the Economic Times, Patni CEO Jeya Kumar said that the company was indeed pursuing acquisition opportunities for accessing newer markets and scaling up existing domain capabilities. "We would either acquire a company for its pure IP within a particular domain, or for gaining access to a growing market."
According to U.S. based financial analyst, Patni should have around $400 million in cash by the end of 2009. Kumar, who joined Patni in February earlier this year, has been working on transforming Patni's internal processes. Experts such as James Friedman of Susquehanna International Group (SIG) said that the company has already moved in sync with tier-I suppliers by improving its operating margins from around 11 percent last year to almost 17.5 percent during the second quarter ended June this year.
"Patni has accomplished these goals through a combination of cost-cutting initiatives, including headcount reductions, travel controls, onsite/offshore adjustments, and utilization efficiencies. More surprisingly, the company has managed to grow again, with revenues increasing 3.5 percent quarter-over-quarter (QOQ)" said Friedman.
HP Warns on IT Budges
Those expecting a return to pre-recessionary ordering patterns from data centre customers might have to wait slightly longer than they were expecting.
A warning was sounded by Iain Stephen, vice president of enterprise server and StorageWorks (ESS) UK and Ireland at Hewlett-Packard, as the vendor updated its blade and networking portfolio.
“I haven’t met a CIO or IT director that thinks their budget is going up in 2010,” he added “It is looking as if it is going to be as tough [as this year in terms of getting budget].”
As a result he said users would continue to look for cost savings by reducing running and maintenance costs.
But Stephen warned that delaying investment was not a decision customers could necessarily keep making as the existing infrastructure was aging and unable to cope with the increased demands.
“Most infrastructures were designed a long time ago, from two to ten years,” he said.
A warning was sounded by Iain Stephen, vice president of enterprise server and StorageWorks (ESS) UK and Ireland at Hewlett-Packard, as the vendor updated its blade and networking portfolio.
“I haven’t met a CIO or IT director that thinks their budget is going up in 2010,” he added “It is looking as if it is going to be as tough [as this year in terms of getting budget].”
As a result he said users would continue to look for cost savings by reducing running and maintenance costs.
But Stephen warned that delaying investment was not a decision customers could necessarily keep making as the existing infrastructure was aging and unable to cope with the increased demands.
“Most infrastructures were designed a long time ago, from two to ten years,” he said.
Subscribe to:
Posts (Atom)
