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Indian IT cos. giving headaches to large US system integrators
In an interview to BusinessWeek, Chell Smith, Global Managing Director of Cap Gemini Ernst & Young's Technology Services group, talks about how the weak US economy and "upstart Indian firms" have transformed the IT consulting business in the US.

Here are some extracts-relating to Indian companies:

The pure-play firms from India (are) coming on and offering services like systems integration at much different price points than had traditionally been there. In some segments of the market there has been 40% price reduction -- or more -- over the last three years because of that.

There's no question some organizations like Wipro, for example, are building up on-shore capabilities. They've acquired some local firms, they're moving upstream. As they start to do that, their costs go up. Their onshore people cost the same as ours.

I wouldn't say "oh doom and gloom, life as we know it is over…
The booming market for outsourced Clinical Trials
Several companies are tapping into the market for "clinical trials" or testing of new drugs in India.

Recent articles in Far Eastern Economic Review (free registration required) and Business Today (paid subscription required) describe this billion dollar opportunity and the players involved.

What's Dr.Bala Manian up to in India?
Despite his sterling track record as a serial entrepreneur in the US, Dr.Bala Manian, has maintained a very low profile in the media. This is in sharp contrast to Indian IT entrepreneurs in the US--several of whom we got to see on the covers of business magazines, but whose their start-ups promptly bit the dust once the bubble had burst.

Maybe, the fact that Dr.Manian's areas of interests lay outside the glamorous IT industry, helped him stay out of the media spotlight. But, not any longer. A detailed profile in the latest issue of Business Today reveals his plans for India.

Here is a quick profile of the man's career:

He has founded of a long list of biotechnology and instrumentation companies including Biometric Imaging Inc, Surromed, QDOT, Entigen, Biometric imaging, Lumisys, Molecular Dynamics, and Digital Optics Corp--several of them have proved highly successful.

Biometric Imaging Inc, where he was Founder & Chairman, was a…
Nanotech start-ups bullish as Bush signs off on $3.7-B federal grant
US President George Bush signed off on the $3.7 billion National Nanotechnology Initiative (NNI) bill which provides for four years of federally funded nanotech R&D. "The plan is for the R&D to eventually trickle out of the laboratory and into the hands of entrepreneurs and investors, who will then find ways to commercialize nanotechnology that can detect and treat disease, monitor the environment and produce and store energy," reports Private Equity Week. "As a result, the number of federally funded projects is expected to skyrocket, and universities, research institutes and startups all stand to benefit. The bill is expected to foster cooperation between academics and entrepreneurs, so that research developed by one group can be productized and marketed by another," the report adds.

About 21 nanotech companies are estimated to have raised about $207.6 million in private equity investment …
Productivity is the real "villain" for job losses; not outsourcing
China lost 16 million manufacturing jobs, a decline of 15 percent, between 1995 and 2002, says The International Herald Tribune quoting a recent study by Alliance Capital Management. In that same time, U.S. factory employment shrank by 2 million, or 11 percent. That is, China--the so-called factory of the world--lost manufacturing jobs at a faster rate than the US!!

So where are these jobs going? "That place is called Silicon Valley, where engineers are producing machines that work cheaply and make businesses the world over run more efficiently," says Kevin Laws, Entrepreneur In Residence at Venture Capital firm Pacific Rim Partners, in his VentureBlog article. "Running more efficiently means you can produce more things with less capital --and less people," he adds.

Here is how the IHT article concludes:

As hard as expendability is on the workers themselves, increased productivity is the …
Private Equity Week features heated debate on offshore outsourcing
Though it isn't clear why the social implications of offshore outsourcing is a fit concern for a magazine focussed on Private Equity, PE Week's Editor-At-Large Dan Primack has triggered off an interesting debate with his column on the topic.

According to Primack, US-based businesses should examine every possible avenue of hiring locally before going overseas. "It should be one of the most difficult decisions of your professional career. If it isn't, then it's generally safe to say that you are a fairly self-centered and callous person," he says in his column. "For those companies who do wind up with operations in Beijing or Mumbai, it is your responsibility to retrain the workers you are leaving behind and/or to help them find new jobs," he adds.

The column has received feedback from several PE Week readers. Some extracts from the feedback that I found interesting:

The Sentimental

It …
Kumar Mahadeva's exit from Cognizant and heavy stock sales raises eyebrows
The retirement announcement of Cognizant Technology SolutionsĂ‚’ Chairman & CEO Kumar Mahadeva has caught stock market analysts and industry players (including Cognizant employees) by surprise, according to reports in Business Standard and Economic Times

"The Indian software services industry is intrigued if not downright puzzled by the abrupt exit of Cognizant's founder, chairman and CEO, Kumar Mahadeva," the ET report said. According to the ET report, Mahadeva had sold around $57.6 million worth of stock options and individual holdings from March 2000 till December 3, 2003.

"Analysis of how the New Jersey-based Mahadeva has been consistently selling his stock in the market would reveal that it is a carefully managed exit. In the last six months, Mahadeva sold a whopping $25 million of his stock, filings with US Securities and Exchange Commission show," the BS report said. "…
It's not always cheaper to build start-ups in India
With people like Sequoia Capital partner Michael Moritz saying things like "We can barely imagine investing in a company without at least asking what their plans are for India", it certainly seems like the "build in India" mantra has become mainstream in Silicon Valley.

"Startups funded today should be built entirely abroad-from product design to product development to quality control to (in some cases) even sales and marketing. For every employee you have in the United States, you can have five in India," Ravi Chiruvolu, general partner of Charter Venture Capital, had said in hisVenture Capital Journal column in March. "It's such an important a strategy that if a company presents a business plan saying it needs 40 employees-all in the US-to help develop and bring its product to market, we'll pass in favor of a company that can do the same thing with just five employees here and the other…
The winners and losers in offshore outsourcing
Some interesting extracts from New York Times' coverage of a roundtable discussion on the topic of job migration:

Stephen S. Roach (managing director and chief economist of Morgan Stanley):

Over the September to November period, employment has turned up, but many of those jobs came from the temporary hiring industry. These are service jobs, contingent workers without benefits and significantly lower pay scales. We're getting the G.D.P. growth, and by now any recovery in the past would be flashing green on the hiring front. This one isn't.... This is a profoundly different relationship between hiring and the business cycle. And I think these jobs are, by in large, lost forever....

...This is classic election-year posturing by a Congress that is basically responsible for the problem itself and doesn't want to admit it. We have trade deficits with China and Japan because Washington is running the most reckless fiscal policy …
US programmers now willing to work at Indian-level salaries, says BW column
According to a column in BusinessWeek, when Jon Carson, founder of cMarket, recently felt an urgent need for four programmers, he asked his IT director to call an offshore software service intermediary. The intermediary came back with the number for the services from India: $40,000 per programmer--compared to the $85,000-90,000 a year required to hire experienced American programmers.

But since Carson was "personally very uncomfortable" in sending the jobs overseas, he decided to offer the jobs to Americans--at the same rate he would be paying for Indian programmers. He placed some ads in The Boston Globe, offering full-time contract programming work for $45,000 annually. (He had decided that it was worth adding a $5,000 premium to what he'd pay the Indian workers in exchange for having the programmers on site.)

The result? About 90 resumes "flooded in", many from highly qualified progra…
Equity research outsourcing picks up steam
US brokerage firms are sending more and more of their equity research work to India says a recent report in Businessworld. The work being done out of India is not just increasing in terms of volume, but also in value. Quoting data from BPO firm Evalueserve, the report says that 34% of the 77,000 professionals currently involved in equity research activities worldwide, carry out "library functions"--i.e., data and information collection work. Some 25% of these functions would be done out of low-cost offshore locations by 2005. By that time, 10% of the jobs in the next higher rung--those of junior analysts--would also be offshored.

Among the captive units, JP Morgan and Morgan Stanley have hired over 1,000 people each over the last year to staff their Indian centers. Other captive operations listed in the article include those of Citigroup (in Mumbai), Lehman Brothers, and HSBC. The report lists Evalueserve (in Gurgaon), OfficeTiger …
US CEOs can't afford to ignore India: Businessweek
In its cover story titled "The Rise Of India", Businessweek magazine says, whether Americans regard the outsourcing of services jobs to India as disruptive or beneficial, one thing is clear: Corporate America no longer feels it can afford to ignore India.

Some extracts:

"If India can turn into a fast-growth economy, it will be the first developing nation that used its brainpower, not natural resources or the raw muscle of factory labor, as the catalyst. And this huge country desperately needs China-style growth. For all its R&D labs, India remains visibly Third World."

" Still, this deep source of low-cost, high-IQ, English-speaking brainpower may soon have a more far-reaching impact on the U.S. than China. Manufacturing -- China's strength -- accounts for just 14% of U.S. output and 11% of jobs. India's forte is services -- which make up 60% of the U.S. economy and employ two-thirds of its wor…
Nishan Systems founder sues VCs, others over McDATA acquisition
Nishan Systems founder and board member Aamer Latif has filed a suit against the company's Venture Capital (VC) investors and others in the California Superior Court, Santa Clara County. ComVentures (and its General partner Roland Van der Meer); Lightspeed Venture Partners (and its general partner Gill Cogan); Robert Russo (CEO of Nishan); John McGraw (Chairman of Nishan's board); McDATA Corporation; and investment banking firm Credit Suisse First Boston; have been named among the defendants in the suit.

The suit alleges that the defendants engaged in fraudulent vote-buying to garner common shareholder votes needed to approve McDATA's acquisition of privately held Nishan Systems. Among other claims, the suit alleges that the venture capital firms stacked the Nishan board so as to promote their own financial interests at the expense of Latif and other common shareholders.

The lawsuit stems from the recent $90 …
Social software scene heats up
Silicon Valley-based "social software" services like dating service Friendster, Tribe.net and LinkedIn have raised several million dollars in venture capital from top-drawer VCs like Kleiner Perkins and Benchmark Capital (Friendster), Mayfield (Tribe.net), and Sequoia Capital (LinkedIn).

Click Here to read Fortune columnist David Kirkpatrick's article that provides a backgrounder on such services.

Now that dollops of VC money is involved, these "networking" companies seem to becoming less fond of each other and are feuding over business models and even patents on such software.

Click Here to read LinkedIn's press release (on its $4.7 million funding) in which it takes liberal digs at its rivals. "Unlike networking services geared to singles and salespeople, LinkedIn has been able to attract a user base of successful professionals and executives by providing the most powerful and effective set of privacy and email inbox p…

Why are NRI techies returning home in droves?

Earlier, we used to encounter names like "Sean (Suresh) Narayanan" only in US magazines. Now, we come across such names in the Indian business media as well. Reason? The Non-Resident India (NRI) techies are heading back home. And how!

Both Businessworld and Business Today explored this phenomenon--in rather longish articles--recently.

"Take a walk around the India Development Centres (IDCs) of multinationals and you will run into H1-B workers, Green Card holders and Indian-born US citizens," says the Businessworld Cover Story. It places the number of returnees at 40,000 (since Sept. 11, 2001) qouting McKinsey and Nasscom estimates." Almost all companies that BW spoke to said their US-returned staff (ie, folks who had been in the US for three years or more) has increased from less than 5% of the total workforce about four years back to over 12% today.

Click Here to read the full Businessworld article.

Click Here to read the Business Today article. (Subscrip…
"Having back-end in India can salvage ASP business model": Kanwal Rekhi & Co.
The Opportunity: The Application Services Provider (ASP) business model--which involves delivering software over the web on a rental model--is a great way to tap the 7 million strong small business market in US which can not afford enterprise software that come with a high-ticket price.

The Problem: As several ASPs have discovered over the last 2-3 years, the high cost of developing software in the US nullifies the "small price X large volumes" rental revenue model.

The Answer: Do the software development, maintenance and support out of India.

At least, that's what several Indian entrepreneurs heading US-based ASP firms--including veteran Silicon Valley entrepreneur Kanwal Rekhi (now the CEO of web-hosting software company Ensim Corp.), Munjal Shah (CEO of online auction tools company Andale), and Ram Varadarajan (CEO of sales automation software firm Arcot Systems)--believe, a…
Why captive BPOs are feeling the heat
There have been a string of announcements from captive BPOs--including the pioneer, GE Capital--that they will start pitching for business from companies outside of their parent. Obviously, these companies have to make very fundamental changes--including setting up marketing teams, re-align their cost structures, etc.--to cater to external clients. So, what is making them take this step?

Businessworld magazine recently carried an interesting article titled "Crunch Time For Captives" answering this question.

"In the last couple of years most of the captive units have begun to hit saturation point. That's when their parent organisations in the US, like GE, took the decision to derisk the India business by setting up alternative bases in Mexico, China, Hungary and the Philippines....By then, most of them had hired people in anticipation of more work moving to India. So when the events of 9/11 took place and concepts like disaster pl…
Over 40% of software development is outsourced : META Group
An average of 41% of new IT development activity is now outsourced, according to IT research firm META Group. Last year, the average percentage of new development from outsourcing providers was 35.9% worldwide.

Though they haven't been as dramatic (or gotten as much ink) as Forrester Research's "3.3-m US jobs to be lost due to offshoring" report, META Group pronouncements too seems to have an anti-India slant. The latest press release for example, talks about India getting a lion's share of the offshore pie despite "(its) political instabilities", "the highest (IT Staff) turnover rate", etc.

"India continues to be the preferred offshore country, with more than 500,000 knowledge workers, but other countries are competing -- Russia, the Philippines, Ireland, Israel, and China are the up-and-comers to watch," the release adds. Sure.

And then there is the expected words of sympa…
US politicians will not legislate against offshoring to India: FEER report
The Far Eastern Economic Review has (rather belatedly) discovered that there is a backlash among US IT workers to jobs getting offshored to India. It provides the usual job loss statistics and quotes all the "usual suspects"--from a representative of the US-based Washington Alliance of Technology Workers and Kiran Karnik of India's Nasscom--in its report on the topic.

The only new aspect in the report comes towards the end and pertains to whether and how the US elections of November 2004 would influence legislation on offshore outsourcing. "It's anyone's guess as to which way the political roulette wheel will spin. We will definitely see more posturing, but the question is: Will we see regulatory action?" Vivek Paul, vice-chairman of Wipro says in the report.

Quoting analysts, the FEER report concludes that India will NOT face strident criticism--and action--even if politicians …
Opponents of offshoring proffer new arguments
With the fear-mongering over job losses managing to just get the attention of a few local politicians and state governments, the anti-outsourcing lobby in the US is now coming up with other arguments against outsourcing. Arguments that they hope will cause some "FUD" (fear, uncertainity and doubt) in the minds of US corporate executives.

Some of these new argument have appeared in the form of articles in Businessweek (which claims the poor quality of software developed offshore actually makes it costly) and the San Francisco Chronicle (which worry over the threats to data privacy due to offshore outsourcing).

Click Here to read the Businessweek article titled "The Hidden Costs of IT Outsourcing"

Click Here to read the SF Chronicle article titled "A tough lesson on medical privacy"

Click Here to read the SF Chronicle article titled "BofA to send tech work, data to India"

Sanjiv Sidhu on i2's partnership with TCS
In an interview to Businessworld magazine, the Chairman & CEO of i2 Technologies, waxes eloquent about his company's partnership with Indian software services firm, TCS. (The duo have created a solutions center in India for leading Australian food retailer, Woolworths.)

"Earlier, companies used to build their own software. Then they shifted completely to packaged application software. Now people want more flexibility in application software. So the TCS-i2 combination is telling people that why not have the best of both worlds - packaged, world-class IP and custom-built application software," Sidhu says. "Our contribution to this solution is in terms of our order management, event management, demand planning, replenishment and transportation software IP. This solution has to be integrated with Woolworths' existing ware-house software and in creation of new data categories. TCS-i2 does all that".

So, is this …
Red Herring's December event to feature Offshore Outsourcing
"Outsourcing in India and elsewhere" features prominently among the topics listed for the Red Herring Fall conference, an invitation-only event to be organized by the newly relaunched technology and entrepreneurship publication Red Herring.

Other topics to be covered include restructuring of the venture capital industry, 3G and other wireless technologies, China, and the digital home.

Sachio Semmoto of eAccess, Guy Gecht of EFI, Lawrence Calcano of Goldman Sachs, Guerrino De Luca of Logitech, Craig Conway of PeopleSoft, Thomas Weisel of Thomas Weisel Partners, Stratton Sclavos of VeriSign, and Gary Bloom of Veritas are listed among the speakers at the conference.

Event Details

Location: Monterey, California, USA
Venue: Monterey Plaza Hotel
Date: December 8-10, 2003

Click Here for more information about the event.

SEBI's Venture Capital advisory committee submits report
The Advisory Committee on Venture Capital has submitted its report to India's capital market regulator, SEBI. The committee, under the Chairmanship of Dr. Ashok Lahiri, Chief Economic Advisor, Ministry of Finance, was set up to advise SEBI in matters relating to the development and regulation of the VC industry in the country. The report has been placed on the SEBI website for public comments.

Some of the key recommendations of the report include:

* Removal of the requirement of lock-in of shares post the listing of their investee companies. (At present, the VC funds are subjected to a lock-in for a period of one year after listing.)

* Allowing venture capital funds to invest upto a third of their corpus in listed companies (against 25% of their corpus allowed currently) . The report has however said VC funds will not be given any special exemption from the clauses governing the takeover code.

* Introduction of hybrid ins…
Manish Sabharwal's interview to Knowledge@Wharton
In a fascinating interview to Knowledge@Wharton, Manish Sabharwal, Founder & Managing Director of pioneering HR BPO firm, India Life Hewitt, provides both solid and witty insights into a range of industry issues: how he started out, why he sold out, why he focused on India as a market, etc.

Some extracts:

Business schools as venture incubators
I think VCs who started incubators got it wrong; business schools like Wharton are the best incubators in the world. I milked the school's ecosystem. India Life was my final project in six classes. Many professors helped me think things through, and I had a group of first-year students do a field application project. I used the summer between the two years to travel to India and refine the plan, and then moved back to India straight after school.

I guess it would make a better story if I said all my professors gave me bad grades for my business plan. But they didnĂ‚’t; they thought it wo…
Products and services businesses require completely different DNA: Infosys sales chief
"(When) someone asks me why my company (Infosys Technologies) isn't being more aggressive with products, I will just put it down to misplaced national pride. They want India to be known for great software products. It should. But India is already well known for its services companies. And that's something to be proud of," says Basab Pradhan, Infy's Senior Vice President and Head - Worldwide Sales & Retail (North America), in a column for Rediff.com.

Some extracts:

* The products and services businesses are so different, that the odds against a company with a dual strategy are fairly high.

* Indian IT services companies Infosys and Cognizant both show far better margins and growth compared to leading software product companies Siebel and PeopleSoft. (Pradhan substantiates this statement with a table containing actual figures.)

* It is true that in the last two years, rates in…
"Venture Capital is not available for start-ups"
"Today, there are no true start-up VCs. Investments are happening in companies which have made cash profits and are looking for funds for the second phase of growth." says venture capitalist Vishal Nevatia of GW Capital in an interview to Economic Times.

GW Capital is focussed on mid-sized companies in the media & entertainment, retailing, and BPO sectors. Around 60% of the fund's Rs.150 crore corpus has been invested in these sectors, Nevatia said.

Click Here to read the full interview.


Selecting an offshore software development partner

The McKinsey Quarterly recently published a primer on offshore software development with an aim to help US companies identify which projects they should outsource to an offshore vendor and to whom.

Some extracts:

* Only companies with fairly large IT staffs—more than 50 in-house employees focusing on software development or maintenance—should consider offshore software partnerships, since much time and substantial resources are required to negotiate them and to oversee the work and the integration of development teams. Furthermore, a company that outsources software development shouldn't have a taste for "bleeding-edge" technology, which ought to be created in-house since it requires a high number of design-code test-redesign feedback loops.

* Offshore outsourcing is a particularly important option for maintaining legacy systems—often a large and onerous part of an IT organization's workload and one that is getting ha…
What's slowing India's economic growth?
A recent study by global consulting firm McKinsey found three main barriers to faster growth in India: the multiplicity of regulations governing product markets, distortions in the market for land, and widespread government ownership of businesses.

"We calculate that these three barriers together inhibit GDP growth by more than 4 percent a year. Removing them would free India’s economy to grow as fast as China’s, at 10 percent a year. Some 75 million new jobs would be created outside agriculture--enough not only to absorb the rapidly growing workforce but also to reabsorb the majority of workers displaced by productivity improvements," the report says.

Click Here for more information about this report. (Free registration required).

TiE to organize India tour in February for Silicon Valley professionals
"At TiE (The Indus Entrepreneurs), one of the things we do is help the movers and shakers in the valley -- the lawyers, venture capitalists, accountants -- build relationships with their counterparts in India. We're conducting a tour in February to help build their Roledexes in India," Raj Jaswa, a senior member of TiE (and founder of Selectica Inc.) said in an interview to Silicon Valley Biz Ink.

"People do business with people they are comfortable with, feel an attachment to. The movers and shakers here need to have the ability to figure out a cost to a company to go into Hyderabad, for example. Or they need to know what to do in order to recruit managers and engineers. They will now have contacts they feel comfortable with," Jaswa added.

Click Here to read the full interview.

Click Here to visit the TiE web site.



New research counters anti-outsourcing lobby
At last, there is some research to counter the huge negative press generated by the "3.3 million US jobs to be lost due to offshoring" report put out by Forrestor Research.

The Indian software industry and BPO industry association, Nassom, in combination with BPO firm Evalueserve, has published a report--backed with numbers--that makes the case that outsourcing (including offshoring) benefits the US economy in the long-term.

Here are some extracts:

Outsourcing is being understood today as a win-win partnership between Indian and US companies. Both are expected to benefit, with the gains spilling over to the overall economies and domestic markets of the two nations. The Evalueserve-NASSCOM research projects the following benefits for the US economy as a result of outsourcing:

* The US economy can expect net savings of billions of dollars due to offshoring over the period 2002-2010. This is over and above the positive impact on t…
The Economist profiles travel BPO firm Tecnovate and its UK parent ebookers
New Delhi-based Tecnovate, the Indian BPO subsidiary of UK-based leisure travel firm, ebookers plc, recently raised $10 million at a valuation of $160 million. The company which has so far catered to the needs of ebookers' European subsidiaries, now plans to use the new funds in expanding its services to third-party clients.

In a recent profile in The Economist, ebookers Founder & CEO, Dinesh Dhamija, explains why Technovate is very important to ebookers' competitiveness. According to Dhamija, Technovate saved his company £1.5m in the quarter ending June 30. “If there is a market share battle, then it will be the company that keeps costs lowest that will be the last standing,” Dhamija says in the article.

An interesting extract from The Economist article:

Delhi helps provide a round-the-clock service along with offices in Europe. But what about local knowledge or language skills? That was the fear…
Knowledge@Wharton's interviews with BPO experts

Ravi Aron, a Wharton business school professor, interviewed a range of experts to obtain different perspectives on the latest trends in the BPO industry. The interviews were published in the latest issue of Knowledge@Wharton. As a sample, I'm posting below some extracts that I found to be especially interesting.

Extracts from the interview with Rebecca S. Scholl, principal analyst at Gartner Research:

Aron: Is the decision to migrate or outsource a process seen as a strategic (as opposed to tactical or operational) decision? Who makes this decision within the firm? CEOs, CFOs or CTOs?

Scholl: Key decision-makers for domestic BPO are the CFOs and the CEOS (in large enterprises the CFO plays a larger role and in smaller enterprises the CEO plays a larger role). CIOs and CTOs are rarely involved in the initial decision to outsource and typically get involved during the provider selection process. Most offshore BPO is highly tactica…
Why searching for The Next Big Thing is a waste of time
What's going to be "The Next Big Thing" (or its variation the "next killer app")?

Reams and reams of newsprint, web pages, conferences, and even oh-so-precious TV air time, is devoted to this topic--especially now that the "Internet wave" has subsided a bit (or rather, become more "mainstream").

Tim Oren, a Silicon Valley veteran (currently Managing Director of VC firm, Pacifica Fund ), has made a great post at his web log explaining why looking out--or listening to the "punditocracy"--for the NBT is a waste of time. "The Next Big Thing is a narrative we lay on top of the events after they happen..... (it generally) sneaks up from behind while you're trying to do your work, kicks your ass, walks over you, and either rifles your pockets or drops gold into your hands," Oren says. "Anyone tells you different, you're talking to a liar." Oren goes on to…
Red Herring relaunches online as past and present heads take digs at each other

French entrepreneur Alex Vieux, who acquired the Red Herring brandname, has relaunched the technology and entrepreurship magazine in an online format. (The new owners of the Red Herring brand cannot bring out a print magazine until September 2004 as required by Time Warner--publishers of tech business magazine Business 2.0--which bought the old RH's subscriber list.) Vieux has hired former Business 2.0 editor James Daly to head the new RH editorial team.

In an interview to San Jose Mercury News, Vieux has attacked RH's founder and original editor-in-chief, Tony Perkins, calling the old version of the magazine "hype-ridden". According to the Mercury News profile, Vieux, who served as a US correspondent for the French newspaper Le Monde, launched business conference company Dasar in 1990. The conference business "put him in touch with the tech elite", the profile says, adding th…
Bio-tech investing: the risks and rewards

At a time when VC investments in bio-tech companies (both in the US and India) is on the uptick, a recent Knowledge@Wharton article covered a conference titled “Value Creation and Destruction in Emerging Technologies: Lessons for the Biosciences” provides some insights and background.

Click Here to read the article.

More Silicon Valley start-ups are pushing product development to India

It's not just the US software services companies like EDS, Keane, CSC, Accenture, Cap Gemini-E&Y (apart from "oldies" like IBM) that are making a beeline to set up operations in India. The product companies don't want to get left behind.

Just a glance at the job supplements of the top newspapers in Bangalore will confirm this. Last week's job supplement of Economic Times had a large ad from the Sunnyvale-based telecom equipment start-up Infinera (which has raised $130 million from top Silicon Valley VCs including Kleiner Perkins, Mobius VC, Accel Partners, Benchmark Capital, and Venrock Associates). In fact, Infinera has almost become a regular advertiser in this supplement.

In an article titled "India Inside" , in the latest issue of Business Today, the magazine's Assistant Editor Priya Srinivasan, has elaborated on this trend.

"Oh, it's an absolute fad out here; VCs…
Indian software product firms
The Economic Times carrired an article profiling a list of some software product firms.

Click Here to read the article titled "Product dynamos byte the big boys"



India's first biotech fund makes its maiden investments

The bio-technology focussed APIDC-VCL, a Rs 150-crore joint venture fund between the Andhra Pradesh Industrial Development Corporation (APIDC) and Dynam Ventureast, has made its first investments: in three Indo-US companies, reports BusinessWorld. The companies include Bioserve Biotechnologies, Genomik Design Pharmaceuticals, and Silico Insights.

Click Here to read the full report.

Information Systems changes to Infrastructure Realty

When a whole horde of former financial services companies appended "Software Services", "Information Systems" or just "Infosys" to their names, it marked the beginning of the end for the boom in IT services stocks.

Now, BSEL Information Systems Limited has informed the stock exchange that it has changed its name to 'BSEL Infrastructure Realty Ltd'.

Not sure what to make of this!

Private Equity survey by Businessworld

Engineering software specialist Geometric Software, airline and hospitality software maker Kale Consultants, and optical disk manufacturer Moser Baer, are among the few Indian companies in which their private equity backers have made over 10-fold returns, according to a recent Businessworld article on Private Equity investments in India (issue dated August 11, 2003). Click Here to view the full list of the top "multi-bagger" investments.

Citibank Private Equity (which invested in I-Flex, Polaris), Electra Partners (Moser Baer), ING Barings (Mphasis-BFL), Draper International (Rediff, Selectica, Prio) rank among funds which have made returns of more than 2.5 times their investments in India. Click Here to view the full list of the top performing funds.

Click Here to read tead the full Businessworld article.


Businessworld's BPO Status Report

Businessworld magazine did a comprehensive cover story on the BPO industry in its issue dated August 04, 2003.

The article covered, among other aspects, statistics on the industry's size, winners & losers, and the sectors which held the most promise.

Some extracts:

"As on 31 March 2003, the sector employed 171,000 professionals. It has $1 billion invested in it, creating about 100,000 smart cubicles in 7.5 million sq. ft of space. And it generated revenues of $2.3 billion in 2002-03."

"The Indian BPO story is replete with such successful examples--and also with abject failures. Around the time OfficeTiger was crafting its success in Chennai, another Chennai-based company, Brigade, was busy writing its own epitaph.
Brigade made a series of errors. Soon after it got its first $50-million infusion of capital from General Atlantic Partners, Brigade went on a mad spending spree. By 2001, it was burning cash at a rate six times tha…