CueBlocks Blog » Business Expansion

Biggest overseas acquisition by an Indian IT company

Rahul Kumar — Wed, 26 Apr 2006 10:37:34 +0000

Bangalore based mid-sized IT company, Subex systems, has acquired UK based telecom products company Azure solutions for $ 140m (Rs 630 crore) in a cash-cum-stock deal. The acquisition is the largest overseas acquisitions by an Indian company.

Armani will soon set stores in India

Rahul Kumar — Fri, 21 Apr 2006 09:23:27 +0000

The international luxury brand, Armani, has recognized that the time is ripe to set shops in Indian market. It will set up stores in India in metro cities such Delhi and Mumbai by 2007. It will be interesting to see the nature of its entry. Wether it will tie up with a partner or enter directly to sell its products will largely depend on the segment of populations it wants to target.

Armani’s decision to set stores in India comes after closely studying the Indian market place for a long time and registering a sales growth in asian economies such as China.

Boeing spreads its wings in India

Rahul Kumar — Fri, 21 Apr 2006 08:33:18 +0000

India Inc. is attracting some big investments in manufacturing sector. After Finnish mobile sets manufacturer Nokia and German automobile manufacturer Volkswagen decided to set up their R&D and manufacturing hubs in India, Its now the turn of the American Giant Boeing to spread its wings in India. The American airline manufacturer will set up its $100-m hub in Nagpur, Maharastra. Boeing’s set up in India will be a maintenance repair overhaul (MRO) hub .

Tata Consultancy Services to expand its operations in Europe

Rahul Kumar — Thu, 20 Apr 2006 14:47:26 +0000

Tata consultancy Services, India’s largest software exporter is on a global expansion spree. The company having registered a robust 50% growth in its revenues from European region will expand its presence in eastern european economies such Hungary, Romania etc. These countries offer TCS with low cost talented human resources and helps TCS to deliver to its european clients more effectively.

A detail report can be read here

Kohlberg Kravis Roberts & Co. to buy Flextronics Software Systems

Rahul Kumar — Mon, 17 Apr 2006 09:03:18 +0000

Kohlberg Kravis Roberts & Co., a U.S. based private equity firm has agreed to buy the Indian software development unit of Flextronics International Ltd. The acquisition will be the largest leveraged buyout and technology investment in India to date, according to data providers Venture Intelligence India. The acquisition priced at around US$900 million will be Kohlberg Kravis Roberts & Co.’s first purchase in India. Read more

RedHat acquires JBoss

Avneet — Tue, 11 Apr 2006 20:45:22 +0000

$350 million exchanges hands and a whole new open-source stack of software sees light.

Excellent payout for an excellent purpose. While JBoss would still work independently, RedHat will now open up open source to newer areas of IT.

Here’s to a good Java server application and the growing world of open source!

Cost of offshore operations – It is not just about salaries

Rahul Kumar — Fri, 07 Apr 2006 12:06:05 +0000

The costs involved in offshore operations is not just about the salaries. There are several other costs that should be taken into consideration before deciding onto the budget of setting the offshore operation. Some of these include:

* Acquiring a legal identity in the new country i.e. legalization (or incorporation).

* Acquiring office space with all the necessary logistics for operations.

* Acquiring business partners/associates for outsourcing some of the operations such as HR sourcing, auditing, taxation, legalization etc.

* Acquiring corporate housing.

* Other compensations for the employees.

SAP acquires Virsa Systems – Comes to Chandigarh

Rahul Kumar — Thu, 06 Apr 2006 09:49:26 +0000

Big news – German software giant SAP has acquired enterprise risk management software provider Virsa Systems to boost its software compliance skills and strengthen ties with Microsoft. Virsa systems, the privately held US based company had recently bagged office space in the Rajiv Gandhi Chandigarh Technology Park.
The acquistion means that Chandigarh, a city rated as one of the top emerging IT destinations in India, will be home to SAP’s fourth research and development center in India. SAP has offices in New Delhi, Mumbai and Bangalore in India.

After Opera Software, SAP will be the second Europe based multinational company to open its operations in Chandigarh.

A detail coverage about the acquisition is given here

Productivity of offshore operations

Rahul Kumar — Wed, 05 Apr 2006 12:37:32 +0000

The output per man hour invested by the employees of off shore center should be closely monitored by a review program. It is observed that besides challenging work and a remuneration according to the industry trends, there are several other factors that go a long way in determining the motivation of the employees.

Building a cultural of excellence where employees stand undeterred towards achieving results with innovation and pride is indispensable for achieving high productivity. The company should have a well thought of program to develop this right from the word go. The difference in the work culture and ethics should be carefully thought while designing such as program.

High employee attrition rate–A challenge in the subsidiary operation

Rahul Kumar — Fri, 24 Mar 2006 11:39:53 +0000

The employee attrition rate in India’s IT industry is signficantly high. Even the off-shore subsidiary operations of foreign players are facing the crisis of retaining employees. It produces a great threat to the productivity of the off-shore operations. This happens because there is a considerable amount of both time and capital spent on training the employees of the subisidiary.

Companies usually turn to increasing the compensation for employees to retain them. This however is no longer helpful in solving the problem as the skilled work force has career opportunities which alot of them give preference to.

Employee attrition rate can be never be totally eradicated. It can only be decreased. The business model on which a subsidiary operation runs is significant is achieving this. Outsourcing more high end responsibilities that offers challenging tasks to the employees goes a long way in helping.

Subsidiary operations- the next move in business expansion

Rahul Kumar — Fri, 17 Mar 2006 10:11:41 +0000

There seems to be a growing concern about loss of business knowledge amongst companies involved in downsizing their employee counts.
The following report appeared in Silicon.com

Allie Young, research VP at Gartner, said in a statement: “Companies have a growing concern about losing control of their intellectual capital and the business knowledge of key employees whose jobs or roles may be threatened by outsourcing, particularly when downsizing occurs.”

An alternate option with these companies is to open their subsidiary operation in the new economy. Cost cutting and retaining control over intellectual capital of the company by recruiting local talent are pre-dominant amongst the several advantages offered by subsidiary operations. After MNC’s, it might now be several medium size IT entreprises in US and Europe who would be rallying to open their offshore operations in low cost destinations such as India.