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The $52 billion software industry — arguably India’s best known overseas — is now confronted with multiple challenges. The economic slowdown in the U.S., the single largest market for outsourced orders, has cast a shadow over near-term business prospects.
It’s being exacerbated by local issues such as an appreciating currency, rising fixed and operating costs, a growing shortage of skilled manpower and the prospect of a sharp tax increase. Under so-called sections 10A and 10B of Indian tax laws, software companies are currently granted a tax holiday on income generated out of units at designated software-technology parks — a concession that brings down the effective tax rates to 12% to 15%, compared with the peak effective corporate tax of 33%. That benefit is due to expire in March of next year.
Larger firms will be able to expand in special economic zones spread over 30 acres or more and take advantage of similar tax holidays at those facilities. But small- and mid-sized companies, who don’t have a need for and can’t afford such large facilities, will feel the pinch immediately because of the “uneven playing field.”
On the jobs market, the supply of Indian software professionals is also growing tighter because of the rapid expansion. In the financial year ended March 2005, Indian software and business-process outsourcing companies employed fewer than 1.05 million people directly. At the end of March 2008, the number likely grew to 2 million.
With millions of graduates being churned out every year, “the size of the talent pool isn’t the issue. Our issue is that the employability of that group of people coming out of those colleges.”
Wages, meanwhile, have been shooting up at the rate of about 15% a year in tandem with the demand for experienced software developers. A study of 30 emerging countries conducted by Gartner last year, which showed India was the “most lucrative destination as far as outsourcing was concerned” on a scale of ten parameters, including labor pool, English-speaking skills, cost structure, infrastructure and government policies. However, if wages continue to rise at a rate of 15% and the rupee-dollar exchange appreciates by 5% a year for a few more years, it’ll dent India’s competitive advantage
Japan faces a 16% slide in the size of its workforce by 2030 while the number of elderly will mushroom, the government estimates, raising worries about who will do the work in a country unused to, and unwilling to contemplate, large-scale immigration. The current fertility rate is 1.3 babies per woman, far below the level needed to maintain the population, while the government estimates that 40% of the population will be over 65 by 2055, raising concerns about who will look after the graying population.
Japan could save 2.1 trillion yen ($21 billion) of elderly insurance payments in 2025 by using robots that monitor the health of older people, so they don’t have to rely on human nursing care. Caregivers would save more than an hour a day if robots helped look after children, older people and did some housework, it added. Robotic duties could include reading books out loud or helping bathe the elderly. Mommy, I want Yuki 2.0 to wipe my @**.
Companies that traditionally rely on India for offshore IT services have been looking for that something beyond India for years, citing such reasons as high employee turnover and unreliable communications. But the search has taken on added urgency recently, especially for U.S. companies, as a weakening dollar has boosted the cost of IT services priced in India’s rupee. Over the past five years the dollar has declined about 16% against the rupee. High real estate costs and expectations for tax increases also have diminished India’s allure.
As outsourcing to India becomes more expensive, North American companies are more inclined to “nearsource,” keeping work in the Western Hemisphere, where they can operate in a closer time zone. In years past a company could save 40% to 50% by hiring Indian firms to handle IT and other services. Should the U.S. dollar continue its descent, that differential would shrink to 10% to 20%.
How much longer the world’s companies will have financial incentive to outsource to India is a matter of lively debate. India’s “advantage as an offshore location is fast eroding—its attractiveness takes a hit with each passing day,” analysts at Forrester Research wrote in a January, 2008, report. Forrester catalogued some of the well-known challenges, such as increasing staffing costs, turnover and strained infrastructure.
The benefit of doing business, from a labor-cost point of view, in such locales as Bangalore, India, will disappear for some companies in three to four years. Indeed, while costs are increasing in India, the country is generally less expensive than Latin America and most other locations, especially for companies that don’t require high-end software developers. The average annual salary for an IT worker in the U.S. is about $75,000. In India it’s about $7,779 and in Argentina, it’s slightly higher at $9,478. In Brazil, the annual wage jumps to $13,163, and in Mexico it climbs to $17,899.
Increasingly, companies want a provider that can nimbly shift tasks and labor among its own global network of work centers. The dollar’s decline aside, even Brazilian firms are benefiting as companies spread their outsourcing around. The real question, if you’re going to sign onto somebody for five to seven years, is do they have a vision for how they’re going to move work around the network.
Yahoo Inc. on Monday launched a site for women between ages 25 and 54, calling it a key demographic underserved by current Yahoo properties. The site, Shine, is aimed largely at giving the struggling Internet company additional opportunities to sell advertising targeted to the key decision-maker in many households.
With Shine, Yahoo plans to expand its offerings in parenting, sex and love, healthy living, food, career and money, entertainment, fashion, beauty, home life, and astrology.
Yahoo is entering a market already served by Glam Media Inc. and iVillage, a unit of General Electric Co.’s NBC Universal. It is Yahoo’s first site aimed at a single demographic, although other Yahoo sites like Finance and Sports already draw specific audiences.
So far, Crest Whitestrips looks like the largest (showing 2 advertisements on the home page).
If you’re reading this at work, you should probably be asking yourself: Am I actually allowed to browse online and read news stories at the office? The parameters for computer use at work (and even at home) are often confusing. We communicate, network, watch our TV shows, do our grocery shopping, and get our news on our computers. But it’s no free-for-all. Employees should know exactly what their employer’s policies are for e-mail and Internet usage, because workers are losing their jobs after computer-based missteps. Here are five ways to log on and lose your job:
1.) Blogging. While some blogging advocates say a well-executed blog can boost your career by presenting your best side to the HR executives Googling you, there are limitations.
2.) Playing. Solitaire, that ever seductive way to while away the hours, is probably not a great choice for the workplace. New York City MayorMichael Bloomberg caught sight of a solitaire game on a city employee’s computer screen in 2006 and fired him. “I expect all city workers, including myself, to work hard,” Bloomberg said then.
Richard Bayer, chief operating officer of the Five O’Clock Club, an outplacement and career coaching organization, says employees who use a company computer for personal matters on company time — whether playing solitaire or checking on their 401(k)’s — are essentially stealing from their employer. “It’s a new, 21st-century form of theft,” Bayer says.
3.) Look at Dirty Pics. Nearly one third of bosses have fired workers for misusing the Internet, according to a recent study by the American Management Association and the ePolicy Institute. 84% of those employers said the reason was the viewing, downloading, or uploading of inappropriate or offensive content. The computer system belongs to the company, and courts have consistently sided with employers when it comes to computer-related terminations. So look at that stuff on your own time.
4.) Posting Your Pictures. Social networking may quickly gain an air of formality. Employers are beginning to monitor social networking sites. Not only do companies fear employees posting proprietary information, but they also don’t want to find photos of the boss dancing on the table drunk at the holiday party. Opinions posted that run contrary to company values can also get employees into trouble.
5.)Write R-rated e-mails. More than a quarter of employers have sent an employee packing for e-mail-related offenses, according to the American Management Association/ePolicy Institute survey, and 62% of those said it was for inappropriate or offensive language. When you write, just assume that someone inside the company is reading it. Most of the 43% of companies that monitor e-mail do it automatically, but 40% have live human beings reading and reviewing it.
Employers largely are concerned with their legal liability noting that a growing number of companies are choosing to archive electronically stored information, rather than erase it, and it’s subject to discovery in a federal lawsuit.
Apple Inc. Chief Executive Steve Jobs took the wraps off a super-slim new laptop at Macworld Tuesday, unveiling a personal computer less than an inch thick that turns on the moment it’s opened. At its beefiest, the new computer is .76 inches thick; at its thinnest, it’s .16 inches, he said. It comes standard with an 80- gigabyte hard drive, with the option of a 64GB flash-based solid state drive as an upgrade.
The new laptop, which has a 13.3-inch screen and full-sized laptop keyboard, will cost $1,799 when it goes on sale in two weeks.
E-mail has become the new snail mail for many Chinese as they turn to the immediacy of text messages on cellphones and instant messages on personal computers. The most affluent and educated use e-mail, but by and large people here rely much more heavily on the shorter, faster and more conversational methods of electronic communication. China’s mania for messaging — particularly mobile messaging — is largely a product of how technology developed here. Like other emerging global markets, rural regions of China lacked phones or even a television as recently as two decades ago. The country modernized just as mobile technology was broadly accessible throughout the world. China is now the world’s largest mobile phone market.
China’s 455 million cellphone users chat, cajole, joke and flirt via short messages about 33 billion times a month, according to government statistics and IResearch Consulting Group, a market research firm that focuses on Chinese Internet and wireless industries. More people in China get news or weather via the Web on their cellphones than from personal computers. Most Chinese people can’t afford a PC for their home because it’s a pretty big investment. Mobile phones have achieved iconic status in China, where technology is viewed as an important part of the country’s rapid modernization.
Tesla Motors is a car company that’s both decades ahead of its time, and a year behind schedule. Soon, it will become clear which is more important to Tesla’s long-term future, and the future of the disruptive ideas the company represents. For those who somehow missed the blizzard of publicity that has swirled around this company for the past 18 months or so, Tesla (www.teslamotors.com) is a Silicon Valley start-up, bankrolled by some of the same people who brought you the Internet boom of the late 1990s. The company’s stated ambition is to develop over the next several years a full array of electric cars. Many influential leaders of Silicon Valley’s “clean tech” green-technology movement see Tesla as an icon of the broader effort to make big money by unshackling the U.S. economy from petroleum.
Tesla’s first model will be a $98,000 electric roadster, developed around the architecture of a Lotus Elise, that uses 6,831 lithium-ion batteries similar to those used in laptop computers, a patented electric-motor system, and a highly sophisticated package of controllers and software to deliver an exotically attractive car that zaps from standstill to 60 miles per hour in under four seconds and can travel up to 245 miles on a single charge. Tesla isn’t planning any traditional advertising, but if it did, one slogan could be: “You can’t kill an electric car you can’t catch.”
Tesla recently told potential customers that it can no longer guarantee delivery of 2008 models. Newcomers to the waiting list might well get 2009s. Tesla’s Big Idea was to start with an electric car that appeals to the id, not the superego. From the start, co-founder Martin Eberhard says he wanted a car that could outrun a Porsche in a 0-60 trial, and would go 250 miles on a charge. The production Roadster will hit the under four-second target for the 0-60 dash, and will get very close to the original goal on range.
Tesla so far has raised $105 million from venture-capital firms and Chairman Elon Musk, the PayPal founder who was a ground floor investor. That’s a lot for a tech startup, but it’s chump change in the auto industry, where car programs with century-old, conventional technology can easily cost $500 million to $1 billion.
How did they pick the name Tesla? Tesla is named for Nikola Tesla, the godfather of alternating current and radio who nonetheless died poor, in part because his weirdness wound up obscuring his genius. In recent years, Tesla has become a patron saint of Silicon Valley.
If, for whatever reason, you need to verify someone’s email address, try Verify-Email.org, a free email address verifier. Just enter in the email addy, click “verify,” and go. The format, domain, and user are all checked by actually connecting to the mail server to see if everything is copasetic.
Blabberize is a new service that allows you to create your own talking picture, basically a moving mouth on a still image. Users upload a photo of someone to Blabberize, select a mouth and then record a message. Once done, users can email a link to the Blabberize hosted page or embed the result. Their site is so busy from traffic that you might as well wait till it dies down a bit.
Verizon Wireless has announced a series of four new phones which will serve as the anchor products for the company’s 2007 end-of-year holiday buying season: the Samsung Juke, the LG Venus, the BlackBerry Pearl 8130, and the LG Voyager—the latter of which the company hopes will compete favorably with Apple’s iPhone. Of course, the phones all tie in to Verizon’s V Cast mobile music, video, and media offerings, although the company has yet to reveal pricing and availability information for the new handsets, although prices should range from $100 to $400 with contracts.
Chinese engineers are younger, less-educated, unhappier in their current jobs and more likely to join a startup than their American counterparts according to survey released today comparing the hopes and dreams of engineers on either side of the Pacific. The report, titled “The State of Engineering in China,” is modeled on four similar surveys of the attitudes and ambitions of American engineers that were commissioned between 1998 and 2005.
A comparison of the surveys reveals some significant differences between U.S. and Chinese engineers, along with some similarities.With regard to job satisfaction and career ambition, a comparison of survey results reveals some paradoxical twists. For instance, it is an article of faith in Silicon Valley that great teams are the secret to success, and in this regard Chinese engineers seem to lag. They’re less likely to work in teams than their U.S. counterparts (57% and 76%) and when asked to evaluate various on-the-job risks, they were far more likely to consider it problematic to rely on a colleague (26% in China and 8% in the United States).
Kerry McClenahan, a principal of the communications firm behind the surveys, said this lessened sense of job satisfaction, combined with the relative youth of the Chinese engineers, helped explain another of the findings - their self-professed greater willingness to jump to startups relative to their American counterparts. By and large, Chinese engineers expressed less job satisfaction. They reported better job security than their American counterparts, but had far less say about their working conditions and were less likely to be “proud” to be working for their employer. Despite many differences, the survey turned up similarities, starting with the fact that precisely 94% of the respondents in both the Chinese and U.S. surveys were men.
Solar-powered homes are starting to outsell traditionally electrified new homes in several markets, and developers are stepping up their use of the technology. The growing popularity of household solar power is an encouraging sign for the thousands of solar enthusiasts and vendors gathering in Long Beach this week.
“The increase in sales velocity is actually paying for the solar systems,” says Julie Blumden, a vice president of a San Jose-based manufacturer of solar roof tiles. “The last time we saw interest in solar that was anything close to this was back in the 1980s, the first time there were federal tax credits for solar energy,” said Julia Judd Hamm, executive director of the Solar Electric Power Assn. “But the numbers then aren’t even comparable to what we’re seeing now.” Solar power is hotter than ever, helped by California’s ambitious Million Solar Roofs rebate program, federal tax credits and growing public and political support for renewable power of all kinds.
For starters, it combines a memory flash drive with the wireless receiver for the wireless mouse. The mouse stores a gigabyte of flash memory on a dongle that plugs into a universal serial bus (USB) port. Since many laptops have too few USB ports, the mouse-memory combo frees up one of the valuable ports for other devices. The 2.4-ghz wireless receiver has a 30-foot range. The mouse can also connect wirelessly to the laptop using a Bluetooth radio.
Having conquered cyberspace, Google co-founders Larry Page and Sergey Brin have set their sights on the moon. They have arranged for their Mountain View company to fund the Lunar X Prize, a competition that will award $20 million to the first team that lands a private unmanned spacecraft on the moon - and broadcasts high-definition video back to earth. In a video statement prepared for Thursday’s announcement, Brin said he had been interested in space exploration as a kid and began following it more recently as his peers - technology geeks who had grown rich off the Internet - turned their attention to space.
With space travel in the not-so-far future, this places space education as a high priority. The team at the Lunar X Prize has prepared free learning guides, videos and other resources to help stimulate student interest not only in space but in math, science and technology as well. The X Prize Foundation, founded by Peter Diamandis, a medical doctor with a degree in genetics from MIT, completed its first competition in 2004, awarding $10 million to Burt Rutan, an aircraft designer, and Microsoft co-founder Paul Allen, after they successfully built an aircraft that flew 100 kilometers into space twice in two weeks.
