China setback for Infosys

Infosys Technologies admitted on Wednesday that its China operations were growing more slowly than expected, with the company’s customers preferring to use its English-speaking outsourcing base in India.

The comments from India’s second-largest computer services company highlight how China is failing to fulfil its early promise for Indian outsourcers of becoming a rapidly growing alternative pool of talent.

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Learn from China's farm sector experiment: Narayana Murthy

`IT sector should equip stakeholders with information for value-addition'

Bangalore: The Government should learn from the Chinese experience of drawing marginal farmers into low-tech manufacturing industries, Infosys Chief Mentor N.R. Narayana Murthy has said.

He was delivering the keynote address at the fifth international conference of the Asian Federation for Information Technology in Agriculture (AFITA) here on Thursday.

China had successfully moved 150 million people from farming into low-tech sectors. In India, where 72 per cent of the population involved in agriculture was facing the challenges of stagnant growth and depletion of resources, the Information Technology sector should help stakeholders by equipping them with relevant information for value-addition, he said.

This was particularly relevant in a situation when severe shortfall of food grains was imminent. By 2010, the demand for wheat in India was expected to reach 84 million tonnes as against a stipulated production of 70-72 million tonnes, Mr. Narayana Murthy said.

The water table in places such as Punjab and Haryana, which depended heavily on tube wells, was sinking by an alarming 20 cm a year, he said.

The success of experiments such as the Bhoomi project initiated by the State Government to digitalise land records and the e-Choupal project spread across six States to make information accessible to farmers were good examples of how IT could help, Mr. Narayana Murthy said. The crucial thing was to provide easy access to affordable broadband across rural India, he said.

Speaking on the occasion, Principal Secretary, Agriculture and Horticulture, A. Ramaswamy, said the State had the ambition of doubling its agricultural production in the next 10 years, leveraging its IT potential of the State.

India was "not a tiger economy but a elephant economy" that might not have speed, but had strength, he added.

The inaugural session was attended by Seishi Ninomiya, Secretary-General of AFITA, and V.C. Patil, president of the Indian Society of Agricultural Information Technology.

Chief Minister H.D. Kumaraswamy and Deputy Chief Minister B.S. Yediyurappa, who were expected, did not attend the function.

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Infosys to invest $65 million in China

Infosys plans to invest $65 million in China expansion and planning to set up new facilities in Hangzhou and Shanghai.

Infosys Technologies said Wednesday that ramp-up in its Chinese operations was happening at a slower pace than expected over clients' concerns on protection of intellectual property (IP) in that country.

Infosys' head of delivery, Mr S. Shibulal, said that clients were diffident to the company's proposition of getting serviced from China over IP protection.

Global clients wary

"The global clients are still not yet convinced about China as an ideal location for offshore outsourcing. We are still trying to convince them," Mr Shibulal said adding that client' diffidence would not have an impact on company's expansion plans.

Infosys, which started operating from China few years ago, has managed to add a little over 700 people there. Infosys plans to invest $65 million in expanding its Chinese operations over the next five years with a targeted headcount of 6,000 and is setting up two new facilities in Hangzhou and Shanghai.

However, Mr S. Gopalakrishnan, President and COO, said the company was unlikely to take a re-look at its Chinese investment plans. During the September quarter, Infosys managed to get its first million-dollar client in China. The company, which clocked revenue of $2.5 million in China during second quarter, posted losses to the tune of over $1.33 million, he said.

Infosys' consulting subsidiary also continued to post losses. "We are still in an investment mode and it may take about two to three quarters to achieve a break-even," Mr Gopalakrishnan said. Infy's consulting business grew 29 per cent to post revenues of $13 million and a loss of $3.3 million.

Good growth

But other subsidiaries, Infosys Australia and Infosys BPO posted good growth during the quarter. Infosys BPO grew 20 per cent quarter-on-quarter to clock revenues of Rs 157 crore. Profit margin for Infosys BPO stood at 23.3 per cent. Infosys BPO added three new clients during the quarter to take its overall client base to 24.

The BPO outfit added 2628 people to take its overall employee base to 9,776 and had an attrition rate of 38 per cent. Infosys Australia clocked revenues of $24.97 million and had a profit margin of 17 per cent.

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Infosys to Expand in China to 6000 Employees over 5 Years

India-based software outsourcing Latest News about Outsourcing company Infosys plans to increase its investment in two new centers in China to a total of US$65 million over five years, after which it will be able to house a total of 6,000 engineers at its three centers in that country. The centers will produce work in the areas of software development, IT services Latest News about IT services and business process outsourcing, and will also have training and research facilities.

Infosys plans to double the number of its workers in China to 1,000 this year. Bigger rival Tata Consultancy Services plans to increase the number of employees in China to 5,000 by 2010, from about 400 now.

The company said on Wednesday that it would set up a new center in Shanghai with seating capacity for 1,000 engineers over the next two years. That facility will be in addition to a facility the company already has at the Shanghai Pudong Software Park that employs about 250 people, according to Dhawan.

"China is a domestic market for us because many of our multinational clients are expanding in China," Chief Executive Officer Nandan Nilekani said in an interview in Singapore.

It is a "potential source of resources for our global clients and a potential
The company is setting up a center in Hanghzhou, China, at the Hanghzhou Hi-Tech Development Industry Zone, the company said in a statement.

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