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WELCOME TO THE FIRST EDITION OF THE MONTHLY OFFSHORE NEWSLETTER. This is brief of all the major news and headlines from September which you have been viewing on the website and are being tracked and aggregated. The sections also presents a fact based analysis based on what is being reported in the news ( If what is reported in the news is a fact!!). I am looking for your feedback so please provide the same to me to make this more useful for you and pass this on! I do want to give credit to the original news sources who have been reporting on the wonderful world of outsourcing and offshoring.

Some key trends and news worthy articles looking at September news releases on Outsourcing and Offshoring.

Indian firms are global M&A players now. Indian firms are actively engaged or looking to scout for acquisitions both within and outside the country. Cross Border M&A will continue to grow. The size of the deals although will be small in relative size to deals in other sectors in India . Wipro which acquired Infocrossing for $600 million and rumors of Genpact buying Citibank BPO for $700 million are big deals but the other ones will be smaller.


Rupee appreciation causing sleepless nights – Will it change how IT/ITES firms work. Effect of rupee appreciation is having firms looking to find ways to manage cost, ask clients for renegotiated contracts, tighten perks for their employees and look for non dollar revenue streams. There is no short term answer for this problem and will continue to be something Indian firms will have to learn to live with






Growth of domestic markets. Vendors are actively looking for growth in domestic markets in India to potentially augment their revenue streams. Overall domestic market is growing but an interesting trend is that most of the LARGE contracts from Indian firms have gone to multinationals ( Accenture, IBM etc..). The overall domestic market is promising but no where close to the market size in US,UK and other parts of the world Operating outside India – Firms are continuing to expand operations outside of India and go global. The footprint being established is still fairly small. Firms are also doing this to do more PR and dip their toe in the water. The core strength for the firms still stays in India Client deal flow seems strong for Indian firms - Indian vendors are continuing to participate in larger deals and will continue to see visibility into larger deals and will win some too! India is essential location for global players – Management consulting firms are looking to either establish or catch up on their India strategy or will get less competitive. Examples are Bearing Point and CSC who I believe will try and should try to use the inorganic route to get their India strategy working. Pharma outsourcing growth – Non traditional IT and BPO outsourcing efforts in India will continue to grow specially in sectors like Pharma

Growth in insurance sector predicted – After the mortgage fall out insurance BPO seems to be the next big thing Indian vendors are gunning towards. Similar growth is expected in other areas of media and retail 9. Infrastructure management outsourcing growth – Companies are betting big on

Infrastructure outsourcing growth. 10. Customer effect – Offshore services customers both in IT and BPO need to and are already looking more at a global play rather than just India. Indian vendors are also growing their platform globally to meet these needs. 11. Customer contract renegotiation – Vendors are going to be approaching customers to renegotiate if they have the option to do that to counter the rupee appreciation. 12. Customers – Captive or Third Party – The debate is endless and will go on. Customers looking at hybrid models, captives, third parties, insourcing, nearsourcing, homesourcing!! – What ever works! 13. Platform BPO - Buzz Word or True Transformation - Is it truely a market transformation or a new way to bundle old services for BPO players and sell to clients. Platform BPO refers to an integrated approach to bundle IT Systems and Process to support clients.

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BT Signs a 128 million Pound deal with Xansa for F&A TCS to support Roche Global Capacity Initiative Accenture grabs share of BT F&A work AVIVA extends their BOT agreement with WNS from OCT 2007 to Jan 2008 ‘Star Tribune’ outsources display ad production to India TCS,CapGemini,Wipro, Infosys in race for $125 million ING business TCS Signs Global Consulting agreement with MicroStrategy Accenture in $185 million dollar deal to provide Financial Services BPO to Microsoft Accenture – Bristol Myers Open a center in India Dow expects 50% of its IT to happen from India EDS offers early retirement to 12000 Spanco plans to demerge BPO venture Juniper plans to invest $ 70million in R&D in India Wipro and CompuWare announce partnership Patni Computers and ActivPlant offer solutions for manufacturing clients CapGemini signs five year F&A deal with NXP TCS inks deal with Bahrain Labor authority IBM and Scotia Bank expand relationship in $480 million IT outsourcing deal Tricom India signs MOU with US based document solutions Satyam Partners with SISTRAN to offer solutions for insurance industry AA (UK car recovery firm) cancels Pound 50 million outsourcing contract with IBM $ 38 Billion Infrastructure Outsourcing deals knocking on Indian Vendor doors Wipro bags $130 million 5 year contract from British utility Thames Water Accentia Tech bags order worth $3.5 million from UK client for BPO work Wipro and ILOG form strategic alliance

M & A / Deal Talk
 APOLLO HOSPITALS BUYS ATLANTA BASED HEALTHCARE BPO ZAVATA for $170 million  3i Infotech buys 51% stake in BPO Service Provider HCCA.     

HCCA does HR Operations and large scale payroll processing. EQUATERRA ACQUIRES MORGAN CHAMBERS ADVISORY FIRM MASTEK to rasie $30 Million for Acquisitions (ARTICLE) HERO ITES MERGES WITH Telecom Services Centres(TSC) – a leading British telecom company USHA MARTIN GROUP ACQUIRES UK Outsourced Contact Center CONVERSO Finnish firm to buy Fortuna

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Helios & Matheson eyes $100 million buy in Europe Goenka Brothers launches SourcePilani BPO Satyam readies $ 1 Billion war chest for buyouts Avnet looking for acquisitions in India Aptara – a content BPO raises $23 million from American Capital Strategies eClerx and Indian KPO firm planning for an Indian IPO EXL looking for acquisitions in Eastern Europe ACS plans acquisition in India – plans to buy specialty BPO Hinduja TMT sets aside $100 million for IT/BPO acquisitions RSA looking for more buyouts in India Wipro likely to buy MarketRx Aviva BPO Business on the block Satyam on the lookout for IT infrastructure firms NIIT scouting to acquire IT and BPO firms in travel industry

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Interview with S. Mahalingam – CFO of TCS Interview with Genpact CEO – Pramod Bhasin Interview with Sreeram Iyer CEO Scope International Interview with Bino Wadhwa – Sapient Director India

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Virtusa announces 1st quarter results Stocks of many offshore firms attracts Buy rating from Goldman mPhasis expects revenue to jump 60% for the current fiscal year Accenture releases quarterly earnings sees no slowdown

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WIPRO Opens Facility in Mexico Sutherland Global Services – BPO provider adds jobs in Canada HCL Technology steps into China Satyam to make Malaysia the largest software hub outside of India Indian firms looking for places to grow Genpact to open center in Juraez NewGen software new product engineering center in Chennai TCS takes hiring to smaller cities TCS and SAP partner for a center in Pennslyvania Genpact to hire 500 in Cluj – Romania Nova Nordisk relocates data management from Singapore to India

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WNS announces key senior management changes LionBridge announces Donald Muir will join the company as the new CFO Naresh Wadhwa appointed president and country manager for CISCO India and SAARC Mastek Appoints a new CTO - Rajmohan Neervannan James Benson joins Sapient Board BirlaSoft appoints President of US geography – Michael Garber Satyam to increase headcount by 15000 by fiscal year end iGate appoints Hari Murthy as Chief Sales and Marketing officer

 TCS employee strength touches 100,000

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F & A Outsourcing market moving upstream Coming of MiFiD in UK and it’s affect on outsourcing A playbook to deal with IT offshore vendors – lessons from GM India companies moving to offer platform BPO Indian markets hot for Indian BPO providers Rupee appreciation – No more hefty salary increases in IT sector Onsite employees will have to sign bonds for Indian providers HCL Technology bullish on retail outsourcing CSC gets serious about offshoring strategy Is Bearing Point falling behind in their offshore strategy ChemoInformatics – New niche in offshoring to India Insurance BPO to create a $2 billion opportunity for vendors Indian rupee falls below Rs 40 after 9 years Cognizant BPO sees huge growth in Pharma,Healthcare and Media

List of companies mentioned in news:
3i Infotech Accenture ACS ActivPlan Adventity Aviva Bearingpoint BirlaSoft Bristol Myers BT CapGemini CISCO Cognizant Compuware CSC Dow Chemicals eClerx EDS Equaterra EXL Genpact HCL Hinduja TMT IBM iGate Infosys ING Juniper Lionbridge MarketRx Mastek Microsoft mPhasis NIIT Patni Computers RSA Roche SAP Sapient Satyam Scope Scotia Bank TCS Tricom Usha Martin Virtusa Wipro WNS Xansa