epages News [Software Companies, November 2003]

TechBooks to add more pages to India chapter

Nov 01, 2003: New Delhi: Techbooks, a provider of electronic content solutions announced that it had closed a $2.5m round of financing from Ticonderoga Capital and Blue Water Capital. Half of this would be used for expanding Indian operations. To be channelled into global and Indian operations, 50% of the funds would be used for marketing operations worldwide and the rest to augment back-end infrastructure and enter new verticals like e-learning in India.

The end-to-end electronic content solution market is worth nearly $10bn. At present, only 30-40% of the available volume of work is being outsourced to India by clients predominantly in the US and UK as well as New Zealand and Australia. TechBooks, which is headquartered in Fairfax helps publishing houses by completely outsourcing content development, design and layout from them. It services all media print, online and wireless but most clients are in publishing. Through three development centres in Delhi 2,000 professionals handle development of content, conversion, copy editing and so on. Other notable players in the segment of electronic publishing solutions include Cadmus-Datamatix and Innodata. Given the demand for specialised content creation, TechBooks plans to further broadbase its service portfolio to healthcare and pharmaceutical content as well.

Oracle to launch new infrastructure software

Nov 03, 2003: New Delhi: Software company Oracle India said that it would roll out next month its new infrastructure software, '10g', which has been partly developed at the company's development centre in Bangalore. The software is aimed at enabling organisations to implement utility computing based on grid computing technology. The software comprises Oracle Database 10g, Application Server, Enterprise Manager and Developer Suite. Oracle 10g is the only infrastructure software available to enterprise grid computing. The India development centre has played a major role in the development of Oracle 10g, adding server technology division was actively working on this. The price of the software for small companies would be about Rs 45,000.

Microsoft launches mgmt course with IIMB, NASSCOM

Nov 05, 2003: Bangalore: Microsoft announced a software business management programme for Indian Independent Software Vendors (ISVs) in collaboration with Indian Institute of Management Bangalore and NASSCOM. The course has been developed by Enterprise Development and Research Institute, a wholly owned organisation of the Southern Cross University, Australia, and would be delivered to ISVs by Microsoft in collaboration with IIMB and NASSCOM. Research shows that while most Indian ISVs have the technical know-how to build globally competitive products, the area where they lag behind is sound business management. A Microsoft release said the course features topics such as the environment and its analysis, the value chain, value creation, loyalty and business planning. The course would also draw upon the collective experiences of software vendors operating across markets, a database of relevant benchmarks, business cases, and software industry management topics. NASSCOM said it would market the availability and value of the course.

Microsoft to speed up Asian product development

Nov 05, 2003: Beijing: Microsoft Corp said that it would expand its Asian research centre to shorten the time needed for ideas to become viable products as the firm fights off growing competition from Linux-based rivals. The world's largest software maker, which is trying to move its business beyond desktop computers into devices, plans to add another 80 developers and engineers to its Beijing-based Microsoft Research Asia centre. But there will be no infrastructure investment.

The firm competes against Oracle Corp, IBM Corp, Sybase Inc and China’s home-grown Kingsoft Co. in a domestic market worth about $800 million in 2002 and growing at 25% a year. Microsoft was trying to speed up the gestation period, often years, between a great idea and a great product. Microsoft has come under increasing pressure from Linux, a cheaper software standard that can be copied and modified freely. Japan, China and South Korea have agreed to collaborate on building a computer operating system to rival Windows.

IT imports to be exempt from withholding tax

Nov 10, 2003: Mumbai: Software imports will be exempt from withholding tax after the Income Tax Appellate Tribunal’s (ITAT) recent order that payment for such imports is not royalty and cannot be taxed. The decision is a great boost to Indian companies who import application software as the I-T department has been treating payment for such imports as royalty. The tax payable for royalty fee is 20% under the Indian Income-Tax Act, ‘61 and 10-15% under the Double Taxation Avoidance Agreement (DTAA) between India and the US. ITAT’s order comes ahead of a decision of the government on the taxability of such imports on the basis of a report submitted by the Emerging Issues Task Force (EITF), a committee set up to advise on latest tax issues.

Though the government is yet to announce the report’s contents, it is learnt that the Task Force too recommended tax exemption to such software imports. The ITAT made this order on an appeal filed by Lucent Technologies Hindustan based in Bangalore, manufacturing electronic switching systems. The company imported hardware and software from Lucent Technologies, US, for making switches for sale to the Department of Telecommunications (DoT). The I-T department viewed such payment as royalty and said tax should have been deducted before making payments to the foreign company.

Oracle revises charges after new PeopleSoft rebates

Nov 12, 2003: New York: Oracle Corp. revised its lawsuit against PeopleSoft Inc., warning that PeopleSoft's latest customer rebate program could make it prohibitively expensive for the world's second largest software company to complete its $7.3 billion hostile takeover bid. Oracle claimed in court papers that the rebate plan, which doubles as an anti-takeover measure, flouts responsible corporate governance and entrenches its board in a ploy to thwart the deal, which Oracle launched earlier this year. After Oracle unveiled its offer, PeopleSoft adopted a so-called customer assurance program that provides for hefty refunds to its customers in certain cases if the company is acquired. In October, it disclosed a new money-back offer that is also triggered if control of the company changes.

The new programme takes effect if new board members are elected, effectively entrenching the existing directors. In the event that new board members are elected it could cost the company as much as $800 million in customer rebates under the two programs, Oracle said, citing PeopleSoft disclosures. PeopleSoft has reached deep into the takeover defence playbook by offering payments to customers in the event of a deal and also by tying the provision to changes on the board. PeopleSoft's Swasey said the rebate programs are only triggered if an acquirer fails to support and develop PeopleSoft products the same way the company does now. Oracle has said it would support existing PeopleSoft products but would not develop new ones.

Smaller MNC arms target overseas biz

Nov 13, 2003: Bangalore: The emerging popularity of‘Brand India’ in the software services space is now assisting India-based medium sized software units of MNC companies target customers outside the country. Captive MNC software units said that cost and talent strengths that India will give them an advantage over local competitors in many geographies. CEOs of these companies however were unwilling to openly admit on their plans to venture outside the captive mould. Software firms that are looking at customers outside their boundaries are confident of their experiment being a success due to strong brand image that Indian has gained as theright destination to produce quality software.

Software Research Associates (SRA), Japan’s oldest and largest independent software company for instance is betting on the strong India branding to get both Japanese and non-SRA clients in US market. SRA India, its majority owned entity plans to go after corporates in the US to which it will offer a range of software services in the open source domain. With the offshoring concept maturing, MNC subsidiaries that have been in India for a reasonable period of time will now look at clients from other locations. Besides providing more revenues to parent, it will help most subsidiaries to switch from a cost to a profit centre mode.

Fortune Info to raise funds for global expansion

Nov 17, 2003: Hyderabad: Software products firm, Fortune Informatics, has appointed a UK-based market research organisation to help formulate marketing strategies and suggest ways to raise funds in supporting its marketing plans. The company plans to raise funds for making a foray into global markets from the next financial year.Fortune is a software products development company with a range of solutions in imaging, workflow and enterprise-wide document management. Fortune is a software products development company with a range of solutions in imaging, workflow, enterprise-wide document management and output management solutions. The company has partnerships with hardware firms such as Ricoh and NRG Group on a global scale, while its domestic partners include Tata Infotech, PSI Data Systems, CMS Computers, and Bill Junction Payments. The company has launched its latest product offering the k-Click ReportSuite ‘ Enterprise’.

New Windows security tools unveiled

Nov 17, 2003: Los Vegas: Microsoft Chairman Bill Gates unveiled a new feature expected to be built into the next major release of the software maker's Windows operating system, a search tool that aims to make it easier to find information stored on personal computers. Extending Microsoft's software into a variety of gadgets such as watches and mobile phones, as the world's largest software maker tries to tap into new growth to reduce its dependence on slowing PC sales. In order to tackle the increasing proliferation of information passing through desktop computers, Gates demonstrated a new feature called "Stuff I've Seen," which could be incorporated into the next version of Windows, code-named Longhorn. It will allow users to track their files, email, Web pages and other information that they see on their computers. Although similar in concept to the "recent documents" feature in Windows, the software captures a wider range of files and displays them in a single simplified interface. Available in mid-2004 as an add-on to Microsoft's email software products, "SmartScreen" technology developed by Microsoft's research arm will filter e-mail to prevent unwanted email advertising and malicious messages from reaching recipients' inboxes.

Microsoft, which vowed to improve the security and reliability of its software in a "Trustworthy Computing" initiative nearly two years ago, also said it will introduce new server-based software to secure computer networks. Dubbed the "Internet Security and Acceleration Server," Microsoft said it would make the network perimeter protection product available in the first half of next year. Tablet PC, the pen-based PC that debuted a year ago running a special version of the Windows XP operating system, will also get an upgrade by mid-2004 with improved handwriting recognition.

Higher IT spends in 2004

Nov 18, 2003: New Delhi: Even as the domestic software industry is hoping for a tech recovery in the US next year, US companies continue to spend lesser on IT than what they had budgeted for. Higher IT spending in the US would impact global IT industry and, significantly, the Indian software industry, with US accounting for over 60% of the country’s software exports. While IDC had predicted a 5% increase in IT spending, 2004 would see a 5% increase in IT spending around the globe which, would amount to $916 billion. Forrester Research expected it to go up to $ 729.2 billion next year. The index points to a likely increase in spending by mid-size and large companies in the coming year. The segment makes up for nearly 44% of total IT spending. So, if these companies spend more, it could drive the overall demand for IT products and services.

While a section of the industry is worried about spending being lower than planned, many are hoping the tech decision-makers may spend most unspent dollars next month as the year ends. In recent months, reports have not painted a consistent picture of the future of IT spending. A survey of CIOs by Merrill Lynch found that improvement in IT spending was not likely before the second half of 2004, if not 2005. Many others expect a recovery in the beleaguered sector next year.

SAP teams with Sybase, cuts reliance on Microsoft

Nov 18, 2003: New York: Europe 's biggest software firm SAP AG said it was teaming up with U.S. software maker Sybase Inc. to offer its Business One packages for smaller businesses, reducing its reliance on Microsoft Corp. SAP's software for bigger businesses already run on the Unix operating system, but until now, its offering for smaller companies was an exclusively Microsoft application. Cooperation with Sybase, known for selling database software to mobile services providers and financial services companies, will allow SAP to offer Business One on the Unix and Linux operating systems. Unix is an operating system used mainly by big businesses. Linux is a fast-growing alternative to the dominant Windows platform from Microsoft.

Costs of Linux and Unix - based Business One varies only slightly from the Windows-based version. SAP, which has been offering Business One for a year and a half and has 1,600 customers. SAP has been trying to win new clients among smaller businesses, expanding its traditional field of enterprise software for big companies, where it is already dominant and running out of potential new clients. The software market for small businesses will account for 53% of technology spending growth in 2003. Sales are expected to be particularly strong in Asia, where Sybase has a big operation. The Dublin, California-based Company also partners with PeopleSoft Inc. to offer enterprise software for big companies.

Microsoft in deal with GameSpy for online PC games

Nov 20, 2003: Seattle: Gaming technology company GameSpy said that it had signed a deal with Microsoft Corp. that will help turn the software maker's personal computer games into online games. Financial terms of the multi-year deal were not disclosed. Under the agreement, Irvine, California-based GameSpy will provide software technology that will allow Microsoft to manage and create online communities for PC-based games, including the PC version of "Halo", the blockbuster action game that debuted on Microsoft's Xbox video game console. Redmond, Washington-based Microsoft said it a statement that it will focus on creating games while GameSpy "handles the mechanics of putting and keeping our games online." That strategy is in contrast to Xbox Live, where Microsoft has developed much of its own technology to enable online game play for its Xbox console.

Sun Micro in China deal to take on Microsoft

Nov 20, 2003: Beijing: Network computer maker Sun Microsystems has signed a desktop software deal with a Chinese firm that takes aim at rival Microsoft in the fast-growing market. The US firm aims to provide China Standard Software, a group of state companies that promotes open-source Linux software, with at least 200m copies of its desktop software. The Chinese government has said it wanted to build a domestic software industry around Linux, a cheaper rival to Microsoft’s Windows that can be copied and modified freely. The firm’s software package, called Java Desktop, runs on software developer SuSe AG’s version of Linux, the freely available operating system and on Solaris, Sun’s version of the Unix operating system. Sun plans to provide its Chinese partner with at least 500,000 units per year under the multi-year agreement, Gong said. He declined to give details on the deal’s value saying, “It’s easily in the millions of dollars and probably much more.” The software costs $100 per user per year in the US.

Sun threatens to burn Microsoft, warms small users

Nov 22, 2003: Singapore: Sun Microsystems is introducing low cost computing solution for small businesses and home users. At $100 per user per year, Sun is offering Java Enterprise Server Solution (JEES) which will compete directly against similar products offered by Microsoft. Simultaneously, the US MNC is also launching Java Desktop Solution (JDS) for home users at $100 per user, which will be pitted against MS Windows and MS office, which are the top-selling product both in India and abroad in the home segment. As against this, Microsoft’s latest desktop operating system Windows XP sells for around Rs 18,000 or $950. In addition, the home users had to shell out a similar amount to get MS Office XP. Sun’s JDS package includes Linux desktop operating system, an office suit, an Internet explorer and a graphic user interface. The package will come its source code enabling corporates and individuals to customise the products to suit their requirement.

JEES package on the other hand will include both desktop operating system and Solaris OS to run servers. The world-wide launch of JDS is expected in December this year, while JEES is being already marketed by Sun. The company plans to market JDS a low cost alternative to “costlier” MS Windows. It’s target being computer users in government, educational institutions and small offices. Besides, a strip-down version of JDS is also available for free download for home users. This is the first time that Sun had made a foray into the small business and home computing segment. Till now, the company’s operations were restricted to selling Unix based servers targeted at large corporates. According to senior officials in the company, launch of JDS and JEES is part of Sun’s long-term strategic plan to consolidate its bread and butter business of Unix servers and turnaround its global operations. For last eight quarters the company has reported losses, the success of JEES and JDS will for the first time provide Sun with low-margin but a volume business.

 
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