Banks to spend 13% more on IT this year: Report

 

Banks and securities companies will increase their spending on IT products and services by 12.7 per cent to Rs 47,700 crore in 2014, says a report. 

"Domestic banking and securities companies will spend Rs 47,700 crore on IT products and services in 2014, an increase of 12.7 per cent over 2013 revenue of Rs 42,300 crore," IT research and advisory firm Gartner said in a report. 

The estimate includes spending by financial institutions on internal IT services (including personnel), IT services, software, data centre technologies, devices and telecom services. 

Gartner research director Vittorio D'Orazio said banks will continue to focus on expanding their branch network. He expects about 2,000 new branches in the country by the end of this year. 

"This strategy, triggered by the need for expansion and for getting market share, is also underpinned by the new bank licenses released by the RBI," he said. 

The modernisation of the back offices, as well as the need to be compliant with international regulations, and increased challenges from new more demanding customers are other trends Gartner sees in the markets. 

IT services will be the largest segment in overall spending in the banking and securities market at Rs 14,900 crore in 2014, due to the continuous focus on the financial services sector by IT services providers. 

The IT services segment is forecast to increase at the third-fastest growth rate at 15.3 per cent compared to 2013. 

Internal services, which includes IT personnel, is projected to be the fastest growing segment at 21.6 per cent in 2014, largely due to the expansion strategies of banks across the country, especially in rural areas, which require more personnel on the field. 

Software is expected to be the second-fastest growing segment, with 19.2 per cent growth in 2014, the report said. 

In the software segment, vertical specific software is the fastest sub-segment due to core banking system replacements and other back-office consolidation which will steer banks from internally developed software to external packages.

New record set for data-transfer speeds

 

Researchers have set a new record for data transmission over a multimode optical fibre - sending data at a rate of 64 gigabits per second. 

Researchers at the International Business Machines Corporation (IBM) sent data at a rate of 64 gigabits per second (Gb/s) over a cable 57-metres-long using a type of laser called a vertical-cavity surface-emitting laser (VCSEL). 

The achieved rate was about 14 per cent faster than the previous record and about 2.5 times faster than the capabilities of today's typical commercial technology, researchers said. 

The achievement demonstrated that the standard, existing technology for sending data over short distances should be able to meet the growing needs of servers, data centers and supercomputers through the end of this decade, they said. 

To achieve such high speeds, the researchers used the VCSEL lasers developed at Chalmers University of Technology in Sweden and custom silicon-germanium chips developed at IBM Research. 

"The receiver chip is a unique design that simultaneously achieves speeds and sensitivities well beyond today's commercial offerings," said researcher Dan Kuchta of the IBM TJ Watson Research Center in New York. 

"The driver chip incorporates transmit equalisation, which widens the bandwidth of the optical link. While this method has been widely used in electrical communication, it hasn't yet caught on in optical communication," he said. 

"Researchers typically rely on a rule of thumb that says the usable data-transfer rate is about 1.7 times the bandwidth," Kuchta explained. 

"That means that with the VCSEL laser, which has a bandwidth of about 26 GHz, the rate would be only about 44 Gb/s," he added. 

The fast speeds only worked for a distance of 57 metres, so this technology is not designed for sending data across continents. Instead, it's most suitable for transmitting data within a building, Kuchta said.

Pay hike to be 10 per cent this year, lowest since 2009: Aon Hewitt

 

 India Inc is expected to dole out a 10 per cent salary increase in 2014, the lowest in five years, according to a survey by Aon Hewitt. 

In 2013, the average salary increase was 10.2 per cent while in 2009, it was 6.6 per cent. 

According to the global human resource solution provider, the average salary increase for 2014 as projected by over 500 organisations in India stood at 10 per cent, with a range of 8.8 per cent to 12 per cent across industries. 

The years 2012-14 are witnessing a sort of "plateauing" in salary increases as compared to the high double-digit increases in the last decade, according to the report. 

"This period reflects the easing off of the unsustainable, turbo-charged, pre-crisis economic growth. Even though growth appears to be strengthening in both advanced and developing economies, it is expected to be muted and slower paced than in the pre-2008 era," Aon Hewitt India Rewards Consulting Practice Leader Anandorup Ghose said. 

Sectors largely reliant on the domestic economy such as pharmaceuticals, chemicals, engineering services and consumer goods, project the highest salary increases, typically above 10 per cent for 2013-14. 

Retail, financial services and hospitality forecast a lower range of salary increases, with these businesses affected by the slowdown in the economy and consumer spending. 

Globally, Venezuela projected the highest salary increase (24.9 per cent), followed by Argentina (24.3 per cent) and Vietnam (11.1 per cent). 

Continuing the trend of the previous few years, the developed economies of the US, the UK and Japan show salary increases in the range of 2.4 per cent to 3 per cent. 

India leads salary increase projections across key APAC countries, followed by China. 

Reasons for lower budgets include concerns over fluctuating economic conditions, cited by 57.6 per cent of the respondents. A third (33.5 per cent) said their organisation is undergoing cost reductions. 

Some organisations are managing wage cost escalation by freezing hiring, transferring salary increases from fixed pay to variable pay and recruiting replacements at lower salaries. 

Interestingly, the pace of top management salary increases has been slowing over the past seven years. 

Rewards for key talent are likely to continue. As against an overall salary rise of 10 per cent, key talent would get a 13.9 per cent salary hike this year, the report said. 

"Organisations are exercising prudence in overall salary increases but investment in key talent continues. Gap between salary increase awarded to key talent vs others is widening year-on-year," the report said. 

Overall attrition reduced to 18.5 per cent in 2013 from 19.3 per cent on account of slow economic growth and limited job opportunities, the report said.

Appirio plans to recruit 600 employees for Jaipur office

 

Appirio, a global cloud consulting company, plans to recruit more than 600 employees in its office here by 2017 as part of aggressive global growth plans. 

The company has started its operations in global cloud consultancy from the office situated in IT special economic zone (SEZ) here and the team of 140 professionals is supporting clients of abroad. 

"We aim to build our employee base to more than 600 employees in India by 2017 and with the growing team, we will be able to deliver even higher quality and cost-effective levels of service to our more than 800 medium to large clients worldwide," Chris Barbin, CEO Appirio, said. 

"Besides recruitment from IITs, we will be collaborating with local engineering and technical institutes so that mainly local talent can be hired and job opportunities could be provided to them," he told PTI here today. 

"Jaipur office is single largest office in India and a strategic location for us and from here, we will help the company achieve growth potential and help companies power their business with the cloud. 

"The Jaipur team will deliver business function and technology solutions as well as operations support to global customers." 

"Building a strong team capability to architect and manage challenges is another strategic focus for the Jaipur team," Appirio India GM Manpreet Singh said. 

Started in 2006, the San Francisco headquartered company deals in cloud computing -- a practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.

Why enterprises are increasing cybersecurity budgets

Almost 60% of top firms in the United States, Canada, Britain and Australia have boosted their cybersecurity spending following the theft of data of millions of customers from US retailer Target and other big companies, a report said.

A survey of senior IT officials in companies ranging from banks to mining, technology and law by BAE Systems Applied Intelligence showed US firms already spending 15% of their entire IT budgets on improving security. The number looked set to rise.

In the United States, 60% of those surveyed said their cybersecurity budget would increase as a direct result of recent high-profile attacks. That compared to 49% in Britain, 54% in Canada and 64% in Australia.

Between November 27 and December 14, US retailer Target lost details of some 40 million credit and debit card numbers and 70 million customer details to hackers.

Many other firms including banks have also had data stolen either by employees or those who broke into their system from outside.

"New technologies, changing business practices and an increasing reliance on inter-connected critical systems and infrastructure are all increasing our vulnerability to attack," the report said.

"It will be those organizations that truly integrate security intelligence into their operations that will reap the benefits and deliver business growth."

Formerly known as Detica, BAE Systems Applied Intelligence is the cyberarm of the British defence company.

More than 80% of those surveyed expected the number of cyberattacks to rise. Loss of customer data was by far the greatest concern, followed by the loss of trade secrets, reputational damage and interruption of service.

In the United States, 29% of respondents estimated a successful cyberattack could cost their organizations more than $75 million. Almost half said it could cost more than $15 million.

The assessment of threat varied somewhat by region and industry, the report said. US firms believed intellectual property that was the second greatest threat to their networks after professional fraudsters while in Britain that place was held by activists, and in Australia by "hobbyist" amateur hackers.y.

Top 10 predictions for CIOs for 2014

Predictions - CIO Agenda, highlights the top 10 predictions for the CIOs through the year ahead. The predictions provide insights on long-term industry trends along with new themes that may be on the horizon that will most impact the role of the CIO. While the 3rd Platform of mobile, social, big data, and cloud services is just beginning to mature, it will require an entirely different set of IT skills and roles many of which are yet to be invented.

"The digitisation of the corporate world is accelerating, and with new technologies enabling the process, CIOs have an unparalleled opportunity to emerge as true business leaders. They will need to step up to the role of Chief Innovation Officer or risk becoming irrelevant in the years to come. " Says Jaideep Mehta, VP and Country General Manager, IDC India

"Organizations need to be cognizant of degree of changes and personalization customers are expecting today. There is a huge need for personalization, relationship sensitivity, service orientation & redefining service levels across all channels, differentiated offering, experience management and predictability . IDC observes that organizations need to revisit their offerings, services and processes to encash the potential of the 4 Pillars - Social, Mobility, Cloud and Analytics. Organizations are expected to go beyond their comfort zones drive innovation and create differentiation and to take advantage of "Edge Technology" "opines Shalil Gupta, Director Insights and Consulting.

According to Fred Magee, adjunct research advisor with IDC's Research Network, "We believe there are clear indicators that the existing role of technology management will evolve in a few short years to a set of roles that includes management of innovation, information intelligence, customer experience, and digital business presence. It's going to be an exciting decade."

The Top 10 Predictions are:

Prediction 1 - In two years, over 70% of CIOs will change their primary role from directly managing IT to become an innovation partner

Prediction 2 - Before 2017, only 40% of CIOs will rise to produce business enhancing insights from big data and analytics

Prediction 3 - 70% of CIOs will increase enterprise exposure to risk to accelerate business agility through increased cloud adoption

Prediction 4 - Enterprise business mobility will require 60% of CIOs by 2017 to support an agile architecture with next-generation mobile applications

Prediction 5 - The demographic shift to young and mobile customers will require 80% of CIOs in consumer-facing businesses to integrate IT with public social networks by 2015

Prediction 6 - By 2015, 3rd Platform requirements will drive 60% of CIOs to use enterprise architecture (EA) as a required IT tool, but only 40% will deploy EA effectively.

Prediction 7 - By 2015, 60% of CIO security budgets for increasingly vulnerable legacy systems will be 30-40% too small to fund enterprise threat assessments

Prediction 8 - By 2017, the transfer of 3rd Platform investments from IT to line-of-business budgets will require 60% of CIOs to focus the IT budget on business innovation and value

Prediction 9 - By 2016, 80% of the IT budget will be based on providing broad portfolio of IT and business services

Prediction 10 - By 2018, adoption of 3rd Platform IT technologies will redefine 90% of IT roles

Infosys to hive off products business, Sanjay Purohit to be CEO

Infosys will hive off its products, platforms and solutions (PPS) business into a separate subsidiary at the beginning of the next financial year, Rohan Murty said in an address to employees at an informal JAM session held at the company's Electronics City campus on Tuesday.

The new division, called Edge Works, will have a three-tier structure, one focusing on understanding market needs, another on product development and a third on implementation at client sites, said sources at the session. Sanjay Purohit will be the CEO of the division and Samson David will be the COO.

Murty is Infosys founder and executive chairman N R Narayana Murthy's son and part of the chairman's office. The possibility of a hive-off of the PPS division was first reported by TOI in December. Infosys's successful banking product, Finacle, will be part of the subsidiary.

The division accounts for about 5.5% of Infosys' over $8 billion revenue. The IT company's vision under its Infosys 3.0 strategy has been to raise it to 33%, but more than three years into this strategy, the PPS needle has barely moved. The primary argument for a hive-off is that the culture and compensation structure of a products and platforms business has to be vastly different from that of a services entity. Infosys has said that acquisitions would be important for PPS to make a leap.

"How you build PPS is very different from that of services and BPO. The move gives the PPS team the freedom to build out the software and products culture required for success. This means building in a more long-term software orientation. This also allows the company to make acquisitions should it wish to do so," said Ray Wang, CEO of US-based research advisory firm Constellation Research.

It is learnt that the company has dissolved the existing PPS structure. The company has recruited 600 senior level executives (delivery managers and VPs) from within the company to be a part of what it calls the business platform group (BizP), a product insight group to conduct market feasibility, sources said.