Friday, July 16, 2010

2010 is the Year of Transition, Gartner Says

On the threshold of the publication of the 2010 edition of Gartner’s annual CIO Survey, where 1600 of CIOs were asked about their plans and priorities for the year, Mark McDonald, GVP of Gartner Executive Programs, shared some of its findings.

According to the survey, 2010 will be a time of transition from recession to recovery economically, strategically from a focus on efficiency to productivity, and technically speaking from heavyweight to lightweight technologies. But all the while IT budgets will remain tight. Only 6% of the polled CIOs see actual real growth coming in 2010.

Leading CIOs are inventing new rules for the new economy with the focus on productivity, collaboration, and innovation. Strategically CIOs are reshaping their focus from cost efficiency to productivity. This shift is critical for capturing customers and market shares. Additionally, business leaders are reconnecting IT with business performance.

Interesting is the 3-year forecast: by 2013 CIOs see technology as transitioning their role from technology service provider to a source of competitive advantage. This trend is also observed by Zinnov in the outsourced product development space we discussed earlier.

Technology choices are transforming as well. CIOs predict a shift to lightweight technologies that can be implemented quickly without significant expense. For instance, virtualization is the top technology, followed by cloud computing and social tools. Virtualization investment expenses are expected to accelerate in 2010 as Gartner estimates that until now only about 1 in 5 services has been virtualized.

Based on the results of the survey, Gartner recommends CIOs to concentrate on operational results and relationships as well as to focus more on raising productivity than on cutting costs as raising productivity increases opportunity to create value while cutting costs doesn’t drive growth.

2010 should be a year of the transition from IT being a resource based, back office function to a result-based source of innovation and advantage.

Source: Gartner

Monday, July 12, 2010

R&D Partnerships Should Become More Strategic

A recent study conducted by Zinnov on Software R&D globalization revealed that only 5% of this R&D spend is currently being spent on outsourced partnerships, which means about 95% of the R&D is made by companies in-house. This presents a tremendous growth opportunity for companies providing Outsourced Product Development services.

We attended the webinar on 'Globalization Opportunities in Software Development for Enterprises and ISVs' where Zinnov experts shared further research results.

Vamsee Tirukkala, Co-Founder & Managing Principal, Zinnov, commented on the trend that companies leverage 3rd party global centers mainly for cost savings and access to relevant talent. 83% of the audience confirmed the increasing importance of OPD by answering affirmatively to one of the audience poll’s questions (“Are companies increasingly looking at OPD service providers for global RnD and product development?”).

With a freeze on spending in the face of recession and plans to optimize on investments made over the past 12 months, companies need to rapidly evolve and transform their emerging location centers to increase their innovation capabilities.
Mr. Tirukkala also advised software producers to rapidly their OPD partnerships to the next level with more engineering and product leadership and strategic responsibility. Another audience poll showed that customers consider China and Eastern Europe to be the next most attractive locations for R&D investment, following India that leads in resource volumes, while Eastern Europe is a hot spot of software engineering talent.

Globalization opportunities for enterprises and ISVs seem bright, according to Zinnov, with several small and medium sized companies beginning to work directly with 3rd party providers. “A huge trend we are seeing in the industry in the last 18 months is what we call as the 'go to market' strategy. It’s what vendor partners can bring to the table. If you are a partner in a well-known reputed company, they have the capability to take your product to multiple markets," commented Mr. Tirukkala.

The new pricing models (outcome based pricing, revenue share pricing and risk reward pricing) offered by vendors to clients are adding to the attractiveness of partnerships, he said.

Source: Global Services

Friday, July 2, 2010

In-House or Outsourced IT Infrastructure?

According to a new research, commissioned by Savvis Inc., a provider of cloud infrastructure and hosted IT solutions for enterprises, the number of companies that outsource their IT infrastructure is expected to increase drastically from 17 percent today to 64 percent in 2020. This independent survey was conducted by Vanson Bourne, a research-based technology marketing consultancy.

The research firm surveyed more than 600 IT and business decision makers from mid to large enterprises and public sector organizations based in the United States, United Kingdom and Singapore.

Sixty-one percent of respondents believe managing IT in-house provides no competitive advantage and has to stop.

"With the rise in acceptance of outsourcing within the IT industry, and the related economies of scale that accompany the managed services model, businesses are finding it difficult to justify owning their own IT infrastructures," said Bryan Doerr, chief technology officer at Savvis, Inc.

It was also revealed that the UK will see the biggest shift from in-house IT infrastructure to outsourcing, falling from 90 percent today to 23 percent in 2020, the USA from 82 percent to 49 percent and Singapore from 62 percent to 38 percent.

In looking at 2010, organizations cited cost savings (58 percent) and growing revenue (54 percent) as their top strategic priorities. The biggest issue organizations face concerns doing more with less budget (54 percent).

Source: Savvis, Inc.

Wednesday, June 30, 2010

Banks Find Tech Talent in Eastern Europe

Barclays Capital has unveiled their plans to recruit 500 IT professionals for a new tech centre in the Ukraine.

BarCap is teaming up with EPAM Systems, the largest and most experienced software engineering services provider in Eastern Europe, which will build and operate the new tech centre in Kyiv. It already employs 50 engineers, but by the end of 2012 that figure will rise to 500. The jobs being created in Kyiv are fairly high-end development roles.

Obviously, it's not a new phenomenon for banks to look to Eastern Europe for IT functions. BarCap itself already has a technology center in Prague, as has Commerzbank captured Czech’s advantage in outsourced software development, Poland is a preferred destination of Citigroup and UBS, where both run their service centers. Deutsche Börse also shifted some 270 tech roles from Frankfurt and Luxembourg to Prague in March.

BarCap has cited strong local technical talent and analytical skills available as the primary motivation for the move.

“Obviously, as it's still a developing country, salaries are likely to be substantially less in the Ukraine, but this is not the only issue," says Rajeena Brar, consultant at IT think-tank Pierre Audoin Consultants. "It allows them to make better use of a global delivery model and there's also a huge pool of innovative IT talent in Eastern Europe that banks are keen to gain access to."

Source: efinancialcareers.co.uk

Thursday, June 24, 2010

B2BITS launches a replacement program for FIX, FIXML, and FAST enabled software

B2BITS, EPAM Systems’ Capital Markets Competency Center providing technology for FIX connectivity, announces the launch of a program to support the large base of commercial, in-house developed, and open source FIX solution users who are seeking to improve their operational capacity and lower costs by upgrading their existing Java, .NET and C++ based connectivity tools to modern solutions.


Tuesday, June 22, 2010

Russia Information Technology Report Released

Within the overall current Russian economic pickup, analysts particularly single out Russia’s technology sector and appropriate it one of the leading roles in establishing the favorable business landscape. The latest “Russia Information Technology Report Q2 2010” testifies that the Russian IT market is expected to recover in 2010 from a double-digit contraction in spending on IT products and services suffered in the generically tough 2009.

Below we highlight some extracts from the report touching upon the market segments of IT services and offshore software development. Russia continues to gain momentum and emerges as a strong rival on the global arena.

Software

Russia’s domestic software market is projected at around US$3.1bn in 2010. Spending on software is forecast to return to positive growth territory, after demand was hit in 2009 by the much sharper decline in PC sales. Going forward, the market is projected to grow at a CAGR of 15% to US$5.3bn by 2014, making Russia potentially one of the most significant global software market opportunities.

The domestic software market is forecast at around US$3.1bn in 2009. There are, unsurprisingly, regional disparities, with Moscow some way ahead of its closest rival St Petersburg in terms of enterprise resource planning (ERP) deployments.

IT Services

The IT services market is projected value of US$3.8bn in 2010, which will represent some recovery from 2009 when the market experienced a sharp contraction. The IT services opportunity is forecast to grow to around US$7.2bn by 2014 as the IT market gradually recovers from recent external shocks. The broader use of ICT in government and other sectors will ensure an upward market trajectory in the medium term. Systems integration is the largest IT services component, with as much as one-third of segment revenues and, together with implementation of hardware and software, probably account for about half of all IT services. However, more value-added services such as consulting and applications development are growing fast. Outsourcing is also on the rise, although below the levels in some other Central and Eastern European (CEE) countries.

Source: Companies and Markets

Monday, June 14, 2010

Barclays Capital to build global technology facility in Kyiv to create Ukraine’s largest and most secure technology centre

Barclays Capital, the investment banking division of Barclays Bank PLC, announced today it has chosen Kyiv as the location for its third global technology centre, adding to those already established in Singapore and Prague. EPAM Systems, the largest and most experience software engineering services provider in Eastern Europe, has been selected as the partner to build and operate Ukraine’s most advanced and secure IT facility, with a team of up to 500 IT professionals in Kyiv by the end of 2012.

Ukraine was chosen because of the exceptional local technical talent and strong analytical skills available. This investment in Kyiv allows Barclays Capital to further diversify its workforce locations and the firm will grow globally by 800 IT professionals in 2010 with continued growth anticipated over the coming years.

“Kyiv is a key strategic centre within our technology growth plans going forward. Utilising the most advanced hardware, software tools and security infrastructure available, the Kyiv centre will be at the leading edge of global competitiveness for quality and for innovation. We are exceedingly impressed with the 50 plus engineers that have already started,” said Sarah Grave, Head of IT EMEA, Prague and Kyiv at Barclays Capital.

The teams will focus on Application Development for in-house projects in C++, Java or C# for a wide range of business applications across the bank, ranging from electronic trading applications to risk management systems. The Kyiv facility has been built by EPAM to operate within the bank’s highly secure continuous service environment, providing 24/7 services to maintain business applications and provide support to the firm’s business users for many mission critical applications.

Barclays Capital and EPAM are investing in Kyiv for the long term, with the technology centre not only providing excellent working conditions, but very clear long-term career paths for the team members in product and application development, management, operation, support, and testing software. Russia along with Ukraine are the two leaders in the CEE region in terms of a number of annual IT graduates and steady rise in the popularity of IT jobs.

“The Kyiv centre will provide the essential front-line services necessary for the operation of Barclays Capital’s global banking business,” said Karl Robb, President EPAM Europe. “This reflects our client’s strong faith in Ukrainian IT talent and in EPAM Systems proven track record of establishing large software engineering teams operating in highly secure environments to the world’s top technology firms and financial institutions.”

Through EPAM, Barclays Capital will make an initial capital investment of more than US$2 million in the highest standard of technology infrastructure from Hewlett Packard, Cisco and Microsoft among others, creating the most secure and state-of-the-art facility in the Ukraine, within EPAM’s premises. The very latest workstation and network equipment will be deployed along with power equipment providing business continuity to operate 24/7.


Notes for Editors
For further information please contact:
Jon Laycock, Barclays Capital Communications +44 207 773 4324 jon.laycock@barcap.com