Infosys posts highest employee addition in 4 years

Infosys made a gross addition of 15,352 people in the quarter.

BANGALORE: Infosys made a gross addition of 15,352 people in the quarter, and a net addition of 8,262 people, taking the total headcount to 1,41,822. The net addition was its highest quarterly addition in at least four years.

The company expressed confidence that it would meet its previous forecast of adding 45,000 people during the fiscal.

The attrition rate has fallen to 15.6% from 17.1% in the same quarter the previous year. Analysts say that this is perhaps driven by people choosing not to swap jobs in uncertain times.

The quarter reported a utilization of 77.3%, up from the preceding quarter, but lower than what it was a year ago. "The hiring number indicates that the company sees strong growth ahead despite economic uncertainty. Whether this assumption is right or wrong, we have to wait and see," said Ankur Rudra, sector analyst with Ambit Capital. 

Mobile spam texts hit 4.5bn in india

illian Brockell got so fed up with unsolicited text messages from a single spammer on her mobile phone that in a fit of frustration she called the sender back -- 20 times.

Turning the tables on the spammer in early April felt "satisfying," she said. Still, it hasn't stanched the flood.

"I don't even get that much junk mail in my Gmail account," said Brockell, a 31-year-old journalist who lives in Washington, DC. "This is my phone. It seems more personal."

The unwelcome messages that have been clogging e-mail inboxes for two decades have made the jump to handsets, as more people use smartphones in place of personal computers and texting becomes more popular. The number of US spam text messages rose 45 per cent last year to 4.5 billion messages, said Richi Jennings, an industry analyst. Spam phone calls also are proliferating. The surge is costing carriers money and frustrating users, who must pay for the messages and deal with potentially fraudulent texts.

Spammers can get phone numbers from the internet, or use software or websites to randomly generate thousands or even millions of numbers in a particular area code. Often using prepaid phones that can't be traced back to the sender, they can then use auto-dialing technology to reach recipients.

Costs for spammers are extremely low. Unlimited texting for a prepaid phone costs about $20 per month and can be used to spam millions of people. Yet for wireless customers without a texting plan, the cost of receiving constant spams can add up quickly. The typical fee is 20 cents per received text.

'Volume of abuse'
"Bad actors will go to the biggest installed base worldwide," Greg Goldfarb, a managing director at Summit Partners, which manages more than $10 billion in assets, said in an interview. "The volume of abuse that comes to people around me has increased 50 times in the last 18 months."

The spam messages can promise free Apple iPads, or claim the consumer won a $1,000 gift card at Wal-Mart Stores Inc or Best Buy Co, according to SMSWatchDog.com, which lists spam reports. Clicking on links can install malware that collects information from the phone. Responding can also authorize charges to the subscriber's mobile bill.

For wireless-service providers such as AT&T, Verizon Wireless and Sprint Nextel, texting is an important source of profits. Still, they are concerned about the escalation of spam texts. As users contact customer-service lines to fight fraudulent text-related charges to their phone bills, carriers may be spending $5 to $50 per spam text complaint, Goldfarb said.

Federal cases
In response, carriers and the US Federal Trade Commission have brought suits against at least three large-scale spammers, including an FTC suit that was settled last year. The FTC charged the spammer with transmitting at least 5 million unsolicited text messages to promote products such as loan- modification programs and debt-relief services. According to the suit, the spammer sent out text messages at a rate of 85 per minute, 24 hours a day.

Last year, the Federal Trade Commission received 2,600 complaints about mobile texts, about the same number as in 2010, said Christine Todaro, an attorney with the agency. Recently, the FTC Bureau of Consumer Protection created a special team to conduct investigations related to mobile issues, she said. In a lawsuit filed in March, AT&T claimed that spammers using 14 phone numbers made more than 20 million illegal phone calls to its and other carriers' subscribers.

Anti-spam software
The carriers also are collaborating on a new anti-spam effort that will be unveiled this year, said David Diggs, a vice president at wireless-industry group CTIA. They're also likely to sink billions into anti-spam and mobile-security software, said Goldfarb, whose company is ramping up investments in mobile-security companies.

"I think the market is going to be much larger than traditional e-mail security or PC security," Goldfarb said in an interview. "The mobile-security threat is far more severe," because of the greater number of devices involved, he said.

Hackers in the past had more often sought out financial transaction information, account and credit-card numbers on personal computers. Now they're searching for the same information on smartphones, whose sales exceed those of PCs.

One in five Americans used a mobile phone for banking in the 12 months ended in January, according to a Federal Reserve Board survey of almost 2,000 consumers.

"You have to follow the money, where the most sensitive data is being used," said Melissa Siems, senior director of mobile marketing at Intel Corp's McAfee unit. McAfee Mobile Security software scans applications consumers download on their smartphones to flag fraudulent ones, which might access your contacts and send them spam text messages. Last year, Google removed a number of malicious programs from its mobile app store.

Acquisition candidates
As carriers build their arsenals of anti-spam tools, it may offer a revenue opportunity for equipment suppliers including Cisco Systems and Juniper Networks. The equipment makers may seek to acquire or invest in startups with mobile anti-spam technologies in the next few years, said Jeff Wilson, principal security analyst at consulting firm Infonetics Research.

One possible acquisition target is Cloudmark, a San Francisco-based startup and an investment of Summit's, which already sells mobile anti-spam software to the top four U.S. wireless carriers.

"There's an opportunity for consolidation," Wilson said. "Many companies want to have the expertise in-house. Everyone is trying to get the mobile carrier money."

Trai: One paisa per second plan mandatory

ARTICLE BY GOWTHAM

NEW DELHI: The Telecom Regulatory Authority of India (TRAI) has asked all service providers to ensure that they offer their customers a tariff plan of one paisa per second along with other offerings.

The regulator in a tariff amendment order said it had become "mandatory" for service providers to offer in each service area at least one tariff plan each for both postpaid and prepaid subscriber with a uniform pulse rate of 'one second'.

"The service providers will be at liberty to offer alternative tariff plans with any pulse rate within the overall ceiling of 25 tariff plans," TRAI said in a statement.

The rates for premium rate services currently levied by service providers are substantially higher as compared to the normal tariff applicable for a two-way communication due to the fact that the charges levied also include the price for content.

Keeping in view the fact that calls and SMS made for participating in competition and voting hardly contain any content, TRAI's Telecommunication Tariff (Fifty First Amendment) Order 2012 also mandated that tariff for such calls and SMS shall not exceed four times of the applicable local call or SMS charges.

The amendment also provides flexibility to service providers to apply revision in international long distance tariff uniformly for new as well as existing subscribers.

TRAI had issued a consultation paper in October last year on "Certain issues relating to Telecom Tariff" seeking views of stakeholders.

Most of the operators opposed when asked if one standard plan for all service providers particularly for a prepaid subscriber would be relevant in the present scenario of Indian telecom market.

The regulator has also retained the existing cap of 25 tariff plans that can be offered by access service providers including post-paid and pre-paid.

i phone 4s:security hole found

NEW DELHI: Apple iPhone 4S's most-talked about feature Siri is facing criticism for a default security setting that can leave the device vulnerable.

According to Sophos, even if a user's iPhone 4Sis locked with a passcode, an unauthorised user can press the button and give a spoken command to Siri, like ask it to send emails or tamper with your calendar.

However, Sophos has also suggested a way to disable Siri when the device is locked. To disable the feature, a user needs to press enter "Settings/General/Passcode Lock" on his iPhone 4S, and set the "Siri" option to "Off".

Siri is the voice-activated personal assistant that comes with the new iPhone 4S. With the launch of iPhone 4S on Oct 14, Siri became an instant hit with users scrambling to activate the feature and facing a host of connectivity troubles.

Siri lets users perform tasks like asking for a weather update anywhere in the world, or setting an alarm, or asking for places to eat, or making a calendar appointment.

According to Apple, the feature is based on artificial intelligence technology that the company got from its acquisition of a company called Siri. 

New industrial virus Duqu on prowl

WASHINGTON: First there was the Stuxnetcomputer virus that wreaked havoc on Iran's nuclear program. Now comes "Duqu," which researchers said appears to be quite similar.

Security software firm Symantec said in a report it was alerted by a research lab with international connections last week to a malicious code that "appeared to be very similar to Stuxnet." It was named Duqu because it creates files with "DQ" in the prefix.

The US Department of Homeland Security said it was aware of the reports and was taking action.

"DHS' Industrial Control Systems Cyber Emergency Response Team has issued a public alert and will continue working with the cyber security research community to gather and analyze data and disseminate further information to our critical infrastructure partners as it becomes available," a DHS official said.

Symantec said samples recovered from computer systems in Europe and a detailed report from the unnamed research lab confirmed the new threat was similar to Stuxnet.

"Parts of Duqu are nearly identical to Stuxnet, but with a completely different purpose," Symantec said. "Duqu is essentially the precursor to a future Stuxnet-like attack."

Stuxnet is a malicious software that targets widely used industrial control systems built by German firm Siemens. It is believed to have crippled centrifuges Iran uses to enrich uranium for what the United States and some European nations have charged is a covert nuclear weapons program.

Cyber experts say its sophistication indicates that Stuxnet was produced possibly by the United States or Israel.

The new Duqu computer virus is designed to gather data from industrial control system manufacturers to make it easier to launch an attack in the future by capturing information including keystrokes.

"The attackers are looking for information such as design documents that could help them mount a future attack on an industrial control facility," Symantec said.

"Duqu does not contain any code related to industrial control systems and is primarily a remote access Trojan (RAT)," Symantec said. "The threat does not self-replicate."

Duqu shares "a great deal of code with Stuxnet" but instead of being designed to sabotage an industrial control system, the new virus is designed to gain remote access capabilities.

"The creators of Duqu had access to the source code of Stuxnet," Symantec said.

Infosys posts highest employee addition in 4 years

Infosys made a gross addition of 15,352 people in the quarter.

BANGALORE: Infosys made a gross addition of 15,352 people in the quarter, and a net addition of 8,262 people, taking the total headcount to 1,41,822. The net addition was its highest quarterly addition in at least four years.

The company expressed confidence that it would meet its previous forecast of adding 45,000 people during the fiscal.

The attrition rate has fallen to 15.6% from 17.1% in the same quarter the previous year. Analysts say that this is perhaps driven by people choosing not to swap jobs in uncertain times.

The quarter reported a utilization of 77.3%, up from the preceding quarter, but lower than what it was a year ago. "The hiring number indicates that the company sees strong growth ahead despite economic uncertainty. Whether this assumption is right or wrong, we have to wait and see," said Ankur Rudra, sector analyst with Ambit Capital. 

Little demand for MNP in India: Syniverse Technologies

Mobile number portability in India failed to have a major impact here because there was very little pent up demand for it when compared to other countries.

NEW DELHI: Syniverse Technologies, the US-based company that provides business solutions to telcos, and is one of the two firms implementingmobile number portability in India, says this facility failed to have a major impact here because there was very little pent up demand for it when compared to other countries.

"There was not even an initial spike for mobile number portability since factors that cause people to shift operators - high call charges, low competition, being tied down to an operator on contract - all did not exist here," Syniverse global CEO Jeffery Gordon told ET in an interaction.

"My personal theory (for the low response to MNP) is that the market was already very competitive and almost all customers are on the pre-paid platform," he said, while adding that Indian cellular market was constantly maintaining a port rate of around 4%.

Mobile number portability, the facility that allows customers to retain their cellphone number while switching operators, was first introduced in Haryana in November 2010 and then extended to all parts of the country in January this year.

As per data complied by the telecom regulator, about 13 million of the 850 million connections in the country have opted for this facility so far with maximum number of porting requests having come from Gujarat (1.3 million) followed by Maharashtra (1.03 million).

According to the Syniverse chief executive, returns on their investments towards implementing MNP in India have been 'lower than what they had hoped' due to low port rates. But Gordon said that winning the contract had its set of positives as it provided Syniverse the opportunity to work with every mobile phone company in India who were prospective clients for its business solutions.

The Syniverse CEO is in India as the company is hosting a private workshop here designed to help operators optimise their existing networks, transition to 3G, and prepare for LTE, 4G and beyond. Globally, the company has about 1,500 employees, a fifth of which are in its technical centre in Bangalore.

"Over the next three years, India will be one of the top countries in terms of revenue mobilisation," Gordon said. But he declined to reveal figures when asked as to what percent of the company's revenues were from India.

He also cautioned that with a mere 5 MHz or units of 3G airwaves, the life-cycle for this high-end service would get saturated very quickly. "India is therefore one place in the world where even 4G networks can get filled up pretty quickly if you have devices for it," Gordon added.

Syniverse had been acquired by Carlyle Group for about $2.6 billion last year, and mobile service provider itself has a history of acquisitions. Asked on its plans to acquire smaller mobile services technology firms in India, Gordon admitted such opportunities existed here, but warned that further clarity was needed in the country's tax laws. "Some very important cases in the M&A space have to clear up. We want clarity on the tax front and we are learning," he added. 

HTML5 may steal mobile apps thunder

ARTICLE BY GOWTHAM

Smartphones powered by Apple and Google operate using hundreds of thousands of highly specialized Web programs.

NEW YORK: Smartphones powered by Apple andGoogle operate using hundreds of thousands of highly specialized Web programs.

That's what has allowed the two firms to lock up most of the premium cellphone market. Yet a new Web standard, called HTML5, is gaining traction and buzz, not least because its biggest supporters say it will allow a bit of an end-run around these walled gardens.

In general, Web browsers on phones haven't been ideal for accessing content. Only programs installed directly on gadgets have taken full advantage of handsets' address books or knowledge of a users' location. So these applications, or apps, caught on and set off virtuous cycles, attracting both users and developers to the iPhone and Android operating systems.

But consumers would be better off if they could switch phones easily. And developers don't relish having to make multiple versions of the same programs just so they can run on competing phones. Content providers also don't like how app stores typically take a percentage of any revenue they charge. Finally, websites like Facebook don't want Apple or Google acting as gatekeepers.

This is where HTML5 comes in. The newest version of the core language for presenting content on the Web is still in development, but bits are emerging. It's gradually leveling the playing field, making it so new browsers can do many things only apps currently do well, such as location-based services. And developers like the idea of making one program that runs across many devices. As a result, some 2.1 billion mobile devices are expected to use HTML5 browsers by 2016, reckons ABI Research.

So does that suggest an imminent up-ending to the tech world, as Roger McNamee, partner in venture capital firm Elevation Partners, recently claimed? Not quite. Some functions, like games, will still be done better via apps than Web browsers. Moreover, with Apple and Google members of the consortium promoting the standard, they presumably see a benefit from pushing it.

The reigning smartphone barons may lose some ability to lock users in. But both have a long-term interest in encouraging the most rapid adoption of next-generation mobile devices possible. That should translate into more sales for Apple and advertising for Google. And, anyway, by the time the standard fully catches on -- say in five years -- they will probably have sewn up the whole market anyway. 

UK call centre staff told to move to Mumbai to save jobs

ARTICLE BY GOWTHAM

A minister in the David Cameron government has sparked a row by suggesting that Newcastle-based call centre workers who have lost their jobs should relocate to Mumbai.

LONDON:" A minister in the David Camerongovernment has sparked a row by suggesting that Newcastle-based call centre workers who have lost their jobs should relocate to Mumbai.

Rail minister Theresa Villiers appears to tell sacked call-centre workers in Newcastle to relocate to Mumbai in a letter written to Berwick MP Sir Alan Beith.

The opposition Labour party and the unions have described the prospect of staff from north-east England being asked to move 5,000 miles to do the same job in India as "unhinged and unpatriotic".

The row follows the closure of Baron House, a former East Coast passenger call centre, which resulted in the loss of nearly 200 jobs and delivered a major blow to the region's struggling economy, The Independent reported today.

A review of public contracts by the newly-nationalised rail operator meant the existing provider,National Express, missed out to two other companies, one of which, Intelenet ( UK) has operations in Plymouth and Mumbai.

A third of those jobs have now been reportedly exported to India while the rest have been divided between centres in Wolverhampton and Devon.

Villiers sought to reassure Beith that under Transfer of Undertakings (Protection of Employment) Regulations (TUPE), their future was secure. She said: "These staff will be given the opportunity to transfer to the new service providers under TUPE where those services are to continue.

"Staff who are unable to move to the new location will be offered a voluntary redundancy package or alternatives roles within East Coast, where available."

Maria Eagle, Labour's shadow Secretary of State for Transport, dismissed the suggestion as adding "insult to injury". She said: "The buck must stop with Theresa Villiers and her fellow ministers in this Tory-led Government.

"They should be offering support for those who risk losing their jobs rather than making ridiculous suggestions that they move to India." 

A Department for Transport spokesman said: "National Express Services Ltd staff employed at Baron House will be given the opportunity to transfer to the new service provider under TUPE. Exactly how this works will be a matter for the new service provider."

Indian IT cos confident of withstanding downturn PTI

ARTICLE BY GOWTHAM
Even though industries across the country have expressed concerns over the debt crisis in the US, aggravated after the downgrading of its sovereign rating by S&P, Indian IT industry remains confident of withstanding another downturn.

While most agree that there are fears of another recession in the US and a debt crisis in Europe, they also feel it is still early days to know what is coming.

Country's second largest software exporter Infosys CEO and MD Kris Gopalakrishnan says, "It is too early to say. There are fears of another recession in the US and a debt crisis in Europe.

"We were able to react very quickly in the past (2008) when the recession happened. These responses are still fresh in our memory and I believe that the industry will be able to withstand another downturn."

The US accounts for almost 60 per cent of the revenues for the $60 billion Indian IT industry.

Leading industry chambers like CII, FICCI, Assocham and FIEO, which represent companies across the country, have expressed concerns over events in the US economy.

The Federation of Indian Exporters Organisations ((FIEO) chief Ramu Deora said, "The downgrading will lead to further appreciation of rupee against the US dollar which is already facing the heat, thereby blunting our competitive edge.

"The US Government will have to increase taxes to bring in more people under the tax net to curtail its deficit which will further shrink their disposable incomes and may have an impact on India's exports to North America."

He added, "Our worst fear that exports and fourth quarter (economic growth) will be affected may come true."

While most IT companies have expressed caution in the past few months on the European debt crisis and high unemployment in the US, they also remain confident of being able to maintain their growth momentum.

Leading players like TCS and HCL Technologies have posted stellar growth numbers in the past few quarters on the back of steady demand for outsourcing services.

"We think the environment is good in spite of the macro economic uncertainty in different parts of the world.

"Some of the countries are failing in Europe and there is the issue of unemployment in the US, but still I think customers are going with their plans as they had originally intended," said N Chandrasekaran, CEO and MD of country's largest software exporter TCS.

Industry analysts say the companies are watching the situation.

"It is still early to hit the panic button. Companies continue to outsource as they look at multiple factors like operational and cost efficiency. The deal pipeline for most firms seems to be strong and so, companies are confident," they added.

US markets tumble, FICCI says India may benefit from crisis

ARTICLE BY GOWTHAM

NEW YORK/NEW DELHI: The euro extended losses against the US dollar on Monday, hitting a session low as Wall Street stocks tumbled in the first session following Standard & Poor's downgrade of the US debt rating late Friday.

All major US indices tumbled at the open. The euro fell as low as $1.4148, according to Reuters data. It was last at $1.4178, down 0.7 per cent on the day.

The euro was already under pressure as initial relief over European Central Bank purchases of Spanish and Italian government bonds petered out and risk aversion took hold.

Traders said the ECB bought Spanish and Italian debt early in the European session after it said on Sunday it would "actively implement" its bond-buying program.

US crisis to benefit India

India will be impacted in the short term because of the US sovereign debt crisis, but it will also benefit from the economic turmoil as softening crude prices will bring down inflation, prompting the Reserve Bank of India (RBI) not to hike rates, a leading industry lobby said Monday.

"One positive fallout of the rating downgrade, we feel, could be the Indian market perception that a possible decline in crude prices may signal a pause in RBI rate hikes, buoying investor sentiments," the Federation of Indian Chambers of Commerce and Industry (FICCI) said in a statement.

"Additionally, the spreads between a US sovereign and Indian sovereign paper of comparable duration may decline, thus acting as an enabler to foreign institutional investors inflows into the country. This may have a sobering impact on the current account deficit, even though this may not be exactly desirable."

Global stock markets continued to fall Monday after top credit rating agency Standard and Poor's downgraded the US sovereign debt rating last Friday and cautioned of a further downgrade if the fiscal position of the country did not improve.

As far as the impact of the crisis on the Indian economy, FICCI said some short-term impact would be seen in terms of market uncertainties.

"An uncertain global environment could, however, depress India's exposure to global markets (exports of goods and services, more than a quarter of India's GDP) and knock off percentage points from India's GDP growth," the industry lobby said while outlining some of the risks.

Android leads mobile OS market in US: Report

ARTICLE BY GOWTHAM

According to a report by research firm Nielsen, Android is the leading mobile operating software in the US with 39% market share. The second position is occupied by iOS that powers iPhone. It has a market share of 28% whileBlackBerry OS is at third position with 20% share.

Nielsen says data collected for June shows that among the smartphone makers using Android,HTC has the leading position with 14% market share, followed by Motorola at 11% and Samsungat 8%. Windows Phone 7 has a market share of 9%.

In terms of handset makers, Apple, which is the only company making iPhone, leads with 28% market share. RIM, the maker of BlackBerry phones, and HTC are in second position with each one holding 20% market share.

Nokia, which is still the market leader in worldwide smartphone market, holds just 2% market share in the US. Hewlett Packard, which is trying to gain foothold in the market with WebOS, too holds 2% share.

Due to competition among smartphone manufacturers, prices of Android handsets have come down sharply, leading to a phenomenal growth in their sales. A few weeks ago, Google had claimed that it was activating 5.5 lakh Android phones every day.

Google aims to speed up the internet

ARTICLE BY GOWTHAM

NEW DELHI: Google has unveiled Page Speed, a service that will allow it to load web pages faster for end users. According to Ram Ramani, the lead engineer on the Google's Bangalore team that worked on the project, websites using Page Speed will see a speed improvement of 25% to 60%.

"To use the service, you (webmasters) need to sign up and point the site's DNS entry to Google," Ramani wrote in a post on Google's official blog. "Page Speed fetches content from your servers, rewrites your pages by applying web performance best practices, and serves them to end users via Google's servers across the globe. Your users will continue to access your site just as they did before, only with faster load times."

Though Google is offering the service free of charge to a select number of webmasters initially, it will charge a fee once it launches the service. According to Ramani, the Web giant is working to speed up site load times for the last two years and the latest project is another step towards enabling faster browsing. Google claims that the optimization will happen in the real time.

With the importance of the web growing, many companies are aiming to deliver better Web browsing experience. In recent years, all browser makers have put in a lot of efforts to speed up page rendering. Opera Mini, a browser for portable devices, uses its own servers to compress data before serving it on smartphones and tablets. Opera claims this optimization helps it offer a superior and faster Web browsing to experience to mobile users.

Companies like Amazon and Akamai, meanwhile, offer services like content delivery network (CDN) that can speed up data distribution. Many websites rely on these services. According to reports, Page Speed will make of both website optimization as well as a CDN.

Apple is richer than US govt

ARTICLE BY GOWTHAM

NEW YORK: As of today, Apple boss Steve Jobs is richer than Uncle Sam.

While the world's most powerful government has just $73.76 billion in its reserves, the world's top technology company has a neat cash pile of $75.87 billion.

The US Treasury Department warned that it has now only this much operating budget as Republicans and Democrats fight over raising the nation's debt ceiling. With only that much reserve at its disposal, the Obama White House has warned the Republicans that the US government won't be able to meet its obligations as of Aug 2.

Facing a government default, Obama can definitely turn to Steve Jobs to give him a very brief breathing space. The failure by the Republicans and Democrats to come to a compromise to raise the current $14.3 trillion debt ceiling by Aug 2 could lead to a hike in interest rates. The already battered dollar may also plunge further.

With its market capitalisation of $363.25 billion, Apple is the second largest company on the planet after American oil giant Exxon Mobil. The Cupertino-based Apple started rising suddenly in 2007 when it entered the smartphone market with the launch of its first version of the iPhone.

Within three years, Apple went on to overhaul BlackBerry company Research In Motion (RIM) which invented the smartphone and dominated the market. But its fortunes skyrocketed last year with the launch of the iPad tablet which has sold in millions. In fact, the iPhone and the iPad have made Apple the czar of mobile computing technology as rivals play up catch-up.

The stock of the company, which doesn't pay dividends, has now touched $400. After Apple, another non-financial company sitting on a huge cash reserve is Microsoft whose own pile is about $40 billion.

Dell's service business: Threat to Indian offshoring cos

ARTICLE BY GOWTHAMIn many ways, Dell - the world's
second biggest computer maker
-- is undergoing a shift very
similar to IBM's transformation
from hardware and products to
the lucrative services and
outsourcing business during the
nineties.
At $8 billion, Dell's services
business is a 'start up' that not
only threatens to snatch share
away from established
multinationals likeIBM and HP,
but also poses tough questions
for India's growingoffshoring
firms, scrambling to flesh out the
next model for outsourcing.
In an exclusive interview with
ET's Pankaj Mishra & Shruti
Sabharwal, Brian T Gladden, Dell's
chief financial officer, discusses
the pros and cons of being a
listed company, how
protectionism can harm
America's competitiveness and
says that the US government
plans to tax overseas profits
could discourage investments in
the country.
Would it be easier to change
your bets, transform to newer
businesses if Dell was not a
listed company? Is too much
quarterly scrutiny by
demanding investors slowing
things down for technology
companies?
It is very important that as a
leader you have to balance short-
term orientation and focus with
long-term investments and
strategy. You can't be solely
focused on making earnings per
share every quarter as the
number one priority and I think
there are times when you need
to make sure you are making
longer-term bets and
investments.
And our company has entered a
phase of development where I
think that it is very important
that we make pretty broad
investments and they don't
necessarily help in the short term
and we have to explain that to
our investors and be very clear
that we are changing the
company. There are investments
that may not benefit the firm this
quarter or the next.
And as a leader that has been a
change. As regards quarterly
scrutiny, I think there are positive
elements of that rhythm in
governance and ultimately
providing some level of
performance that can be
benchmarked against peers. We
can measure our performance
quarter by quarter to see how
we are doing versus anHewlett-
Packard or IBM or other
companies.
But that can also be a double
edged sword?
Oh absolutely. You can get overly
focused on that so that's why we
have to keep taking a step back
and say are we making any
investments that are going to
change the company for the
future.
That's a big part of what I do,
making sure that we are trying
to deliver that balance. How to
deliver on results today and
execute on commitments but
also make long term-changes.
And that's an important balance.
With increasing cash piles,
there is also a pressure to
spend it, or reward investors in
some ways. Does more cash
encourage risk taking, or it
makes companies more
conservative?
Michael Dell keeps a healthy
tension around creative new
ideas getting into the system.
And I think part of my role is to
balance that and make sure that
they make sense and that they
return reasonable economic
profit and that there is some risk
management around these
things.
Michael has recently been
spending time talking about how
we need to take more risk with
our teams internally. One of our
priorities is to elevate new ideas
and to try some different things.
We have got good financial
success, we have some great
cash flows, and we have got $15
billion of cash in the company
end of first quarter. So, we can
take some risk, we can take
some swings and try some
different things. But it has to be
within the context of delivering a
return on our overall investment.
How do you balance this risk
taking which is crucial in the
technology industry, with your
goals of not giving up to a rival?
Well, I think you have to start by
realising that not all risk is bad
risk. The goal is not to avoid risk,
but to manage it.
So, it comes back to balancing --
there is that amount of capital
that we are willing to put aside
and say lets take some risk with
it and then there is that core set
of investments that is less risky
and less different, more adjacent
to what we do and we have
some confidence in that.
For instance, we have built a
storage business with
acquisitions that is very
successful. It is a $2 billion
business right now. We feel it
can go to $4-5 billion in the next
three years.
That is the space where we have
proven we can win and that is a
place where we are willing to
make some investments and
make a more aggressive play
because we have had success.
There may be some other areas
where we have less capability
and one area I would like to
highlight and that we keep
working on is building on our
software capability. So less
success there means more risk
and we have to be more careful.
But we should not be afraid of
that, we have to go deal with
that. In a more metered and
balanced way we will go after
that.
Corporate governance is
another area of scrutiny by
investors and experts when it
comes to technology firms. Dell
had to restate its accounts few
years ago because of some
irregularities. What lessons
have you learnt?
I would say simply that if you are
going to grow very fast, you
need to make sure you are
making investments along the
way to provide stable
infrastructure. In many cases if
the company is growing so fast
that you can't build processes to
support it, that's when you get
into trouble.
I think sometimes growth needs
to be deliberately managed and
investments need to be made
along the way, I think those are
fundamental lessons that the
company needed to learn.
There are other things we need
to work on and improve and we
have done all that. We have made
some pretty significant
investments in IT, in talentand
we feel good about where we
are.
How much should we be
reading into the macro
economic worries, what does it
mean for the outsourcing
business?
I think there is a big economic
cloud right now. If you see the
US economy, it's a bit
challenging.
There are plenty of signs that
there are some challenging
dynamics in the US and until they
get clarity on the deficit issues,
put the debt ceiling behind them,
customers in some cases are
being a bit negative around
making investments. But I would
also say there is still good
demand growth.
Even in the federal government,
productivity becomes a primary
initiative. As long as technology
can bring productivity they are
big priorities for governments.
So, we feel good about that, we
are well positioned with
governments to do that.
How much will stubbornly high
unemployment play a role in
regulations around taxes and
immigration?
There is no question that the
recovery around the real estate
market in the US and other parts
of the world and unemployment
are long-term challenges and the
government in the US needs to
make some pretty fundamental
changes to encourage US
competitiveness and
employment.
Some of these things are
happening. But today they are
caught up in this debt ceiling
debate and not addressing these
issues. The corporate tax rate in
the US is way too high and the
government needs to talk about
that and not something silly like
the debt ceiling.
These are not going to change
overnight and you are not going
to see some dramatic decrease in
unemployment. The data I saw
most recently shows to get back
to 5% unemployment is going to
take another 13 years.
Every time there is political
rhetoric the government starts
talking about deferred tax,
overseas profits. What is your
take on that because it gets
linked back to unemployment
etc?
Well I would go back to US
competitiveness. It's a global
business; we have got a large
population of employees in the
US and more people outside the
US. There needs to be stability in
the political regulatory
environment for us to make
more investments in the US.
Japan is taking down their
corporate tax rate this year and
the US will have the highest
corporate tax rate in the world.
That is a disincentive to invest in
the US. I have been active, our
industry has been active in trying
to communicate to the policy
makers that they need to address
the corporate tax policy. Until
they focus energy around that.
There are US competitiveness
issues around tax and there are
labour issues. There are issues
with healthcare costs, issues
with the right incentives around
innovations and research and
development. Unless US
policymakers focus around these
and make them simple and easy
like it is inIndia or Singapore.
There is a challenge there.

Taliban: Phones, email, website hacked

ARTICLE BY GOWTHAM

KABUL: The war in Afghanistan enteredcyberspace when the tech-savvy Taliban said their phones, email and website had been hacked to spread a false report that the movement's spiritual leader, Mullah Omar, was dead.

Although the Islamist group banned television during its time in power between 1996 and 2001, its communication strategy in the decade-long war now includes a website, mobile phone text messages, emails and posts on Twitter andFacebook.

The Taliban -- ousted by US-backed Afghan forces for harbouring al Qaeda militants blamed for the September 11 attacks on the United States -- regularly promote their attacks, opinions or exploits online in a publicity war with the West.

Pakistani author and Taliban expert Ahmed Rashid said that, prior to 2001, the Taliban's "media reach to the Afghan people and the world had been virtually zero and totally ineffective".

"They learnt quickly that the war against the Americans had to be fought on many fronts," he said.

The online proficiency of the Taliban could be attributed to an influx of younger recruits during the past decade, said Thomas Ruttig, co-director of the Afghanistan Analysts Network, but he said the overall strategy was not new.

"Islamists, even the early modernist and non-violent ones like Sayed Jamaluddin Afghani or the Egyptian Muhammad Abdu, have always suggested to use Western advanced technology to overcome the West's domination," he said.

"That's not much different from today's Taliban." The Taliban are paranoid that modern technology will betray hiding places. They have threatened to attack mobile phone operators' towers and offices if networks aren't shut down at night, when they fear foreign troops could track them down.

Hacking inquiry 
The cyber attack on Wednesday again sparked Taliban threats of revenge against the telephone network providers. They blamed "American intelligence" and accused a "cunning enemy" of committing "technical larceny".

A spokeswoman for NATO-led troops in Afghanistan said they had no information about the incident.

The Taliban regularly change the addresses of their websites, and website addresses are often corrupt or link to other websites such as dating or online shopping sites.

A "security encyclopaedia" for Islamist militants posted online several years ago -- and translated by the U.S.-based SITE institute -- urged strict precautions when using mobile phones, warning that Mullah Omar had come close to being assassinated after his phone signal gave away his whereabouts.

The Taliban is also concerned about Afghans using mobile phones to pass on information to foreign and government troops.

In the Panjwai district of southern Kandahar province recently, villagers in rural areas where the Taliban are still influential said insurgents had started smashing mobile telephones found on people outside their homes. Villagers said phones found at homes by insurgents were not destroyed.

Now it has to be on alert against cyber attacks. Mullah Omar was the second false high-profile death this week blamed on hacking. On Monday, the website of Britain's The Sun newspaper was hacked and a fake report posted that media mogul Rupert Murdoch had been found dead in his garden.

And just as the British parliament is investigating claims of phone hacking by Murdoch's News of the World newspaper, the Taliban said their Information and Cultural Commission has started an inquiry into how its communications were hacked.

The NATO-led International Security Assistance Force declined to comment on the Taliban allegation.

Samsung launches new Galaxy Tab

ARTICLE BY GOWTHAM


SEOUL: Samsung Electronics Co launched a thinner and lighter version of its Galaxy tablet in its lucrative home market, trying to halt the runaway success of Apple Inc's iPad.

The Galaxy Tab 10.1 is an upgraded version of the 7-inch Tab introduced in October.

Blockbuster iPad sales announced by Apple Tuesday underscore the challenge for the South Korean company.

Apple sold 14 million iPads in the first half of the year, compared with analysts' sales estimates of about 7.5 million units for the Galaxy Tab over 2011.

"As our smartphone business grew very fast within a very short period of time, I believe it's just a matter of time for our tablet business to improve," J.K. Shin, head of Samsung's mobile division, told reporters.

Samsung is Apple's nearest rival in the booming mobile device industry as it leverages its cost competitiveness and access to chips and core tablet components.

It has sharply narrowed the gap with Apple in the smartphone market, but remains a distant second in the tablet market, which research firm Gartner forecasts will surge to 108 million devices next year from an estimated 70 million in 2011.

"Apple's quarterly results showed again it's indeed the strongest rival to beat. Samsung will have a tough second half due to growing competition from Apple as it is set to introduce a new iPhone," said James Song, an analyst at Daewoo Securities.

Blockbuster sales of the iPhone and iPad again helped Apple crush Wall Street's expectations for its third-quarter results. Apple said Tuesday that concern over iPad 2 supply constraints had eased and demand was still outstripping supply in some markets.

The sale of the Tab in Korea is Samsung's fifth launch after its U.S. debut a month ago and its sales kickoff in Indonesia, where the company says it commands a 65 percent market share. It has also launched the device in Italy and Sweden.

Pricing for the new product, slightly thinner and lighter than the iPad 2, starts from $500 in the U.S. market, the same price as the iPad 2.

Samsung faces the challenge of moving beyond being a hardware company, clever at copying ideas, to becoming more creative and better adept at software at a time when consumer gadgets are getting smarter.

Second-quarter profit at Samsung, the world's largest maker of memory chips and televisions, fell by a quarter as weak earnings at its flat screen unit dragged, overshadowing robust sales from its mobile division.

Samsung reiterated Wednesday it aimed to boost tablet sales by more than five fold this year. It didn't provide specific numbers but analysts expect the company to have sold about 1.5 million units last year.