SEBI asks Raju's brother, 2 others to file replies by Oct 30

MUMBAI: Market regulator SEBI today asked R Rama Raju, brother of Satyam founder B Ramalinga Raju, and two others to reply by end of the month

to the show cause notices issued to them in connection with the multi-crore accounting fraud case in the IT company.

SEBI has also allowed Rama Raju and others, including Vadlamani Srinivas and G Ramakrishna, to inspect the documents available with the regulator on October 14 and has fixed the date for personal hearing on November 7.

Other accused persons, Ramalinga Raju and V S Prabhakara Gupta, had earlier sought adjournment of the hearing.

SEBI allowed the persons involved in the Satyam case to inspect the documents following submissions by the counsels that their clients were in jail and had no access to records of company, necessary for responding to show cause notices issued by the regulator.

While Srinivas was the chief financial officer of the Satyam Computer Services, Ramakrishna functioned as cost accountant. Gupta too has been associated with the company.

SEBI had issued show cause notices to various persons involved in the Satyam fraud case which came to light after admission of fudging of accounts by its disgraced founder Ramalinga Raju in January.

Besides SEBI, the scam is also probed by Serious Fraud Investigation Office and CBI.

IT pricing models based on outcome & utility in vogue

MUMBAI: Even as investors look for pointers on the pick-up in business demand and pricing from the second quarter results of IT companies, there are trends that indicate the pricing models themselves may be undergoing a gradual change. Some of the momentum for the change has come from the recession and client pressure to share business risk. As compared to one in many deals that were seeing newer pricing models in 2007, the last few quarters have witnessed a significant increase in the number of deals based on newer models.

Some of these models have been experimented with earlier but did not become mainstream. In the current environment , analysts and IT services vendors say these deals are now becoming a lot more frequent, and may not revert to older models even post-recession . “In the last few quarters, we are seeing a lot more deals getting closed and a many contracts being re-negotiated . The newer business models are based on a risk-reward partnership and pricing based on defined outcomes,” said Karthik Ananth, engagement manager, Zinnov Management Consulting.

“About a quarter of all deals with an annual run-rate of $30 million or more are now being negotiated on these newer pricing models,” said a senior executive with one of the country’s top 10 IT exporters, requesting anonymity. “Some of the deals were structured using these models because the IT budgets of clients had frozen or vanished,” he added.
Mid-size exporter Patni Computer Services’ $40 million deal with the US-based Weyerhaeuser is learnt to be based on one of these newer models. Similarly, HCL Technologies, which bagged a seven-year $350 million contract with Reader’s Digest made an up front payment to it as part of the promised savings, pointed out an IT analyst with a brokerage, requesting not to be named.

India set to be global leader in tech services, says Forbes chief

MUMBAI: India is set to become a global leader in technology services as software companies move up in the value chain, while the weak dollar has hurt the US economic recovery, the Chairman and CEO of business publisher Forbes said on Saturday. "You have to make the distinction between pumping in money in immediate emergency response to the near collapse of the financial system and when the immediate crisis is over," Steve Forbes, 62, said, when asked what he made of the US government's response to the worst global economic crisis since the Great Depression. "This year I think the US government has made a number of mistakes that has slowed the recovery. They've not reduced taxes ... in terms of the dollar, they have not stabilised the dollar. They've weakened the dollar which hurts business investments, hurts the flow of capital and small businesses," he said. "So the government is prolonging the crisis - we should have had a strong recovery instead," Forbes said, adding that not enough was being done for job creation.

The pace of economic growth in India proved that the country was able to weather the crisis well - but the government would have to work to make the economy grow further, he said.

The Indian economy rose 6.7 per cent in 2008/09, while it is expected to rise 6 per cent in the current fiscal year. "India should continue the liberalisation that began in 1991, including simplifying the tax code and reducing tax rates, and allowing more overseas investments into India," he said. He said the bureaucratic procedures should be simplified to facilitate entrepreneurs. "One step - done!" India also needed to reduce the hurdles to building infrastructure, he said.

IBM faces rivalry despite antitrust inquiry

NEW YORK: IBM's dominance in large computer systems called mainframes may make it look like the US government has an open and shut case of

monopoly, but upon closer examination it appears there is more competition than critics suggest.

Analysts say the mainframes in question represent a small segment of the broader server market, where rivalry is heating up due to Oracle Corp's planned acquisition of Sun Microsystems Inc, as well as, network equipment giant Cisco Systems Inc's recent market entry.

The Computer and Communications Industry Association (CCIA), which urged the US Justice Department to investigate International Business Machines Corp, said the vendor of technology hardware and services had a 100 percent grip in mainframe operating systems.

IBM does dominate when it comes to supplying mainframe systems that run on its own operating system. But analysts say competition exists in other kinds of high-end servers, which similarly process large workloads and serve as the central nervous system for ATMs and airline bookings.

Technology research firm IDC's data shows IBM's high-end mainframe products, called System z, accounts for around 10 percent of worldwide server revenue of $53.3 billion.

In overall servers, IBM had 34.5 per cent market share, with HP holding around 28.5 per cent share, according to IDC.

Analysts said that since customers can switch to other mainframes or other servers, it made sense to look at the broader market.

"It's not as though people don't have other choices or can't turn to other products to do the work," said Jeffrey Hewitt at Gartner.

Try second-hand market for cheaper iPhones

BANGALORE: If you find that paying over Rs 30,000 for an iPhone does not make sense, may be you should look at the used market in mobile phones.

You are likely to find attractive high-end phones that are barely a few months old at a price that is a fraction of the original cost.

Srinivas Venugopal, proprietor of a mobile phone shop in Jayanagar, says a threemonth-old original iPhone is available for a 20-30% lower price than a new phone, and a six-month-old handset is available for 50% less.

“That is a huge saving and it makes sense for people who love to experience different models of high-end phones. Many of these are sold in exchange for old, low-end phones,’’ he says.

A brand new iPhone 3G 8GB is priced at Rs 31,000, and an iPhone 3G 16GB at Rs 36,000. The used market even has iPhones embedded with diamonds which originally cost Rs 2-3 crore.

A new Nokia N97 is priced at Rs 33,000, a Sony Ericsson C095 at Rs 23,000, a Samsung Omnia series is available from Rs 29,000, HTC Touch HD is at Rs 40,000, and an exclusive Nokia Vertu at Rs 4 lakh. Secondhand versions of these can be had at 20-50% of these prices.

A mobile phone is the most ‘flauntable’ personal accessory today and a high end cellphone continues to be a style statement for students, entrepreneurs and professionals. But few want to show-off the same handheld for more than 3-6 months. This has spawned what is now a popular used mobile phone market, on a par with the used cars mart.

“At least a lakh of high-end mobile phones are sold in Bangalore a month. And 90% of these are sold via second hand markets,” says Hassan Sahah, a mobile phone dealer at Bangalore’s National Market, a second-hand hub.

A second hand phone sold in its original packaging (box piece) with original software, data cord, manual, charger, battery, etc, can fetch a premium of 10-15%.

Nokia's netbook computer

Nokia's netbook computer, the Booklet 3G, is seen at Nokia corporate headquarters in Helsinki on August 24, 2009. The world's top cellphone maker Nokia said it would start to make laptops, entering a fiercely competitive, but fast-growing market.

Tweets to help IIM-B connect with alumni

BANGALORE: Minister of state for external affairs Shashi Tharoor does it, Bollywood actor Priyanka Chopra loves it. Twitter, a social networking site, has become a platform not only to air opinions but also to network.

Following suit is Indian Institute of Management Bangalore Alumni Association (IIMBAA), which is looking at various social networking sites, including Facebook and Orkut, to get in touch with alumni. Though IIMBAA’s primary objective is to connect them through their own public portal, www.iimbaa.org, they are looking at other means also.

“Our approach is direct contact. However , we are also trying to get in touch electronically,” Prof Sankarshan Basu, chairperson, IIMBAA, told TOI.

The association wants alumni to be involved in various activities of the institute , like placements, course design and guest lectures. Terming these activities as short-term goals, Prof Basu explained that earlier, the alumni played a significant role in placements.

After companies started to recruit directly , the requirement for alumni involvement for placements dipped gradually . “The 2008 placements were a success , but the September 2008 placement process was affected after the collapse of Lehman Brothers and other financial institutions. Around 30 fresh graduates who had joined the firm, were left in the lurch. The institute also took the help of alumni,” he said.

Prof Basu observed that alumni have helped by giving an “additional push” whenever required. “Usually students on top of the batch somehow manage to get dream jobs, but those who don’t fit the category find it difficult. This year, we are also seeking the alumni’s help in executive post-graduate programme placements, as their needs are different ,” he said.

With some of the alumni doing well in their career, the association wants them to share their experiences with students through guest lectures and also give an insight into the industry so that curriculum can be tailored to industry needs at a faster pace.

IIMBAA wants the alumni to involve itself in fund-raising activities, which they term as a “long-term ” goal.

The association is in existence for the past 34 years, however, there was no formal structure and was becoming more Bangalore-centric . Now, it’s structured properly and has set up 11 chapters — six in India (Bangalore, Mumbai, Delhi, Hyderabad, Chennai and Kolkata) and the remaining in New York, London , Singapore, Hong Kong and Dubai