Last Monday, brokerage firm CLSA set a cat among the Indian IT pigeons. In one quick, broad stroke it downgraded the software sector to ?underweight? from ?neutral? and also scaled down TCS and Infosys to ?underperform? from ?outperform?, due to what it described as a weaker revenue outlook and travel visa issues. This certainly got the goat of the software sultans, and TCS used the rest of the week rubbishing the brokerage?s viewpoints.
CLSA had said visa rejection rates in the Unites States had climbed to 40%, rising steeply from 5% from about 18 months ago. The argument was that Indian tech firms would be unable to complete projects on time, with an understaffed army of code writers. In normal circumstances, tech firms would have let that pass. But not this time.
TCS was unusually quick to quell the charge. ?On the matter of macro worries, we are not seeing any weakening of demand. Clients continue to fund new projects and ramp-ups are proceeding smoothly,? India?s biggest IT exporter said in a note to investors.
The fact that rejection rates have gone up is nothing new. It has been the case over the last one year or so. But would that trend hit the market as badly as CLSA predicts, is the moot point. At this juncture, it is difficult to believe that visa rejections will cast a long shadow on the Indian IT sector. Visa rejection rates are not uniformly 40% across all companies. That could be true in one or two cases, but the percentage could be lower in most firms. IT firms have started to tackle this issue by using technological means (telepresence, for instance) more often, disbanding the need to send a person across to the US every time.
But while companies like TCS, Infosys and Wipro can easily sail through this ?tough? phase, mid-tier firms may have to take these warnings a little bit more seriously. The macro-economic environment continues to be uncertain, made worse by the southern European financial crisis as also the setbacks in Japan. The telecom vertical, especially, has been lagging for a few quarters and those companies with greater exposure to the segment are bound to suffer more.
Having said that our software minds have always fought back and emerged stronger, whether it is the economic recession, America?s incessant anti-outsourcing tirade or the Satyam scandal. CLSA has punched, but it not likely to end up in a knockout.
Junior Premji makes a splash
Back home at Wipro, Rishad Premji is rising up the ranks. The young turk is clearly being fast tracked. CEO TK Kurien may be a very tough cookie, but it?s becoming quite clear who the hot seat will ultimately go to. Azim Premji?s eldest son is now a vice-president, but amusingly Wipro has not sent out any official communication on this. Guess it?s not great to have too much spotlight on junior Premji at this point.
Rishad joined Wipro as a a business manager in 2007 and was promoted to become general manager two years later. Early this year, he was appointed as chief strategy officer. And now he is a VP! The Harvard Business School graduate is surely making some waves, albeit quietly.
He also made some money last week selling 27% of his holding in the company for a little over R11 crore. He now holds a 0.03% stake. Smart moves. All in the genes, did you say?
Not quite linked in?
Not sure how some of our lady friends may react here, but professional networking site LinkedIn says that men are better at making connections and taking their careers ahead using social networking tools. According to a study by the site, some women don?t realise that networking is about building relationships before one actually needs them. Women across the globe have reacted very strongly to this saying that they are more likely to utilise referrals and picking up the phone or even just e-mailing the person concerned than depend on LinkedIn.
But to be fair, there are more men than women users in LinkedIn, and hence men may appear to be showing a little bit more enterprise in connecting more often. Interestingly, a recent study by The Pew Research Center (an American research outfit) said 56% of people using social network are women. It also noted that women constitute the majority of email users (52%), users of instant message (55%), bloggers (54%), and those who use a photo sharing service (58%). So it?s not like women are using the system any less. On the other hand, they seem to be the more dominant force on social networking, but LinkedIn does not seem to have caught their attention as much. How about some new gaming tools on LinkedIn, girls? Would that help?
Google?s billion
As per the latest comScore numbers, Google sites enjoyed more than one billion unique visitors in May. Not surprised? Please be, as this is the first time an internet firm has notched up that number ever in history. According to the comScore release, traffic to Google properties has increased by 8.4% over the past year. Microsoft has maintained the second position with 905 million unique visitors last month, with a 15% rise and Facebook took the third spot with about 714 million visitors. Yahoo walked in fourth with 689 million visitors.
However, the scenario changes dramatically if one looks at the quantum of time spent on a site. Here crowd favourite Facebook comes up trumps. In May, as per comScore, users spent 250 billion minutes on Facebook. Microsoft had users peering into their sites for 204 billion minutes, while surfers spent 200 billion minutes on Google sites.