Industry news

Wipro’s 9-year contract with telecommunications operator Aircel has been renewed as the company looks to refocus services.

The renewal of the technology outsourcing contract first awarded in 2008, is expected to focus on delivering cost savings and help Aircel in moving from a focus on content and applications to one on data service provision.

The data services will include voice and basic data services for the Indian based operator. The move to extend the contract comes as Indian telecoms operators look to gain the edge of rivals as the market becomes mature.

Wipro Limited announce second quarter impressive financial results

Wipro moves to focus on core IT services

The buyout of Dell is close to finally be completed after shareholders voted to approve the $24.9 billion offer.

CEO Michael Dell and investment firm Silver Lake Partners will now move forward with acquiring the PC giant.

The approval from shareholders comes after the vote was delayed twice, with analysts welcoming the end to uncertainty which risked confidence in Dell.

Shareholders under the deal will receive $13.75 per share with an additional cash dividend of $0.13 per share, an increase on the original offer.

Michael Dell stated in response to the vote: “I am pleased with this outcome and am energized to continue building Dell into the industry's leading provider of scalable, end-to-end technology solutions".

Dell announces profit drop

U.S defence giant Lockheed Martin has revealed that it intends to acquire the Scottish based Amor Group.

The acquisition of Amor, which provides IT services to public services as well as the energy sector, by Lockheed Martin's IT services group, would double the size of the division to 1,000 employees.

The Amor Group has seen strong revenue growth with a 27 per cent increase to £57 million in the last financial year.

The success of the purchase would create an ICT company that ranked in the top ten of providers in the UK market.

The announcement of its intentions to expand its UK ICT capabilities comes as Lockheed secures a £125 million contract with the MoJ.

MoJ selects Lockheed Martin for £125 million IT contract

Capgemini, a leading provider of consulting, technology and outsourcing services, and Sogeti, its local professional services division, have released a new report detailing new outsourcing trends and developments.

The fifth World Quality Report, published in conjunction with HP, reveals that application Testing and Quality Assurance (QA) now accounts for almost a quarter of IT spend, as many organizations undergo the process of digital transformation and reliable software applications become increasingly critical to their operations and reputation.

As the importance of application quality increases, average spending on QA as a percentage of total IT budget has grown from 18 percent in 2012 to 23 percent in 2013.

“With the research findings showing that almost a quarter of IT budgets are now being allocated to Testing and QA activities, measuring the ROI to the business based on financial as well as IT operational metrics is becoming ever more important,” said Matt Morgan, vice president, Product Marketing, Software, HP.

In addition to the development of QA spending, the report revealed that the UK is among the leaders in adopting cloud technologies.

On average, an organisation has 22% of its applications migrated or hosted in the Cloud. However the report revealed that a large majority of cloud initiatives are taking place among smaller, more agile companies, while larger corporations with massive in-house infrastructure investments and great security concerns are seen to be much slower to realise the benefits of the Cloud.

UK economy being driven by IT despite existing skill gaps remaining

Cloud market revenue to reach nearly $20 billion by 2016

Outsourcing group Serco, which provides prison escort services to the courts, is set to drop out of the FTSE 100 after shares were hit by allegations of fraud and overcharging.

The allegations relate to the falsification of documents by Serco staff which made it look as if prisoners had been delivered to courts on time, and the overcharging of millions for tagging services.

In response to the claims which led an on-going police investigation, Serco shares fell by 17.4 per cent since July, with the market capitalisation of the company falling to £2.8 billion.

The drop in market value now places the outsourcing provider in the FTSE 100 relegation zone.

Serco Chris Hyman, chief executive of Serco, said after the reveal of misreporting, that the company would move to “immediately initiated a programme of change and corporate renewal."

Serco working with the Government to fix prisoner escort service

G4S pulls out of electronic tagging renewal bid after overcharging controversy

UK public outsourcing has fallen according to new figures, with the market growing at a slower rate than in 2012.

Results posted by Information Services Group (ISG) for the first half of 2013, have revealed that the UK market is worth €2 billion. This figure suggests that without exceptional activity in the rest of the year, outsourcing in 2013 is unlikely to surpass the €4.6 billion that the market generated in 2012.

The results provided some encouraging news for the industry, with UK public sector outsourcing outpacing all other region countries. With the UK spending five Euros for every euro spent on outsourcing in every other EMEA country put together.

Outsourcing provider Synnex has purchased IBM’s customer care outsourcing unit for $505 million.

The purchase will provide Synnex with increased talent and expertise while increasing the businesses service levels. The IBM unit will be merged into an existing BPO service department.

IBM completed the sale after moving to focus on software cloud-based services, despite the move to centralise its focus, IBM will continue to provide BPO services, turning to deliver BPO software and analysis services.

Sears outsources IT services to IBM

IBM moves to acquire cloud security company

In the most contentious sell off since British Rail two decades ago Vince Cable has announced that the 497-year-old postal service is to be privatised.

"This is an important day for the Royal Mail, its employees and its customers," the business secretary said. "HM Government is taking action to secure a healthy future for the company. These measures will help ensure the long-term sustainability of the six days a week, one-price-goes-anywhere universal postal service.”

The unions are meeting with the Royal Mail chief executive, Moya Greene, on Thursday morning to voice their anger at the "great British flog-off". The Communication Workers Union (CWU) plans to disrupt the Royal Mail sale by holding a strike ballot on 20 September, which could lead to a nationwide strike by 10 October. It would be the first nationwide postal strike since 2009. The union is also pushing for a better pay deal, after rejecting a 8.6% pay rise over three years. The union opposes the potential £3bn flotation despite the government promising 150,000 postal staff a 10% stake in the company – worth up to £2,000 each – for free. The government also promised staff a further £13.3m in dividend payments in the first year and promised a "progressive dividend policy" in subsequent years.

The public will also be able to buy shares via stockbrokers or directly from the government via postal or online applications. Members of the public will have to buy at least £750 worth of stock, while Royal Mail employees will have preferential access to more shares if they spend at least £500. Goldman Sachs and UBS are lead advisers on the sale of shares.

As part of the privatisation, Royal Mail will take on £600m of loans from banks, with another £800m available if necessary. This will replace the loans it currently has from the government. The government has not yet decided exactly how much of the company it will float on the stock exchange with the size of the stake sold to be "influenced by market conditions at the time of the transaction, investor demand and the objective to ensure that value for money for the taxpayer is achieved".

Billy Hayes, general secretary of the CWU, said 96% of Royal Mail staff oppose the sell-off, which "not even Thatcher dared do".

Shadow business secretary Chuka Umunna said: "Ministers are pushing ahead with this politically-motivated fire sale of Royal Mail to fill the hole left by George Osborne's failed plan."

Greene said: "Our strategy is delivering a revitalised company, with a unique UK, multi-use network through which we are proud to deliver the universal postal service for all UK citizens.

"This network and our strong brand, coupled with the high service quality delivered by our people enable us to take full advantage of the growth in UK e-commerce to further enhance our pre-eminent parcels business. Combining this UK presence with our pan-European parcels business GLS, should result in a financial profile that combines revenue growth and margin progression to underpin strong cash flow generation."

Details of Royal Mail privatisation expected to be revealed today

A new report has revealed that the UK digital sector while boosting the UK economy is being hampered by continuing skill gaps in the industry.

A new report entitled Technology and Skills in the Digital Industries” UK Commission for Employment and Skills reveals that the potential of the digital sector to boost economic growth is being restricted by a lack of skills.

The report predicts that over the next ten years, IT specialists are expected to turn the digital sector into a heavyweight element of the UK economy, as cyber security, mobile technologies, Green IT and cloud computing change the way businesses and individuals use technology. The demand for new products, applications and mobile devices providing information securely, in ‘real time’ and in an energy efficient way are crucial for business growth.

The digital sector will require nearly 300,000 new recruits by 2020 to maximise its full potential. New roles will be created that will require both deeper and more specialised technical IT skills, complemented by business, sales and communications skills. But at present, a lack of specialist technical skills are hampering growth in the sector. Nearly one fifth of all vacancies are difficult to fill due to skills shortages, making it harder for digital companies to keep a pace with technological change.

Rachel Pinto, research manager at UKCES, said: “To make sure the digital sector really thrives, there’s a clear need for employers to take ownership of the skills agenda and play an active role in training the next generation of IT specialists.”

Microsoft backs $5 billion visa plan to combat skill shortages

Will.i.am and Prince’s Trust promote IT skills

Indian IT outsourcing firm Tech Mahindra has been awarded a contract to provide application maintenance and development for Volvo.

Tech Mahindra stated that the application development service which will be used manufacturing, development, marketing and sales, will be designed to reduce costs through increased overall efficiency. Outsourced IT services will start to be delivered this months.

Vikram Nair, Tech Mahindra head for Europe operations, said: “We see this contract as an opportunity to increase our contribution to Volvo Cars and further develop our business in the region. “

Tech Mahindra post rapid quarter growth