The Telecom Industry

Two years ago when hiring hit rock bottom, the telecom space emerged as a silver lining. Today, telecom hiring is headed southwards as telcos are busy focussing on cost cutting, with business sentiments weak and margins being squeezed.

Telcos hired almost a lakh of people each during 2008, 2009 and 2010. Large telecom players like Airtel, Vodafone, Idea, Reliance, Tata Teleservices, Tata Docomo and BSNL and new entrants like Swan Telecom, Datacom (of Videocon Group), S-Tel, Loop Telecom (of Essar Group), Unitech (Uninor), Shyam Telecom (of Sisteme Russia-MTS), Etisalat were bullish given their pan-India roll out activities.

But today, new entrants and existing players, despite having spectrum licenses, are unable to roll out pan-India networks due to high cost of infrastructure and margin pressures. Telcos are also very top heavy, having created new roles and enlarged responsibilities to prevent talent leaving to join competition.

Rohan Mehta, associate vice president, Elixir Consulting, said most telcos would be able to produce the same result even if they cut 25% to 33% of their senior management.

The Tatas have merged their CDMA and GSM divisions and rationalized some 750 positions. Bharti Airtel has gone in for a comprehensive restructuring, compromising around 2,000 job positions. Vodafone, Idea, Aircel and Reliance have frozen hiring and are not filling the existing vacancies.

Elisalat has fired many. Virgin Mobile, which operated on Tata spectrum, has exited , while Loop Telecom could not take off and some 100 people lost their jobs. Datacom (a Videocon venture) too is looking for an exit.

Ronesh Puri, managing director , Executive Access, a New Delhi-based executive search firm, said, ``Telecom hiring has reduced by 70%. Many telcos have put a freeze on hiring, except on a few strategic positions. Companies are redeploying talent or making internal adjustments or firing people.''

Vinay Grover, founder director, Symbiosis Management Consultants, said hiring numbers are almost negligible in the telecom space, though some marginal hiring is visible in areas like network, routers, towers and switches.

Such hiring is being done by companies like Huawei, Nokia Siemens, Alcatel Lucent, ZTE, Ericsson that are laying networks for 3G. Alcatel-Lucent, Cisco and Juniper are also hiring marginal numbers in product development, testing, network, routing protocol, call processing, administration and operation and management areas.

The telecom industry is headed towards a huge shakeout. A consolidation is expected that will reduce the number of players to 4-5 from the current 12. The government is creating an exit policy, and once that is in place operators will have better clarity on exit routes.

Cloud computing: reshaping IT market

Companies in India will increase the adoption of cloud competing technology over the next five years. The total cloud market in India, currently at $400 million, will reach $4.5 billion by 2015. Of which private cloud adoption will dominate and account for $3.5 billion in revenues, growing at over 60 per cent, according to a study. The study, ‘private cloud landscape in India' was done by EMC Corporation, a provider of IT service and solutions, and Zinnov Management Consulting, a management consulting firm.

The study says that private cloud market will create one lakh jobs by 2015 against 10,000 now. Today, companies are under-skilled in addressing cloud computing implementations. It recommends companies to invest in competency building internally to take advantage of cloud computing technologies. The study estimates that the skilling and re-skilling market in India will grow fast as cloud computing becomes critical to IT strategies. Leading public and private educational institutions, along with IT enterprises are expected to play a key role in enhancing workforce skills to match the industry demand for cloud computing.

The growth in cloud computing market is attributed to the increased maturity of Indian enterprises towards cloud computing and the chief executive officer / chief information officer mandate for an enterprise-wide cloud strategy. It adds that with the overall environment of cloud adoption fast evolving in India, cloud computing will account for a significant share in the total IT spend of small, medium and large enterprises. 

The total cloud spends as a percentage of total IT spend as such is expected to rise from 1.4 per cent in 2010 to 8.2 per cent in 2015. 

The study notes that IT/ITeS, telecom, BFSI, manufacturing and government sectors will contribute nearly 78 per cent of the total cloud market, according to Pari Natarajan, Chief Executive Officer, Zinnov Management Consulting.

Private cloud

According to the study, there will be an increase in preference of private cloud over public cloud over the next five years. It also estimates that private cloud deployments can result in potential savings of up to 50 per cent on the IT investments on an average, when compared with a legacy IT model, with cost optimisation in areas such as telecom and networking, facilities and fabric, hardware, software, internal labour and external IT services.

Cloud computing will reshape the Indian IT market by creating new opportunities for IT vendors and driving changes in traditional IT offerings. 

There is every chance that companies that are not adopting IT today and do not have major investments in data centres and server farms will directly move into the cloud model.

IT-BPO Sector in India: Strategic Review 2011

The Indian information technology (IT) industry has played a key role in putting India on the global map and is now envisioned to become a US$ 225 billion industry by 2020.
Over the past decade, the Indian IT-BPO sector has become the country’s premier growth engine, crossing significant milestones in terms of revenue growth, employment generation and value creation, in addition to becoming the global brand ambassador for India.
According to a research report published by National Association of Software and Service Companies (NASSCOM), ‘IT-BPO Sector in India: Strategic Review 2011,’ the sector is estimated to aggregate revenues of US$ 88.1 billion in FY2011, with the IT software and services sector (excluding hardware) accounting for US$ 76.1 billion of revenues.
The report estimates export revenues to gross US$ 59 billion in FY2011 and contribute 26 per cent as its share in total Indian exports (merchandise plus services), employing around 2 million employees.
Within exports, IT Services segment was the fastest growing segment, growing by 22.7 per cent over FY2010, and aggregating export revenues of US$ 33.5 billion, accounting for 57 per cent of total exports.
NASSCOM said that the domestic IT-BPO revenues excluding hardware are expected to grow at almost 16 per cent to reach US$ 17.35 billion in FY2011. Strong economic growth, rapid advancement in technology infrastructure, increasingly competitive Indian organisations, enhanced focus by the government and emergence of business models that help provide IT to new customer segments are the key drivers for increased technology adoption in India.
The data centre services market in the country is forecast to grow at a compound annual growth rate (CAGR) of 22.7 per cent between 2009 and 2011, to touch close to US$ 2.2 billion by the end of 2011, according to research firm IDC India's report published in March 2010. The IDC India report stated that the overall India data centre services market in 2009 was estimated at US$ 1.39 billion.
India will see its number of internet users triple to 237 million by 2015, from 81 million registered in September 2010, according to a report titled 'Internet's New bn', by the Boston Consulting Group (BCG). BCG said Internet penetration rate in India is expected to reach 19 per cent by 2015, up from the current seven per cent.
TRAI said on December 7, 2010 that it was targeting a 10-fold increase in broadband subscribers to 100 million by 2014. The country has 10.29 million subscribers now. "We will have 100 million broadband subscribers by 2014," J.S. Sarma, Chairman, Telecom Regulatory Authority of India (TRAI) said at the fifth India Digital Summit 2010 organised by the Internet and Mobile Association of India.
India's personal computer market grew 30 per cent in 2010 — the highest since 2007, research firm IDC revealed. Hewlett Packard emerged the top company in India, leading in both notebook and desktop categories. HP regained market leadership after two quarters with a 17.3 per cent market share, taking the pole position from Dell Inc that got 14.2 per cent of the market. Nearly 25 lakh personal computers were shipped to Indian consumers, pushing up the overall sales by 26 per cent. Around 14.5 lakh desktop PC units were sold in the fourth quarter last calender year, a 14 per cent increase over 2009.
Outsourcing
India is a preferred destination for companies looking to offshore their IT and back-office functions. It also retains its low-cost advantage and is a financially attractive location when viewed in combination with the business environment it offers and the availability of skilled people.
Some big deals in the outsourcing space include:
Four Soft Ltd, which offers software solutions for the logistics and transportation industry, has signed a large contract with Jacobson Companies, for implementing its multimodal transport management system and business intelligent tool across Jacobson locations globally.
Information technology (IT) services and solutions provider Patni Computer Systems has signed a five-year contract worth over US$ 32.09 million with UK-based IT services provider 2e2. Patni will provide a range of support services to 2e2's end-user clients and in-house support services.
Firstsource Solutions, a Mumbai-based business process outsourcing (BPO) provider, has announced a five-year outsourcing partnership with Barclaycard, the UK-based credit card and consumer lending business of Barclays PLC.
Vertex, a global customer management outsourcing (CMO) and business process outsourcing (BPO) company, has announced a joint venture with Shell Transource to address the domestic BPO market. Vertex will own over 70 per cent in the joint venture, with Shell Transource holding the rest.
Patni Computer Systems has secured outsourcing engagements from the Scandinavian insurance company Codan Group and the UK-based Serco Learning.
Tata Consultancy Services Ltd (TCS) has announced the launch of its first BPO centre in the Philippines. This is also the firm's first BPO centre in the South-East Asian region.
Domestic Markets
Domestic BPO segment is expected to grow by 16.9 per cent in FY2011, to reach US$ 2.8 billion, driven by demand from voice based services, in addition to adoption from emerging verticals, new customer segments, and value based transformational outsourcing platforms.
Indian software product segment is estimated to grow by 14 per cent to reach US$ 3.46 billion, fueled by replacement of in-house software applications to standardised products from large organizations and innovative start-ups.
Investments
Between April 2000 and December 2010, the computer software and hardware sector received cumulative foreign direct investment (FDI) of US$ 10,601 million, according to the Department of Industrial Policy and Promotion.
The total investments of EMC Corporation, a leading global player of information infrastructure solutions in India, will touch US$ 2 billion (over US$ 2.01 billion) by 2014.
Syntel, an IT company, plans to invest around US$ 50 million in its global development centre in Chennai.
Russian IT security software provider, Kaspersky Lab, will be investing US$ 2 million in its India operations at Hyderabad during 2011.
On the back of 40 per cent revenue growth, Cognizant will invest more than US$ 500 million till 2014 to expand its campuses to add over 8 million square feet to house over 55,000 employees. It will create additional software development and training facilities in regions designated as special economic zones in Chennai, Pune, Coimbatore and Kolkata.
Government Initiatives
Government sector is a key catalyst for increased IT adoption- through sectors reforms that encourage IT acceptance, National eGovernance Programmes (NeGP) , and the Unique Identifi cation Development Authority of India (UIDAI) programme that creates large scale IT infrastructure and promotes corporate participation.
The government has constituted the Technical Advisory Group for Unique Projects (TAGUP) under the chairmanship of Nandan Nilekani. The Group would develop IT infrastructure in five key areas, which includes the New Pension System (NPS) and the Goods and Services Tax (GST)
The government set up the National Taskforce on Information Technology and Software Development with the objective of framing a long term National IT Policy for the country.
Enactment of the Information Technology Act, which provides a legal framework to facilitate electronic commerce and electronic transactions.
Setting up of Software Technology Parks of India (STPIs) in 1991 for the promotion of software exports from the country, there are currently 51 STPI centres where apart from exemption from customs duty available for capital goods there are also exemptions from service tax, excise duty, and rebate for payment of Central Sales Tax. But the most important incentive available is 100 per cent exemption from Income Tax of export profits, which has been extended till 31st March 2011.
Government is also setting up Information Technology Investment Regions (ITIRs). These regions would be endowed with excellent infrastructure and would reap the benefits of co-siting, networking and greater efficiency through use of common infrastructure and support services.
Moreover, according to NASSCOM government, IT spend was US$ 3.2 billion in 2009 and is expected to reach US$ 5.4 billion by 2011. Further, according to NASSCOM, there is US$ 9 billion business opportunity in e-governance in India.
Road Ahead
The Indian information technology sector continues to be one of the sunshine sectors of the Indian economy showing rapid growth and promise.
According to a report prepared by McKinsey for NASSCOM called 'Perspective 2020: Transform Business, Transform India' released in May 2009, the exports component of the Indian industry is expected to reach US$ 175 billion in revenue by 2020. The domestic component will contribute US$ 50 billion in revenue by 2020. Together, the export and domestic markets are likely to bring in US$ 225 billion in revenue, as new opportunities emerge in areas such as public sector and healthcare and as geographies including Brazil, Russia, China and Japan opt for greater outsourcing.

Paradigm Shift: Issues top IT cos are stuggling with

For the Indian information technology (IT) sector, it appears to be the best of times and the worst of times, contradictory as it may sound. The best because after the subprime crisis, the world is relying on the outsourcing capabilities of Indian IT firms like never before to transform businesses and stay competitive. And, the worst because the sector is gradually waking up to the fact that not all the top players are on an equal footing when it comes to business momentum.

Some of these firms are grappling with serious issues pertaining to either lack of strategic focus or able leadership or both. This week, ET Intelligence Group takes a closer look at the changing dynamics of the employee-driven sector to identify the ones among both the large and smaller companies which will perform well in the long run.

THE JUGGERNAUT CALLED IT

The IT-BPO sector has been one of the fastest-growing sectors in terms of revenue, exports and employment generation. Data from trade body the National Association of Software and Service Companies (Nasscom) shows that the export revenue of the sector grew at 28% in the past 10 years when compounded annually.

Its share in the country's total exports grew to over 26% from less than 10% during the period.What also makes the sector unique is the rate at which it has generated employment. Unlike most other sectors in the manufacturing industry, the IT sector has been at the forefront in terms of adding jobs. In FY11, IT companies are reckoned to have added 2.4 lakh jobs to take the total headcount to 25 lakh, according to Nasscom estimates.

OLD GAME, NEW CONTENDERS

The sector faced a sharp slowdown due to turbulence on the macro-economy front twice in the past 10 years - once after the dotcom bubble in early 2000 and then in 2008 when the subprime crisis hit the global economy. It, however, bounced back on both occasions.

The rebound was much faster in the aftermath of the global financial crisis twoand-a-half years ago. But it is less secular this time around compared to the post dotcom era wherein most IT companies took advantage of the demand recovery.While demand has improved in the past six-eight quarters, it has not benefited top companies in equal measure. While Tata Consultancy Services , Cognizant and HCL Technologies were at the forefront of the demand uptick, traditional contenders, including Infosys and Patni, looked constrained due to their own strategies adopted in the past.

Take for instance, the comparative growth rate among top three peers, including TCS, Infosys and Wipro. Infosys and Wipro grew their respective net profits at a compounded annual growth rate (CAGR) of 21-22% in the past four years. The growth was much faster at 28% for TCS. A starker picture emerges if we take into account a two-year horizon. Between FY09 and FY11, the net profit of Infosys rose by 4.5% compared with the 11% growth in Wipro's bottomline and 18.6% in TCS's (see graph).

THE DIFFERENTIATORS

What has separated the performance of these companies is the difference in strategies, which each one of them followed over the past five years. Infosys largely focused on margin-driven organic growth with a greater thrust on improving business efficiency. Wipro paid more attention to embedded technologies and infrastructurerelated segments. TCS made investments in increasing onshore presence across Europe, Latin America and Australia. It also acquired a few companies to enhance its vertical presence.

The strategy seems to have worked well because TCS could take advantage of the revival in outsourcing demand over the past six quarters. It commanded the biggest share of the incremental revenue and operating profit during the period. The company also pruned its operating cost structure to improve profitability of its business.

How to get your own unique identity number

With a mammoth exercise on to issue an Aadhar number to each of India's 1.2 billion citizens and interested residents, here is a look at the process involved for getting what will become a unique identity for people in India to access all public or private services.
The Unique Identification Authority of India (UIDAI) - under the chairmanship of Nandan Nilekani - is the nodal agency, which had appointed registrars across the country to facilitate the enrolment process.

Nilekani was one of the co-founders and previously headed IT bellwether Infosys. He enjoys cabinet rank in his present status.

Registrars are typically government departments and public sector organisations. They in turn appoint the agency to collect data. Currently, over 200 such agencies have been named including Wipro, Comat Technologies, Alankit and Virgo Softech.

"Aadhaar guarantees uniqueness and a universal identity. At its core is a centralised online identity verification process," said Atul P. Anand, director at Virgo Softech, which is one of the enrolment agencies involved in the process.

"Biometric information like iris and fingerprints ensure this uniqueness. This is also embedded and hence tamper proof. The authority uses data de-duplication process, which also makes sure that only unique data is stored," said Anand.

Officials explained the enrolment is done in four stages -- verification of documents including address proof, on-the-spot capture of photos, iris and fingerprint scanning -- after which people are given acknowledgment slips at the time of enrolment.

A 12-digit unique identification number is then delivered in 20-30 days at the person's address through speed post after verification of biometrics and demographic data. Data verification is done by the authority under a centralised system.

The system ensures duplicate data is deleted, leaving only one copy to be stored.
"If you try to enrol yourself for the second time by using some different demographic information or data, you cannot do it. That's also because you can't change your iris and fingerprint. So duplicate data automatically gets deleted," said Anand.

There is also no age bar to enrol for the number.But the unique number of a child up to five years of age is linked to that of his or her parents or guardians. On completion of 15 years of age, biometric data is updated, but the number remains the same.

The people who don't remember their date of birth and have no documents to back it can provide approximate age. Transgenders have also been included; so under gender options, there are three categories -- male, female and transgenders.

"The number can be issued to even a new-born and it remains the same throughout the life. The system is also versatile. Both biometric and demographic data can be updated," a Virgo official said. But the authority has not started the updation process.
On concerns over security and privacy issues, officials said it was, indeed, a rather big challenge and that the authority was trying to make sure that the unique identity number is not misused.

Many analysts have raised concerns that the number can be misused by anti-socials such as terrorists, since they can get it issued through fake identities during large-scale enrolments.

And once it is issued, a person can easily apply for a passport and open bank accounts.
The authority issued the Aadhaar number in September 2010 and targets 600 million people over the next four years. It has to issue every resident a unique identification number that can be used to establish the identity of the person anywhere in India.
Currently, on an average 150,000 enrolments are done each day. The number of enrolments is expected to reach six million per day by October. The task, therefore, is daunting, since the latest data places the country's population at 1.21 billion.
 Some frequently asked questions answered on "Aadhaar":

What is Aadhaar:
A tool for social empowerment and inclusion, Aadhaar is a 12-digit number being issued to all residents by the Unique Identification Authority of India (UIDAI). This number is stored in a central database and linked to some basic demographics and biometric information -- photo, 10 fingerprints and iris -- of each individual.

Why Aadhaar:
For applicants, Aadhaar, over time, will be recognised and accepted across the country and become the basic, universal identity of residents for all public and private services. Once enrolled, service providers will no longer face the problem of performing repeated 'know your customer' checks.

Genesis of Aadhaar:
Inability to prove one's 'identity' is one of the biggest barriers preventing the poor from accessing benefits and subsidies given by the government or private agencies. Aadhaar promises an identity to every resident - children, differently-abled people, tribespeople, unorganised workers, the poor and the marginalised can also secure a unique identity.

Who can get Aadhaar:
Every individual, from infants to seniors, who is a resident in India and satisfies the verification process laid down by the Authority can get an Aadhaar.

How to Get Aadhaar:
The resident needs to go to the nearest enrolment camp and register for an Aadhaar, along with certain specified documents. Upon registering, residents will go through a biometric scanning of 10 fingerprints and iris. They will then be photographed. The 'Aadhaar' number will be issued within 20-30 days.

How to track Aadhaar application:
Every resident seeking enrolment is given a printed acknowledgment form with an enrolment number that enables her/him to make queries through any of the communication channels - phone, fax, letter or e-mail.

What use can Aadhaar be put to:
Aadhaar means foundation. It can be used in any system that needs to establish the identity of a person seeking a service. It will particularly help the delivery of programmes on food and nutrition, employment, education, inclusion and social security, healthcare, and other services such as property transactions, election card, tax card and driving licence.

Women CEOs missing in Indian IT

Try to think of a woman CEO in Indian IT and our guess is you will struggle. Neelam Dhawan, MD of HP India , may come quickly to mind. But after that, it’s not easy.

Capgemini recently promoted Aruna Jayanthi, its global delivery officer for outsourcing, as its CEO for India. Akila Krishnakumar has been head of Sungard India for some years now.

At the next CXO level, it’s only a little better. In an industry where over 30% of the employees are women, and which boasts of almost 50% of its new hires in recent times being women, the near absence of women at the top may appear odd. But it isn’t difficult to understand. Most Indian women still value their roles at home. Many times, a woman self-imposes career blocks to prioritize home over work.

“A CXO’s job involves being available 24/7. It’s not the capability issue, but availability issue,” says Kunal Banerji, CEO of Absolute HR. Ganesh Shermon, partner & country head, human capital, at KPMG Advisory , says when it comes to composition of boards, peers impact the choice of other members.

“The senior, aged board members are averse to the younger lot, and definitely women at that. Traditional business houses prefer their own family as board members. They are quite uncomfortable with external women directors on their Board asking them questions,” Shermon says.

But there are signs that situation is changing for women. Sunita Cherian, GM for talent engagement and development at Wipro Technologies , says that as the number of women in the corporate sector has grown, so has their ambitions.

Understanding What exactly you want to do in Stock Markets

Let us discuss the important aspect new beginners must understand what they want to do exactly in stock markets . In this post we will see what are the different types of things they can do . Also lets explore what are the different options available for you .

So, you are new to stock markets and you have heard lots of people make good money . You jump in , open a trading account, read some blogs online which claim to have 80-90% success rate and you jump in to buy some stocks . You make money or loose money , doesn’t matter in short run , What you are concerned is long term is you are serious , if you are not serious , i would recommend go somewhere else, if you take stock market as hobby , its a costly hobby i am telling you .

Below is the way how New comers behave in Stock Markets, click on the pic to enlarge .

Lets see some of the most important things a new comer should ask himself/herself .

Who am I ? A Trader or an Investor ?

This is one of the most important question you have to answer.  Are you are Trader or an Investor ?

Investor is someone who buys the stock for long term . Investing it self is a word which means that you are putting your money in something and you expect it to grow over time . This has to take with fundamentals , company’s potential , long term prospects . Cash flow , profit and losses. See it as owning the firm , where will u put your money in ? Its has to be something which will grow over time from its current levels . You are not concerned about its short term movements .
If the company share prices are providing value over its current price , and it has consistent track record , has good future prospects and many more things like these , you will buy it .

Trader on the other hand is someone who buys and sells the stock for short term . He is not concerned about long term prospects of a company’s much . He is more interested in what stock will do in short term . His decisions are more based on news , technical analysis , gut feeling and things like those .

What will i Trade/Invest In ?
Another important question to ask is What you want to trade or Invest in ?

If you are an investor you can choose from Large Cap companies (NIFTY companies) , MIDCAP companies or very small penny companies . Each of them offer different risk and reward opportunity . But you have to be clear with what you are going to invest in . Because once you are clear with it , you can make some strategy for it and follow it , juggling from one to another will lead to confusion and is not recommended .

If you are Trader , you have to choose from Stocks , ETF’s , Futures or Options . Each of them are different from each other and require specific knowledge about them . Its a critical factor to know what you are going to trade .

Once you know what you are going to be involved with you have a clear road map and then you can move forward to next thing .

What will be my Time Frame ?

Another important thing to consider is the time frame for you .

For Investors It can be very long term (10+ yrs) . Medium term (3+ yrs) , Short Term (1+ yrs) . It depends on your personality , your ability and time to be involved with stock markets . Something which works for a person with short term view may not work with long term view person . So each time frame has its own advantage and disadvantage . you just have to choose one and be clear about it .

For Traders , you again have to choose your time frame and your style of trading . You can be

• Positional Trader whose holds the trades from some weeks to some months
• Swing Trader (few days)
• Day Trader (Buy and Sell on the same day)

You can trade

• Stocks
• ETF’s
• Stock Future’s
• Index Futures
• Stock Options
• Index Options

Understand that each time frame is different and each will yield different result . Two people with different view on market and different time frame can both make money .

Example :

You are bearish on market and you say that Markets are going to fall soon . I say that I am bullish and markets may go up . for next 3-4 days markets move up and I make money based on my judgement and then markets fall heavily and you can make money based on your judgement . So the important thing here is no one is wrong , the only thing is different time frame , So before listening to anyone you also have to understand their time frame . Many analysts on TV channels will give calls like “BUY RELIANCE at 2130 , with target of 2200 , SL 2100″ , Don’t go and buy RELIANCE next day because you have no idea about the time frame of the person , what is the analysis behind it and what are the risk in it . It may work once in a while but its a recipe for disaster for long term .

Conclusion

” A person who wants to do everything eventually cant do anything “

Stock Markets have different kind of things and offer different ways of making money. If you are not clear on how exactly will you do things , Its a tough game then , the first important step is to Identify what you want here , just like in Life we must be clear of what we want to do and then be good at it , learn about it and just consistently improve in it . the same we must do in Stock Markets.

Global Financial Crisis and India

What actually happened

In simple terms global financial crisis, was a man-made bubble which burst, like all bubbles. Isn’t it a known fact from physics (Not sure whether it's physics or chemistry) that all bubbles burst at some point or the other? In the USA, where all the trouble began, government backed banks started lending loans to people at very low interest rates, to buy houses and riding on this wave, house prices began soaring up. 

Even people with lower income were given loans as the banks were given an assurance by the US federal government that their returns are safe. This assurance made banks greedy and more and more banks began giving out loans. There may be politically driven vote bank motive behind this move as the fed government wanted people to realize their “AMERICAN DREAM” of owning a house in Mainland America.

If I remember quite well, every private bank in India repeatedly calls people (I don t know where they get our numbers from) asking to take loans and in contrast nationalized banks hardly think of loans as their mainstream business, they are bothered only about big fat deposits coming into their banks. This may be a good reason why our public banking system has withered the storm, but what about development? Our nationalized banks have a thousand rules to pass a loan, even for a BICYCLE.

Anyway, back to USA, these mortgages were bundled into securities by the banks and sold to China, Ireland, Germany and many other countries. So far so good. But gradually interest rates were increased by the federal bank in 2006; people could not pay back their loans as the rates were high. An obvious effect of all these was house rates going falling steeply which in turn led to foreign investors thinking twice before buying such mortgages, and financial institutions such as Lehmann Bros and AIG who had heavily invested in these crazy home loan securities were bankrupt as there were no buyers. Panic drove through all sectors and the whole system tumbled down like a pack of cards. If one thinks that the worst is over, we are wrong.

What is happening

Governments pumped money into the system which ran to the tunes of trillion dollars. Stimulus packages were given to every bank, every automaker to keep them afloat and yet executive bonuses were pretty hefty. If we look closely at the stimulus packages money, it is the taxpayer’s money which is going down the drain. People are encouraged to take another loan to repay their older loan, people are encouraged to spend money which is not theirs, which they should realize is not affordable. 

To nullify the mortgage based bubble, the government has blown another bigger bubble. Every country is doing the same. Even I had thought that spending money now would be the best solution, but it seems to be a mid term solution, the final outcome is going to be a disaster. Political motives and corruption are also not helping to channelize the money to the right sectors. Countries have to go bankrupt in near future due to excessive debts; Experts have named the countries which are going to be bankrupt as PIGS (Portugal, Ireland ,Greece and Spain) just as Goldman Sachs had named emerging economies as BRIC (Brazil, Russia, India and China)

Where does India stand amongst all this trouble?

Well quite frankly, we are doing great compared to other countries. As our economy is mainly domestically driven rather than export driven like Chinese economy, we are better insulated to the storm. The Indian mentality of saving rather than investing has also come in handy. It s like we have had a precautionary shot to overcome this meltdown.

In the early 1990’s when our economy was freed and was made attractive to foreign investment, care was taken to make it moderately export driven by leaving enough space for domestic markets and domestic players.

Agriculture and small scale industries are India’s main breadwinner for a rural family, and IT for an urban family. Around 65% of Indian population depends on agriculture for a living and its accounts for 22% of GDP, and Indian IT and BPO exports constitute 6 % of GDP. There are several other exports like fish, fish oil, ayurvedic medicines and many other secondary materials out of agriculture which drive our export market. Reports say that within the next 5 years India is going to take over from China as the manufacturing hub of the world. Nevertheless, we are hit by the global phenomenon and have to take measures to withstand it.

What should we do?

As responsible citizens of a huge democracy, first thing we can do is to pay taxes and not deprive of the government of their income. This is the right time to drive in some major rural development schemes and fill up the void inside. Distribution of wealth in India is very uneven and the rich are getting richer and the poor more poor (I mean the tax paid is not going in right directions for development work, half the money ends in our corrupt leader’s pockets).

The government has to bring out strict measures to oversee the implementation of some good schemes such as National Minimum Wages and the Rozgar Yojana. Helping farmers spend and cultivate more would be a solution, but again the extent of inflating the bubble has to be checked by the banks before lending out money to farmers. Agriculture sector can create a lot of jobs in India and the only thing which is hindering us is the lack of dignity in making agriculture a career. No father wants his son to be a farmer and vice versa and I do not know why this culture has dawned upon Indians off late.

The world is going to soon see one more financial crisis, as most of the trend analysts predict. We can withstand or even avoid it, if we act upon it soon. We as citizens of the world have to make our contribution by becoming aware of complex investments, government programmes, political situation and its effect on the economy. Even saving electricity and water might help in a small way. Now that we know there is going to be a downturn, it is up to us and the governments of the world to get some measures in place and sail us through the rough times smoothly.

Why I Give: Warren Buffett

In 2006, I made a commitment to gradually give all of my Berkshire Hathaway stock to philanthropic foundations. I couldn't be happier with that decision.

Now, Bill and Melinda Gates and I are asking hundreds of rich Americans to pledge at least 50% of their wealth to charity. So I think it is fitting that I reiterate my intentions and explain the thinking that lies behind them.

First, my pledge: More than 99% of my wealth will go to philanthropy during my lifetime or at death. Measured by dollars, this commitment is large. In a comparative sense, though, many individuals give more to others every day.

Millions of people who regularly contribute to churches, schools, and other organisations thereby relinquish the use of funds that would otherwise benefit their own families. The dollars these people drop into a collection plate or give to United Way mean forgone movies, dinners out, or other personal pleasures. In contrast, my family and I will give up nothing we need or want by fulfilling this 99% pledge.

Moreover, this pledge does not leave me contributing the most precious asset, which is time. Many people, including — I’m proud to say — my three children, give extensively of their own time and talents to help others. Gifts of this kind often prove far more valuable than money. A struggling child, befriended and nurtured by a caring mentor, receives a gift whose value far exceeds what can be bestowed by a check. My sister, Doris, extends significant person-to-person help daily. I've done little of this.

What I can do, however, is to take a pile of Berkshire Hathaway stock certificates — “claim checks” that when converted to cash can command far-ranging resources — and commit them to benefit others who, through the luck of the draw, have received the short straws in life... At the latest, the proceeds from all of my Berkshire shares will be expended for philanthropic purposes by 10 years after my estate is settled. Nothing will go to endowments; I want the money spent on current needs.

My wealth has come from a combination of living in America, some lucky genes, and compound interest. Both my children and I won what I call the ovarian lottery. (For starters, the odds against my 1930 birth taking place in the US were at least 30 to 1. My being male and white also removed huge obstacles that a majority of Americans then faced.)...

The reaction of my family and me to our extraordinary good fortune is not guilt, but rather gratitude. Were we to use more than 1% of my claim checks on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs. My pledge starts us down that course.

Should you bet on the yellow metal?

The year 2010 was quite an eventful year. Uncertainty in global economic scenario continued. We witnessed financial crisis in European countries like Greece, Portugal, Ireland and Spain. We also witnessed further quantitative easing by Major developed economies which kept interest lower. It was perfect setting for Gold price to do well and it did well. In India Gold has given return of over 19 per cent since 1st January till date while Nifty Index gave 15 per cent return for the similar period. 

A conventional approach to decide whether to have gold in portfolio or not in 2011 would be to ask the question, “Will gold continue to climb next year and outperform equities in 2011?” Quest for the answer often results in confusion as one comes across conflicting views. The truth is the answer is difficult. No one knows with certainty as the gold price in 2011 will depend on future events which are very difficult to predict. 

So what shall one do in 2011? The answer is one must have some exposure (10 per cent – 30 per cent) in Gold not only in 2011 but also in 2012,13,14 and so on. Why?, because gold enhances portfolio performance. It either generates higher return for the same risk or reduce risk for expectation of same return. Let us understand how this happens. 

The Gold price tends to move many times in different direction than Indian Equity or say Nifty Index. One of the reason why it happens is because Gold and Nifty prices depend on totally different factors. Nifty index depends on factors like performance of Indian Economy, Net FII inflow, domestic money supply etc. while the gold price depends on global factors like global interest rates, quantitve easing or debasement of global currency, demand and supply of Gold etc. When there is global economic crisis the gold price strengthens and equity prices weaken. This unique characteristic of Gold is equally important for the investors. It is also called co relation. Lower the co relation of two assets, more diversification benefits the portfolio gets. The graph shown here will explain the point. 

As we can see from the graph that often Gold prices and Nifty prices went in different directions even though ultimately both have given positive returns in the end. 

The blue line in the middle is value of portfolio which has invested roughly 40 per cent in Gold and 60 per cent in Nifty. One can see that the portfolio value line is smoother than both the assets. Smoother the line lesser is the volatility or lesser is the risk. The graph clearly shows that how in 2010 adding Gold to the portfolio has lowered the overall risk for the investors.

Also 2011 will not be majorly different. As explained earlier since the driver of gold prices remain different than drivers of Nifty index, Gold is likely to behave differently than (will continue to remain uncorrelated with) Nifty. And due to this investors will gain immense diversification benefit by having gold in the portfolio or reduce risk without sacrificing the returns. 

Investment in Gold can be done very conveniently through Gold Exchange Traded Funds (ETFs). Gold ETFs are backed fully by physical gold. The Physical Gold is kept in vaults of custodians who are regulated by SEBI and RBI. The units of Gold ETFs trade on stock exchanges like any other shares and it can be held in demat account. Typically one unit represents around one gram. Gold ETFs introduced in India Since March 2007, have witnessed rapid growth since then. Gold ETFs are set to grow further as more and more investors discover benefits of investing in them.

Gartner raises global 2011 IT spending forecast

Research firm Gartner said global spending on technology is likely to rise 5.1 percent in 2011, higher than its previous estimate, as the dollar's recent weakness helped spending in 2010 top its forecast.

It now expects total global IT spending to touch $3.6 trillion this year, up from its earlier forecast for a 3.5 percent rise. For 2010, IT spending rose 5.4 percent to $3.4 trillion, up from Gartner's estimate of 3.2 percent.

"Aided by favourable U.S. dollar exchange rates, global IT spending growth is expected to exceed 5 percent in 2010, but a similar level of growth in 2011 -- while forecast -- is far from certain, given continued macroeconomic uncertainty," Richard Gordon, research vice president at Gartner, said in a note.

While the global economic situation is improving, the recovery is slow and hampered by a sluggish growth outlook in the key economies of the United States and western Europe, he said.

Also, there were growing concerns about the ability of key emerging economies to sustain relatively high growth rates, he added.

Spending on telecom equipment is set to rise the fastest at 9.1 percent in 2011 to $465.4 billion, with telecom services spending seen rising 3.4 percent to $1.65 trillion, Garter said.

The research firm forecast a 4.6 percent rise in IT services spending to $817.9 billion.

The computing hardware segment, where spending is forecast to grow 7.5 percent to $391.3 billion, is likely to face challenges in growth of personal computers due to a possible weak economic growth through the first half of 2011, Gartner added.

RIM Is Buying Sweden’s The Astonishing Tribe (TAT)

RIM, makers of BlackBerry smartphones is set to buy Sweden’s The Astonishing Tribe (TAT), which specializes in developing software that lets smart phone users personalize their device the way they like.

15% of smart phones globally use TAT software. Even Android smart phone users can make three dimensional icons on their screens by downloading this software.

It is not known yet how much RIM will pay for the Swedish software development company TAT.

Confirming the deal, David Yach, chief technology officer at RIM, said in a blog post, “Today we are pleased to confirm plans for The Astonishing Tribe (TAT) team to join Research In Motion (RIM). We’re excited that the TAT team will be joining RIM and bringing their talent to the BlackBerry PlayBook and smartphone platforms.”

He further added, “For those who don’t know, TAT is renowned for their innovative mobile user interface (UI) designs and has a long history of working with mobile and embedded technology.”

Let’s see if this latest acquisition by RIM can help BlackBerry put themselves at par with iPhone and Android phones.

Global cloud computing mkt to be worth $30bn in 4yrs: Gartner

The global market for the 'transformational' cloud computing technology is expected to be worth over $ 30 billion (around Rs 1.35 lakh crore) in the next four years, according to a senior official at research group Gartner.


Cloud computing refers to the technology, whereby entities can share resources and software on-demand through the internet.


"It (cloud computing) is an extremely attractive technology for entities. The worldwide market for this technology is expected to be over $ 30 billion by 2014," Gartner Vice-President (Research) Milind Govekar told.


Noting that developing markets such as India have an edge in adapting to cloud computing, he said that service delivery (using this technology) would be crucial.


"Companies need to embrace many changes with cloud computing and services would go through huge transformations with this technology," he added.


Govekar noted that cloud computing would be more environment friendly and efficient than many traditional technologies.


In a recent research report, he cautioned that while using cloud computing, enterprises must curb their old habits of over provisioning infrastructure.


"(This) would result in diminished resource efficiency and environmental benefits, particularly for private cloud environments," he said.

Google Earth 6 Brings Integrated Street View And 3D Trees. Yes, Trees. 80 Million Of Them!

 

There’s an easy way to tell that Google Earth is getting so advanced that it’s getting dangerously close to looking like actual Earth: touted new features are kind of humorous. While version 4 brought the sky, and version 5 brought the oceans, now version 6 is bringing trees. Yes, trees. I fully expect version 7 to highlight the addition of dirt.

Kidding aside, the latest version is obviously the best one yet. And trees are obviously a hugely important part of the Earth. To get them into Google Earth, the search giant has made 3D models of over 50 different species of trees. And they’ve included over 80 million of them in various places around the world including Athens, Berlin, Chicago, New York City, San Francisco, and Tokyo. They’re also working with some conservation organizations to model threatened forests around the world.

The other big addition to this latest version of Google Earth is Integrated Street View. To be clear, Google has had a form of Street View in Google Earth since 2008, but now it’s fully a part of the experience. This means that you can go all the way from space, right down to Street View seamlessly. That’s because Google has included their Street View mascot/button, Pegman, in the main navigation controls now. Just like in Google Maps, you just pick him up and drop him anywhere highlighted in blue, and you’ll be taken to the detailed Street View.

And you can now fully navigate the Earth using Street View in Google Earth. Simply use your keyboard or mouse to move around.

Google Earth 6 also makes it easier to discover and explore historical imagery. This feature was added in version 5, but it wasn’t easy to find. Now you’ll be able to see when it’s available right at the bottom of the screen.

Google Earth 6 would definitely be Treebeard’s favorite version of Google Earth yet. Check out more in the pictures and videos below.

Indian IT to become hot spot for M&A in 2-3 yrs: Gartner

The next two to three years could see the Indian IT sector become a hot-spot for merger and acquisition (M&A) deals. That's the word from industry body Gartner, which says the 10 deals see so far this year are just the beginning.

With 10 deals in the pocket so far this year, the Indian it sector seems to have caught the consolidation bug. And Gartner says that the next two-three years will only see this number increase. 

Gartner argues that increased competition in the sector will drive players to employ the acquisition route to expansion. And deal sizes may vary widely: from 50 million deals, to deals that cross the USD 250 million mark.

Gartner adds that the most common situation will involve an IT player looking to acquire it vendors with a complete bouquet of service offerings, and not just niche services.

Partha Iyenger, VP and distinguished analyst, Gartner said, “For an English speaking market and to some extent even a European market, India is becoming the center of gravity of that global delivery story. So they are looking for acq in India of tier 2, tier 3 providers. The second is outward M&A from India where the service providers, we've had a lull coz of recession, primarily focused on mainland Europe.”

Gartner also sees greater Indian interest from Japanese players. Reports are already doing the rounds that Japanese companies like Fujitsu, NTT and Hitachi are on the prowl for stakes in mid-cap it firms in India. Gartner says that Japanese IT firms have a limited presence in India so far, and are afraid of losing clients who are interested in growing their Indian footprint. And this will spur M&A interest from Japan.

Peter Sondergaard, Senior VP - Research, Gartner said, “We believe the Japanese providers will look at acquisitions in areas that are important to them and some of the large ones do need presence in India, so that is one area we will see acquisition.”

Deals will not be restricted to cross-border ones. Consolidation among local tier-2 and tier-3 players is also expected to pick up steam. And may even overshadow partnerships in the space.

Microsoft SharePoint: Three Deployment Challenges

Enterprise adoption of SharePoint is rapidly on the rise: A new survey from document management company Global 360 reveals that 90% of the survey's 886 respondents currently use SharePoint, with 8% using SharePoint 2010.

Moreover, 67% of those that use SharePoint spread it out enterprise-wide, indicating that SharePoint is not just for the IT department -- it's for all departments.

The survey also highlights how SharePoint is used at organizations. It commonly starts out as a content repository but then transitions to something more dynamic. Sixty-seven percent of survey respondents have extended SharePoint's use to manage document workflows; 66% use it for portal and web content management; and 56% use it to support business processes.

The idea of using content in SharePoint to improve the business is a major theme of the survey. Of the organizations surveyed, 27% say that over half of the documents stored in SharePoint are used to support mission-critical parts of the business.

But despite widespread adoption as well as improvements in search, workflow and social networking in SharePoint 2010, the SharePoint platform does come with its own set of challenges, according to the survey results.

Out-of-the-Box User Experience Not Great

Only 17.6% of survey respondents feel SharePoint delivers a great out-of-the-box user experience and adequately meets their needs. Conversely, 78% describe SharePoint as somewhat adequate to inadequate, and that it requires additional in-house design and development.

When asked what was the biggest challenge with their SharePoint implementations, 21% of survey respondents said, "lack of an intuitive, easy-to-use interface for business users."

And an inadequate user interface usually means trouble, according to the Global 360 report: "Generic user experiences often lead to slower user adoption, lower productivity by users seeking workarounds to applications that do not meet their needs, and higher costs to rollback and customize applications."

Building Business Applications Takes Time and Effort

SharePoint, particularly SharePoint 2010, has made advances in areas such as social media, offline access and better CRM and ERP integration. But according to the Global 360 report, "the gap between what has been delivered and what can be achieved is still dramatic."

How One Company Made SharePoint 2010 More Social

The IT group at tech services company Unisys has been thinking about a social networking platform for two years now.

But some recent factors finally put a plan into action: the arrival of a new CEO two years ago who believed strongly in social networking technology and the arrival of Microsoft's SharePoint 2010 with new social features.

Another motivator for Unisys, which provides various IT services for large corporations and government agencies and has over 25,000 employees worldwide, is that employees and clients have come to expect a "Facebook for the enterprise" as more people use social media outside of work.

"Employees are expecting these social tools in the workplace," says John Knab, director of IT applications at Unisys. "Our senior leadership recognized this, and wanted to apply social tools in a way that could help the business."

Indeed, Facebook-esque features like status updates, microblogs, wikis, community pages, and the ability to tag and share content are spilling into the enterprise. It can be done through corporate microblogging site Yammer and "enterprise 2.0" social software suites from vendors such as SocialText, Jive, Atlassian and NewsGator.

All of these companies' suites stand on their own but they are also compatible with Microsoft's sprawling content management platform, SharePoint.

SharePoint 2010 Better, But Not Social Enough

Microsoft, well aware that nimbler enterprise 2.0 companies are selling social software to enterprises, added more social networking features such as wikis, blogs and tagging into SharePoint 2010, released in May.

These enhancements caught Unisys's eye, a SharePoint customer for six years, and inspired an early upgrade from SharePoint 2007 to SharePoint 2010 through Microsoft's Rapid Deployment Program that began in January and wrapped up in June.

Yet although the social enhancements in SharePoint 2010 are an improvement, Unisys felt that SharePoint's MySites -- profile pages that include social networking features -- were not quite Facebookish enough, and called on enterprise 2.0 vendor and Microsoft partner, NewsGator, to fill in the gaps with more dynamic microblogging, tagging and RSS feeds.

A True Microblogging Platform

"When you get SharePoint 2010 out of the box, it does not create real microblogging. It's just a wall that doesn't broadcast out," says Unisys Community Manager Gary Liu.

Help Improve Ubuntu on 'Bug Day'

By helping to triage reported bugs, even nontechnical users can participate in making the open source Linux software better. 

One of the great strengths of open source software is that it is continuously being scrutinized and improved by users and developers around the world.

Ubuntu, for example, has a global community of participants who are constantly working to make the Linux distribution better by contributing to the development, design, debugging, documentation, support and other aspects of work on the free and open source operating system.

Today, there's a global online event planned in which anyone can donate a little bit of their time to improving Ubuntu. It's called Ubuntu Bug Day, and it's a great opportunity for users and fans to get involved and contribute to the operating system--no training or experience required.

Bug Triage

Ubuntu Bug Days are actually regular events in the Ubuntu world, and they typically take place on a dedicated Internet Relay Chat (IRC) channel called #ubuntu-bugs.

To join a Bug Day, you'll need client software designed for IRC; many options for various operating systems are available for free download. The IRC section of Ubuntu's online documentation lists several possibilities, but if you use a recent version of Ubuntu, Empathy is the default.

On average, more than 1,800 Ubuntu bugs get reported every week, and the primary task on Ubuntu Bug Days is to "triage"--or classify--those reports so that they can be addressed as quickly as possible. Much the way emergency-room patients get triaged the minute they walk in the door so that they'll get what they need as soon as possible, so bug reports are subjected to a similar categorization process.

Individual Bug Days typically focus on triaging a specific category of bug reports, and today it's bugs for which no associated package was listed in the original report. So, those participating in today's Bug Day will be going through bug reports that don't list which software package is affected, and then adding that information. Once that's done, the bug reports can be forwarded on to the appropriate place for fixing.

Open Source's 'Killer App'

5 Keys for Full Recovery in the Cloud

The cloud is a natural solution for disaster recovery, but careful consideration must be given before entrusting your data to a sky-high backup repository. Can you recover workloads from the cloud? How well does it scale? What's the nature of its billing system? Is its infrastructure secure? And will it offer complete protection?

While cloud computing is a familiar term, its definitions can vary greatly. So when it comes to online backup, the cloud is an important feature that can play a large role in securing and protecting during a disaster, which I like to refer to as "cloud recovery."

In order to be worthy of this cloud recovery title, a solution should have the following five features, which I have outlined below. 

1. Recover Workloads in the Cloud

There is an old saying in the data protection business that the whole point of backing up is preparing to restore. Having a backup copy of your data is important, but it takes more than a pile of tapes (or an online account) to restore. You might need a replacement server, new storage, and maybe even a new data center, depending on what went wrong.

The traditional solutions to this need are to either keep spare servers in a disaster recovery data center or suffer the downtime while you order and configure new equipment. With a cloud recovery solution, you don't want just your data in the cloud -- you want the ability to actually start up applications and use them, no matter what went wrong in your environment.

2. Unlimited Scalability

If you were buying disaster recovery servers for yourself, you would have to buy one for each of your critical production servers. The whole point of recovering to the cloud is that they already have plenty of servers.

The ideal cloud recovery solution won't charge you for those servers up front but is sure to have as much capacity as you need, when you need it. Under this model, your costs are much lower than building it yourself, because you get the benefit of duplicating your environment without the cost.

3. Pay-Per-Use Billing

I love pay-as-you-go business models because they force the vendor to have a good product. Plus, this make the buying decision much easier -- just sign up for a month or two (or six), and see how it goes.

Removing the up-front price and long-term commitment shifts the risk away from the customer and onto the vendor. The vendor just has to keep the quality up to keep customers loyal.

We also know that data centers are more cost-efficient at larger scale, especially the management effort, and they require constant improvement. In your own data center, you might have some custom configurations, but in the data recovery data center, you just need racks, stacks of servers, power and cooling. You are much better off paying a monthly fee to someone who specializes.

4. Secure and Reliable Infrastructure

Lots of people like to bash cloud providers for security and reliability, but I think they hold the providers to the wrong standard. Although it is fine, in the abstract, to point out all the places where cloud providers don't achieve perfection in security and reliability, as a customer evaluating a cloud vendor, it seems better to compare them to your own capabilities.

I believe that most of the major cloud providers' infrastructures are more secure and more reliable than those of most private data centers. The point is that security and reliability are hard, but they are easier at scale. Having control over your own data center isn't enough -- you also have to spend the money to buy the necessary equipment, software, and expertise. For most companies, infrastructure is a necessary evil. Companies like Amazon and Rackspace do infrastructure for a living, they and do it at huge scale. Sure, Amazon's outages get reported in news, but do you think you can outperform them over the next couple of years?

5. Complete Protection

Remember the "preparing to restore" line? For me, it really comes home in this idea of complete protection. If your backup product asks you what you want to protect, I am already suspicious. My vote is, "get it all." I see lots of online products offering 20GB plans, and to me, they look like an accident waiting to happen. I don't want to know which files I need to protect -- I want to click "start" and know that any time I want, I can click "recover", and there won't be any "please insert your original disk" issues.

The places people normally get bitten by this are with databases (do you have the right agent?), configuration changes (patched your server, or added a new directory of files?), and weird applications (the one that a consultant set up, and you don't really understand how it works). Complete protection means that all of these things can be protected without requiring an expert in either your own systems, or with the cloud recovery solution.

Technology Is Only Part of Disaster Recovery Planning

Having the right technology in place is only one part of an effective disaster recovery plan. What's too often overlooked are people and facilities. If a disaster should strike, it's vital that important data can be saved, but complete recovery planning will take into account that people will need to go to their homes or to other offices and facilities to resume normal operations.

 

Every server must be accounted for, protected, backed up and ready to be brought back online if they lose the physical site that hosts the production system. The problem is that this approach leaves out two-thirds of the total DR planning that the modern organization must do in order to survive a site disaster. Technology is not a small part of your IT DR planning, but it is only one part.

When approaching DR planning, think of it as a trinity of concerns. First you have the technology, which most companies plan for in some way. Secondly, you have people. Your employees that use the data systems have to be taken into consideration. Third, you have facilities -- after all, you do need someplace to house the technology and personnel. 

Technology and People

Technological resiliency is a theory that IT shops deal with daily. They know how the servers are backed up or replicated (most times, both). They know how they'll perform which operations during a restoration and/or failover procedure. While testing DR technology plans still happens woefully infrequently, the planning itself is handled in the majority of businesses these days.

People, on the other hand, are often ignored. Companies plan how all their vital data systems will fail over within minutes to another location, but don't know what to do with the employees who are sitting in the same building as the failed servers. Even if it was something as simple as a bandwidth failure that caused the failover to happen, the users who would normally connect over that same bandwidth are now twiddling their thumbs.

Complete DR planning will take into account that people will need to go to their homes or to other offices and facilities to resume normal operations. They may need VPN connectivity or remote desktop (terminal services) systems in place to allow them to access their applications when their desktops are no long accessible.

They'll also need some method to keep connected to the DR planners so they can be alerted as to where to go and what to do in order to get back online. How will you send a company-wide email when no one in the company can access the email systems? Smartphones may help, but most organizations don't use smartphones for every employee impacted by the disaster. Telephone lists, websites and other tools can help get the word out and get personnel where they need to be. Just make sure that employees are trained on where to look for information well in advance of any disaster.

Whatcha Gonna Do?

Speaking of getting people where they need to be, ensuring that they have somewhere to be is a critical part of the plan. If your DR plan calls for servers to be brought up in a hosted facility, where will your users sit to access those systems? Do you have other offices, or can you rent space at a temporary facility? Where will your clients come to do business with your company, and how will the find you?

While many businesses have embraced the digital age, there are far more who cannot do all of their business virtually. Temporary office space, call centers, phone lines and fax facilities must be planned for well in advance of a disaster. You might also need to arrange transportation and even temporary lodging if critical employees will need to travel in order to reach this new facility. Keep in mind that a single method of travel is just as much of a single point of failure for your DR plan as a single server is.

As you can see, IT DR planning is a large component of a well-rounded DR plan, but it is an invitation for creating a secondary disaster for your business if it is done alone. A true and complete DR plan will allow for people, facilities and technology (think "People, Places and Things") before you're done. Plan for all three effectively, and you will be able to handle disasters on many different levels without fail.