Indian information technology company

Healthcare regulatory reform in America might prove another Y 2 K opportunity for the Indian information technology sector, the latter believes. Infosys, Tata Consultancy Services (TCS), HCL Technologies and Wipro are among those looking at healthcare with a new focus. Their largest revenue contributor till now, banking and financial services in india, is under pressure. Analysts estimate the United States of America healthcare market at $2.5 trillion and projected to grow to $4.6 trillion by 2020. The information technology outsourcing opportunity is expected to be around $24 billion, including both payer and providers, over the next four to 5 years. Analysts predict the next 2 years will see Indian information technology company target the segment for mergers and acquisition in industry. In the immediate time frame, the opportunity lies in the change of coding systems the United States of America healthcare segment needs to undergo. According to a mandate passed by the United States of America Centre for Medicare and Medicaid Services, the coding system for billing medical procedures has to move from the World Health Organisation’s ICD-9 to ICD-10 diagnostic classification by October 1, 2013. This alone is an opportunity upwards of $1 billion, say information technology industry sources.

Like this to a Deloitte report, ICD-10 implementation has the potential to overtake Y 2 K (the Year 2OOO problem, also known as the Millennium Bug, when computer programmers had to be redone to get over a coding problem) in terms of effect and cost. “It will require a massive wave of system reviews, new medical coding or extensive updates to existing software, and changes to many system interfaces. Because of the complex structure of ICD-10 codes, implementing and testing the changes in electronic medical records, reporting packages, billing systems, decision and analytical systems will require more effort than simply testing data fields. It will involve installing new code sets, training coders, re-mapping interfaces and recreating reports/extracts used by all constituents who access diagnosis codes,” said the report. While many have presence in the healthcare segment, its revenue contribution is still in single digits. The only company that has been ahead in this is Nasdaq-listed Cognizant. One reason for Cognizant's fast pace of growth is its focus on the healthcare segment; Cognizant's contributes 27 per cent to the firm’s revenue and grew 38 per cent for 2011, more than the company’s growth rate. Meanwhile, behemoths like TCS, Infosys and Wipro still have their revenue in the single digit range.

For the quarter ended December 31, 2011, healthcare contributed 5.3 per cent to TCS revenue (it also includes life science), Infosys’ share was 1.8 per cent and Wipro’s (including healthcare with life science and services) was 10 per cent. HCL’s healthcare division contributed 8.6 per cent to revenue. But all this might change over the next one to 2 years. “In the last three quarters, we have seen interest in the US healthcare market by Indian companies steadily increase. Most large Indian outsourcers are now seriously evaluating targets across both the healthcare payer and provider segments. Large Indian outsourcers are looking for acquisition targets with revenue greater than $50-100 million. Specifically, Indian companies have asked us to look for US companies with strong healthcare domain expertise and marquee clients,” said Mr.NirishMathia, managing director, Technology Holdings.

According to a Technology Holdings survey, US healthcare had seen around 100 deals in the past 25 months, an average of four deals per month, aggregating $20 billion. The US healthcare payer business process outsourcing (BPO) market was $1.2 bn in 2011, and will continue to grow at a 15-20 per cent compounded annual rate (CAGR) over the next three years. A Technology Holdings survey says the payer outsourced services market will grow nine per cent CAGR to reach nearly $15 bn by 2016. “But there are challenges. You cannot offshore what a hospital does. Onshore presence is crucial. Two, Indian companies are keen to acquire, but valuations are steep,” said Mr.MilanSheth, partner and technology sector leader, Ernst & Young.

Fragmented market

The US healthcare segment is divided into two parts. The payer segment focuses on services like insurance and the provider segment involves players like physicians, hospitals, hospital chains, etc. It is estimated the payer segment already uses the outsourcing model. Industry sources said in some cases the promoters had asked for 20 times their earnings before interest and tax. Mr.MilanSheth also says the US healthcare market is fragmented. “The top three players cater to only 20 per cent of the IT market,” he added. HCL Tech has, in recent times, signed a couple of deals in this segment. It says some are related to the ICD-10 conversion. “Each of these deals will start from $250,000 to $10 million,” adds Nair. For HCL, the healthcare vertical grew 55 per cent last year. Recently the company announced a deal with Blue Shield of California for transitioning to ICD-10.

Cloud computing services

Fast Growing IT Service, Cloud computing has been around for decades, better known as IT services in the earlier avatar, but have never seen the growth it is experiencing today, backed by key advances in technology, which makes this area of computing the key to improving business agility and increase everyone’s access to Cloud computing. It has been widely hailed as one of the most important Cloud computing trends of all times; being called as the “foundation for the technology industry’s next 20 years of growth” by research Group IDC. According to 2011 Global Information Security Survey (GISS) conducted by Ernst & Young, 61 per cent of respondents are currently using, evaluating or planning to use cloud computing-based services within the next year indicating an increasing focus on adoption of cloud computing. What really has propelled this sudden interest of everyone towards this aspect of cloud computing is the widespread availability of high speed internet services, and significant reduction of data storage cost, which in turn has ensured that service providers can finally build infrastructure and applications to meet the buyers’ need for simplicity, Product cost and with greater flexibility.

In this services, rapid advent of cloud in almost all spheres of computing is benefitting both side business and individual consumers. For business organizations, it means significant cost savings coupled with greater flexibility, as they can pay-as-per-use and scale up or down with ease when they need. Organizations no longer need to build and maintain in house IT infrastructure, they can simply focus on value creating differentiation to ride atop that infrastructure. For individual consumers, almost all aspects of their daily lives are being touched by the access made easy by the recent proliferations of smart handheld wireless computers — application functionality to which is provided by the cloud computing. It has the potential to instantly deliver simple, easy-to-use, Easy to maintain, sophisticated and high-powered computer applications and information that consumers could not otherwise access. With the adoption of cloud computing services becoming more widespread, the enhanced business agility is likely to lead to an increasing pace of change for all industries worldwide.

Cloud-computing-services are available across the entire computing IT Industry; 3 primary service models defined by the US National Institute of Standards and Technology are providing infrastructure as a service, platform as a service and software as a service. Hybrid models are also emerging gradually; for instance, some components of the above three can be combined to offer an entire business process as a service. According to the 2011 GISS survey conducted by EY, more than 1/2 of the respondents have done almost nothing to mitigate new or increased challenges related to the use of cloud computing. As mainstream adoption of cloud services begins in earnest, there is a multitude of factors that cloud service computing providers (CSPs) and cloud computing users must carefully consider; some of which are mentioned below.

Cloud computing Pricing and business models : The most compelling reason for most businesses to consider changing to a new approach, and adopt cloud computing services, is the cost advantage they stand to have — not just resulting in spending lesser than what they are spending today in the could computing services, but in the spending being significant enough for them to take the “cloud” plunge. But the business models in cloud computing are not often simple. The much advertised “pay only for what you use” as a flat-rate subscription fee per used or pay-as-you-go usage fee for precisely defined service levels, appears to be far more complex as you dig deep. For the CSP to determine the right price points, a thorough analysis encompassing the full range of costs necessary to sustain the services over long term is required (including aspects like upgrades, maintenance, capacity planning and incorporating innovative new technology in it industry). They then need to articulate to potential customers how they create tangible economic value compared with the customer’s existing models. As it’s a relatively new market, not many service providers have experience with pricing of cloud computing business models yet, and hence more changes are likely to happen in pricing models for cloud computing services in times to come in IT industry.

Could services Vendor management and strategic sourcing : Moving to cloud computing services comes coupled with challenges of vendor management as organizations lose some control and are not able to have a transparent view of the infrastructure at CSP’s end. Deciding what all to put on cloud computing is also based on concerns around data security, privacy and compliance, as well as on what application functionality can be easily extracted from the rest of enterprise architecture in Cloud Computing. Strategic sourcing decisions need to be constantly revisited, as maturity levels evolve, as will organizations’ needing to lay emphasis on shift focus from having technical experts to having people more skilled at managing vendor relationships in Cloud Computing.

Could services Availability and interoperability : Matching the availability and interoperability attributes of a CSP, diligently, to the requirements of an organization’s business is imperative to achieving the promised benefits to switching over to the cloud systems. While availability challenges are easier to manage, addressing interoperability (enabling processes from different IT systems to work collaboratively or to share data systems) will pose formidable challenges as seen in the past, and will remain the make-or-break factor in many cloud Computing migration decisions.

Cloud Computing Security is extremely difficult for organisations to forgo control of the security of their IT infrastructure; a fact corroborated by various surveys. A Group of research survey of North American and European businesses found 50 per cent respondents mentioning security concerns as their chief reason for avoiding cloud computing System. Organisations looking at adopting the cloud computing should undertake a thorough diligence of their approach matching their risk posture, as well as security requirements to the risk posture, service level agreements and demonstrated capabilities of the services provider. A Group Research projects that within five years Cloud Computing security will become one of the prime drivers for adopting cloud services. The reason for the shift of security from concern to driver is that CSPs are expected to invest far more in the development of Cloud security infrastructure and expertise than any typical enterprise.

Standards and risk management In Cloud Computing : Relinquishing control is linked with adding a bit of risk to the current situation In cloud services, hence for organizations looking at cashing in on the opportunity by adopting cloud Computing, the associated risks need to be carefully managed. Data (data storage) security and privacy breaches, as well as regulatory and legal compliance, are the areas which undergo most changes from a risk management perspective while moving to cloud Computing services. Cloud computing being a relatively recent phenomenon, development of standards for the cloud Computing is underway, and the risk management will ease out for CSPs as well as their users, once such standards are in place. Currently in cloud computing, efforts to address risk management are disjointed and inconsistent as there are no definitive standards — no agreed upon baseline. Cloud Computing service Users presently are turning to standards originally created for different purposes; most CSPs have developed their technologies adhering to such prior standards in areas such as security, networking and protocol standards.

Government Use Cloud Computing Services : Cloud computing is also getting adopted widely by governments worldwide for their own use — for pretty much the same advantages as are sought by the private organizations — lower cost in services, increased agility, reduced energy consumption, and increasing access to cloud computing services. However, for governments, concerns about security, privacy and data location are of paramount importance and hence CSPs need to be extra cautious about handling these concerns while doing business with the government. Another key aspect that CSPs need to consider carefully is the organisations’ capability to adapt to changes which are frequently happening in the cloud ecosystem, it being an evolving field; whereas governments are not known to be early adapters to change. Another important priority for the governments is to be able to switch vendors if required, which makes the establishment of interoperability standards in cloud an imperative.

Accounting : The cloud computing services delivery model which allows fast and easy way to integrate applications, platforms and infrastructure, gives rise to practical complexities in accounting for cloud computing services transactions, which often creates accounting challenges for CSPs, particularly around revenue recognition and the treatment of certain costs. Revenue recognition needs to be carefully contemplated by the CSPs, aiming to make it more predictable (as is the case with more long service contracts), in turn making forecasting and revenue expectations easier in cloud computing services.

Cross-border taxation of CSP arrangements : As multinationals respond to their customers’ requests for global service delivery, cloud computing services models will play a critical role in how these companies build their service delivery models. Such models are ensuring global service delivery by CSPs, but the world’s taxing authorities have not evolved a definitive model for its taxation. Most jurisdictions, to date, view CSPs as the responsible party for tax purposes regardless of any arrangements struck between CSPs and their users. A complete range of tax implications for CSPs will continue to evolve and more clarity around this will emerge in times to come.

Regulatory and privacy compliance : As cloud services often strive to be borderless, potentially material compliance issues with respect to the national regulatory frameworks cloud computing, especially regarding privacy and data location, can arise for users of cloud computing services. A research group survey of North American and European businesses found 77 per cent respondents believing in cloud making privacy protection more difficult. Beyond data protection security, the core privacy problem for enterprise businesses adopting cloud computing system from the diversity of privacy regulations from country to country.

Industry specific compliance requirements such as Health Insurance Portability and Accountability Act, Payment Card Industry Data Security Standard, etc may also require special arrangements between cloud services users and their CSPs. CSPs should approach compliance as a potential competitive advantage; whereas cloud computing services users should do their due diligence to determine what contractual commitments, regulatory requirements and what technical capabilities and services support a CSP offers — and how User can be monitored. Some predict the creation of specialized “compliant clouds” that services will offer certified compliance with specific regulations for different industries and countries, including a guarantee to store and manage data within the borders of a given nation, as appropriate. As the cloud computing system model becomes mainstream, higher level cloud services, that is, business process as a service will evolve. The potential of cloud computing to transform the business enterprise is increasing as cloud computing services gains traction with a variety of organizations and user groups across the globe. Treading the next few years cautiously, and taking definitive steps post a careful consideration of the factors outlined above, will truly determine how much impact the “cloud Computing” will have on businesses and users globally.

3G technology

Consumers planning to pre-order (pre launch) new iPad to avoid the release-day crowds at the company's retail stores will have to wait a little longer to get their hands on one of the devices. The latest version of the company's tablet, which was unveiled on Wednesday, is scheduled to hit shelves on March 16. But tablets pre-ordered online won't ship to buyers until March 19, according to the company's website. The Wall Street Journal reported in Saturday's edition that Apple's website had earlier promised the newest tablet would arrive at customers' homes on the launch date. Apple did not immediately respond to a request for comment. Apple's new product releases are some of the hottest events on the tech calendar, scrutinized by investors, the media and industry insiders alike. To the company's hard-core fans, who vie to be the first to own the latest device, a three-day delay would be an eternity and could add to the crowds and chaos at the company's retail stores. In January, enraged Chinese shoppers pelted Apple's flagship Beijing store with eggs and shoving matches broke out with police after customers were told the store would not begin sales of the Apple Inc's iPhone 4S as scheduled. The new Apple Inc's iPad sports a crisper display and an array of technology advances and tweaks. Apple said it will continue to sell the Apple Inc's iPad 2 but dropped its price by $100. The older tablet now starts at $399 while the new third-generation wi-fi only Apple Inc's iPad starts at $499. The high-end model of Apple's latest iPad starts at $629 and will be capable of operating on a high-speed 4G "LTE," or Long-Term Evolution, network. At speeds roughly 10 times faster than current 3G technology, that may help banish the sometimes shaky video quality of older devices.

communications service providers

Alcatel-Lucent tackles the capacity crunch caused by the rapid growth in video

As communications service providers face the increasing challenge of a network capacity crunch due to the demands of smart phone ownership and growing video traffic, Alcatel-Lucent (Euro-next Paris and NYSE: ALU) is introducing the Photonic Service Engine (PSE), a new chip for fiber optic networks that offers double the capacity, and four times the speed of today's networks. Built on innovations from Bell Labs, the Alcatel-Lucent Photonic Service Engine supports 400 gigabit per second (4OOG) data transmission speeds on optical networks. The unabated growth of broadband, mobile data and cloud-based services has presented a major challenge for service providers that need to find ways to keep costs in check while dramatically expanding the capacity of their networks. The Photonic Service Engine will bring substantial improvements to 100G coherent optical networks, which are being deployed by operators today. The PSE also lays the foundation for the smooth migration to 400G networks in future. "Speed is a factor for all service providers today: the speed of the network and the speed with which new services can be brought to market," said Mr. Keiichi Maki-zono, Corporate Officer, Deputy Unit Head, Technology Unit & Division Head, Network Division, SOFTBANK TELECOM in Japan. "With millions of people looking to us to access the full range of online content, we see Alcatel-Lucent's 400G innovation as the gateway to a long, successful future."

"Alcatel-Lucent’s next generation coherent optical engine exemplifies the coupling of Bell Labs advanced research and the company’s 100G commercial market experiences," said Sterling Perrin, Heavy Reading Senior Analyst. "The PSE may well be the first commercial 4OOG chip, but, just as significantly, it will improve the economics and performance of 1OOG systems - broadening and accelerating 100G market adoption." Alcatel-Lucent is the clear leader in the market for 100G optical solutions, with 69 percent market share according to the report "OVUM: High-Speed Optics: Global 40G/100G Market Outlook, January 2012." The versatile 400G PSE chip can be deployed in a broad range of network configurations - from metro to regional to ultra-long haul - and transmit wavelengths over existing or new photonic lines. It is designed specifically for use in a family of line cards in the industry-leading Alcatel-Lucent 1830 Photonic Service Switch (PSS), used today in over 120 networks around the world. It enables more than 23 Terabits of traffic to be transmitted along a single optical fiber and further enhances performance by more than 50%, while reducing power consumed per gigabit by a third. The PSE is highly configurable, giving operators enormous flexibility to adjust the appropriate optical parameters to produce the best performance for varying conditions in the field.

James Watt, president of Alcatel-Lucent's Optics Division, said: "From the start we correctly identified the challenges presented by 1OOG transport, applied the correct technology solution and commercialized it, a decision supported by the deployment of our solution with more than 55 customers worldwide. The introduction of the Alcatel-Lucent 400G Photonic Service Engine is the latest example of how we are continuing to develop leading technology and leverage innovations from Bell Labs to redefine 'state-of-the-art' in optical networking and keep our customers ahead of the game." Recently, the technology behind the chip was put to the test when Deutsche Telecom's Innovation Laboratories (T-Labs) and Alcatel-Lucent Bell Labs broke a transmission distance record on optical networks, doubling transmission capacity by employing the same process that sits at the heart of the Alcatel-Lucent PSE. "Together with our technology partner Alcatel-Lucent and the experts at Telekom Network Production, we are very proud of having attained this tremendous transmission performance over the Internet under real-world conditions," said T-Labs Manager, Heinrich Arnold. "With them, we have successfully developed an innovative method by which the transmission capacity of optical fiber can be increased significantly in network operation." The 1830 PSS, which is powered by the Photonic Service Engine, is a key element of the Alcatel-Lucent High Leverage Network™ (HLN) architecture, which is designed to provide massive capacity while slashing transport costs and dramatically reducing operational complexity in core networks.