Country's energy shortfall could dampen projections that data center industry could double in the next two years.
The biggest challenge to India's booming data storage industry is the country's energy shortfall, according to a new report by research firm Gartner.
Total data center capacity in India is expected to reach 5.1 million square feet by 2012, representing 31 percent growth from 2007 to 2012. And within the next two years, the industry is projected to double, the report said.
That growth is being driven by demands of the financial, telecom, manufacturing and service sectors.
In the long run, India has the potential to become a hub for data centers for the Middle East, East Africa and Southeast Asia.
Storage demand has increased from one petabyte in 2001 to 34 petabytes in 2007, said Nareshchandra Singh, principal research analyst for Gartner.
However, India's estimated 15-percent energy shortfall has already affected data centers in Delhi, Mumbai and Bangalore, he said 15 percent to 17 percent energy shortfall during peak demand (see India to remove cap on wind incentives).
"The biggest challenge is the concern about a lack of energy supplies in the country," Singh said.
Gartner recommended that Indian companies incorporate virtualization and other energy-savings measures (see Data centers: $7B in annual energy costs). The report also suggested combined heat and power technologies, also known as cogeneration, for the simultaneous production of electricity and useful heat from a single fuel source, such as natural gas, biomass, biogas, coal, waste heat or oil.
"Setting up energy-efficient data centers is critical," Singh said. "The Indian government’s efforts to harness alternative sources of energy such as solar, wind and water will also play a crucial role in supplying the ever-increasing energy demands of the local data center market."
Source: http://www.cleantech.com/
Monday, December 29, 2008
Gartner Says Data Center Capacity in India to Surpass 5 Million Square Feet by 2012
India Has the Potential to Emerge as the Hub for Data Center Hosting for Nearby Markets Such As the Middle East, East Africa and Southeast Asia in the Long Term
The total data center capacity in India is expected to reach 5.1 million square feet by 2012 and is projected to grow 31 percent from 2007 to 2012, according to Gartner, Inc. The data center industry in India is expected to double its capacity in the next two years, and captive and hosted data centers capacities will grow at comparable rates. In the long term, India has the potential to become a hub for data center hosting for nearby markets such as Middle East, East Africa and Southeast Asia. There is enough capacity and diversity of network connectivity to these regions to allow applications to be managed out of India.
“There has been a significant increase in storage demand in India, growing from one petabyte in 2001 to more than 34 petabytes by 2007, thereby increasing the data center uptake in companies”, said Mr. Nareshchandra Singh, principal research analyst, Gartner. “The potential for Indian data centers is large with the external-controller-based (ECB) market expected to grow by more than 22 percent in 2008, making India the fourth-largest market for ECB storage in the Asia/Pacific region”.
Data center growth will be driven by increasing domestic requirements from sectors such as financial institutions, telecom operators, manufacturing and services. While large financial institutions and telecom companies are likely to build data centers for hosting their growing data storage needs, data center hosting providers will also put significant investments into growing their capacities to fulfill demand arising from small and midsize users. (See Table 1).
Table1: Data Center Space Forecast for India (Square Feet in Thousands)
2007 2008 2009 2010 2011 2012 CAGR (2007 to 2012)
Captive* 726 1,209 1,723 2,145 2,391 2,571 29%
Hosted* 611 1,090 1,749 2,108 2,371 2,573 33%
Total 1,337 2,299 3,472 4,252 4,762 5,143 31%
*Note: Only facilities with gross space capacity of and above 1,000 square feet are included. Captive data centers include those being outsourced to system integrators (SIs).
The growth in storage demand has resulted in existing data center capacities being fully utilized and, consequently, the need has arisen to build significantly more capacity. Companies are also investing in additional data centers to enhance or meet disaster recovery and business continuity requirements.
However, the development of data centers in India faces a few major obstacles, including security concerns and data retention worries. “The biggest challenge is the concern about a lack of energy supplies in the country,” said Mr Singh. “Even several Tier 1 cities, such as Delhi, Mumbai and Bangalore, have experienced several power blackouts each year. This can become a serious issue as data center energy requirements in India continue to grow with the rapid implementation of high-density equipment”.
Gartner recommends that Indian companies building data centers need to incorporate innovative designs and adopt the concept of Green IT and virtualisation technologies. For example, new data centers should use combined heat and power technologies, also known as cogeneration, for the simultaneous production of electricity and useful heat from a single fuel source, such as natural gas, biomass, biogas, coal, waste heat or oil. Cogeneration not only is fundamentally more efficient than traditional power generation, but also has the potential of pulling in the heat generated from solar energy. Companies that adopt these technologies and processes at the outset will attain the highest level of energy efficiency.
The ‘Green IT’ agenda is gaining momentum in India and it has attracted private and government funding. Investing in Green IT provides two distinct benefits to the companies, namely; brand value as an environmentally friendly company and the significant reduction in the energy cost component of the IT budget. “Setting up energy-efficient data centers is critical. The Indian government’s efforts to harness alternative sources of energy such as solar, wind and water will also play a crucial role in supplying the ever increasing energy demands of the local data center market. Around 30 percent of energy coming from solar power for mid-size data centers of around 10,000 square feet within the next four years should be the government’s goal,” said Mr. Singh.
Source: Gartner
The total data center capacity in India is expected to reach 5.1 million square feet by 2012 and is projected to grow 31 percent from 2007 to 2012, according to Gartner, Inc. The data center industry in India is expected to double its capacity in the next two years, and captive and hosted data centers capacities will grow at comparable rates. In the long term, India has the potential to become a hub for data center hosting for nearby markets such as Middle East, East Africa and Southeast Asia. There is enough capacity and diversity of network connectivity to these regions to allow applications to be managed out of India.
“There has been a significant increase in storage demand in India, growing from one petabyte in 2001 to more than 34 petabytes by 2007, thereby increasing the data center uptake in companies”, said Mr. Nareshchandra Singh, principal research analyst, Gartner. “The potential for Indian data centers is large with the external-controller-based (ECB) market expected to grow by more than 22 percent in 2008, making India the fourth-largest market for ECB storage in the Asia/Pacific region”.
Data center growth will be driven by increasing domestic requirements from sectors such as financial institutions, telecom operators, manufacturing and services. While large financial institutions and telecom companies are likely to build data centers for hosting their growing data storage needs, data center hosting providers will also put significant investments into growing their capacities to fulfill demand arising from small and midsize users. (See Table 1).
Table1: Data Center Space Forecast for India (Square Feet in Thousands)
2007 2008 2009 2010 2011 2012 CAGR (2007 to 2012)
Captive* 726 1,209 1,723 2,145 2,391 2,571 29%
Hosted* 611 1,090 1,749 2,108 2,371 2,573 33%
Total 1,337 2,299 3,472 4,252 4,762 5,143 31%
*Note: Only facilities with gross space capacity of and above 1,000 square feet are included. Captive data centers include those being outsourced to system integrators (SIs).
The growth in storage demand has resulted in existing data center capacities being fully utilized and, consequently, the need has arisen to build significantly more capacity. Companies are also investing in additional data centers to enhance or meet disaster recovery and business continuity requirements.
However, the development of data centers in India faces a few major obstacles, including security concerns and data retention worries. “The biggest challenge is the concern about a lack of energy supplies in the country,” said Mr Singh. “Even several Tier 1 cities, such as Delhi, Mumbai and Bangalore, have experienced several power blackouts each year. This can become a serious issue as data center energy requirements in India continue to grow with the rapid implementation of high-density equipment”.
Gartner recommends that Indian companies building data centers need to incorporate innovative designs and adopt the concept of Green IT and virtualisation technologies. For example, new data centers should use combined heat and power technologies, also known as cogeneration, for the simultaneous production of electricity and useful heat from a single fuel source, such as natural gas, biomass, biogas, coal, waste heat or oil. Cogeneration not only is fundamentally more efficient than traditional power generation, but also has the potential of pulling in the heat generated from solar energy. Companies that adopt these technologies and processes at the outset will attain the highest level of energy efficiency.
The ‘Green IT’ agenda is gaining momentum in India and it has attracted private and government funding. Investing in Green IT provides two distinct benefits to the companies, namely; brand value as an environmentally friendly company and the significant reduction in the energy cost component of the IT budget. “Setting up energy-efficient data centers is critical. The Indian government’s efforts to harness alternative sources of energy such as solar, wind and water will also play a crucial role in supplying the ever increasing energy demands of the local data center market. Around 30 percent of energy coming from solar power for mid-size data centers of around 10,000 square feet within the next four years should be the government’s goal,” said Mr. Singh.
Source: Gartner
Tuesday, December 16, 2008
Top 10 CIO challenges/technologies for 2009
Top 10 CIO challenges for 2009:
* Budgeting and ROI
* Keeping operating costs in check without compromising on quality
* Recruiting the employees with right skill sets without affecting OPEX
* Scalability and futuristic architecture with less dent on CAPEX
* Enterprise data protection/Privacy
* Remote management and high uptime even in remote locations
* Assessment, partnering and implementation
* Consolidating common IT business/mission functions
* Unifying disparate systems across similar business lines
* Integrating legacy applications
* Budgeting and ROI
* Keeping operating costs in check without compromising on quality
* Recruiting the employees with right skill sets without affecting OPEX
* Scalability and futuristic architecture with less dent on CAPEX
* Enterprise data protection/Privacy
* Remote management and high uptime even in remote locations
* Assessment, partnering and implementation
* Consolidating common IT business/mission functions
* Unifying disparate systems across similar business lines
* Integrating legacy applications
Saturday, December 13, 2008
Green IT technologies gaining popularity in Asia Pacific
Analyst firm IDC has found that Green IT technology is gaining strong momentum and mindshare across the region.
IDC announced as part of the results it obtained in a survey on power management, automation and virtualization in data centers. amongst data center managers in the Asia Pacific region, excluding Japan (APEJ).
According to IDC, the survey of nearly 600 respondents, found that Green IT technology is gaining strong momentum and mindshare across the region as rising power costs in datacenter operations are becoming a top concern of IT decision makers. In the report IDC said that applications that can help to better manage power and cooling and improve management, automation, load and capacity administration of these servers, will be in demand. IDC has classified these applications into three main categories: power monitoring and management tools, asset management and automation tools, and server virtualization software. IDC says that Green IT software can enable significant economical benefits as well as environmental sustainability through the efficient management of existing hardware or services within data centers.
More than 75% of respondents in the survey said that their decision to implement green solutions is largely driven by benefits from cost savings, followed by corporate social responsibility (CSR) and compliance. "As businesses in APEJ continue to grow, power consumption in energy hungry datacenters also increases. Green IT technologies has become even more appealing as businesses look towards energy efficient solutions to reduce power consumption and to alleviate the costs," says Adren Lim, Market Analyst of IDC’s Asia/Pacific Software Research.
The report also found that software was playing an increasingly important part of an attempt to green a data center saying that, "...While mainstream green IT in the data center is largely a combined effort of more energy-efficient hardware, best practices, and consultation services, software is playing an increasingly important role in facilitating the whole "green engine" to achieve business and environmental sustainability".
"A large portion of Green IT practices and supporting software revolve around virtualization products, but equally important, is the management of these consolidated virtual and physical assets that will bring value through lower power, hardware, and manpower costs," Lim added.
When asked if businesses were adopting Green IT solutions because of or despite of the economic downturn, Lim said, "Green IT has been gaining good mind share in APEJ even before the downturn and is poised to become the next big trend. The current economic climate should further accelerate the cost saving advantages Green IT can offer". He adds that it is good to bear in mind that this report looks at Green IT only from the software perspective, which is a component within the whole "green" engine.
IDC announced as part of the results it obtained in a survey on power management, automation and virtualization in data centers. amongst data center managers in the Asia Pacific region, excluding Japan (APEJ).
According to IDC, the survey of nearly 600 respondents, found that Green IT technology is gaining strong momentum and mindshare across the region as rising power costs in datacenter operations are becoming a top concern of IT decision makers. In the report IDC said that applications that can help to better manage power and cooling and improve management, automation, load and capacity administration of these servers, will be in demand. IDC has classified these applications into three main categories: power monitoring and management tools, asset management and automation tools, and server virtualization software. IDC says that Green IT software can enable significant economical benefits as well as environmental sustainability through the efficient management of existing hardware or services within data centers.
More than 75% of respondents in the survey said that their decision to implement green solutions is largely driven by benefits from cost savings, followed by corporate social responsibility (CSR) and compliance. "As businesses in APEJ continue to grow, power consumption in energy hungry datacenters also increases. Green IT technologies has become even more appealing as businesses look towards energy efficient solutions to reduce power consumption and to alleviate the costs," says Adren Lim, Market Analyst of IDC’s Asia/Pacific Software Research.
The report also found that software was playing an increasingly important part of an attempt to green a data center saying that, "...While mainstream green IT in the data center is largely a combined effort of more energy-efficient hardware, best practices, and consultation services, software is playing an increasingly important role in facilitating the whole "green engine" to achieve business and environmental sustainability".
"A large portion of Green IT practices and supporting software revolve around virtualization products, but equally important, is the management of these consolidated virtual and physical assets that will bring value through lower power, hardware, and manpower costs," Lim added.
When asked if businesses were adopting Green IT solutions because of or despite of the economic downturn, Lim said, "Green IT has been gaining good mind share in APEJ even before the downturn and is poised to become the next big trend. The current economic climate should further accelerate the cost saving advantages Green IT can offer". He adds that it is good to bear in mind that this report looks at Green IT only from the software perspective, which is a component within the whole "green" engine.
Friday, December 5, 2008
Enterprises look at BI and analytics to beat recession
With global economic recession having an impact on almost all industries, Businesses Intelligence and Analytics can present companies with an effective solution to the challenges they now face.
Downtime is when revenues nosedive and enterprises look at issues affecting them more seriously than ever before. Adopting business intelligence and analytics solutions can help enterprises get to the heat of issues and take decision timely decisions.
Dr. Mukund Deshpande, senior architect (BI) with Persistent Systems, Pune, says that enterprises are often faced with questions like: Which product promotions have the biggest impact on revenue? How are sales across regions, products? Which of my customers are most likely to switch to my competitor? And so on!
According to the senior architect, the profitability of any enterprise lies in identifying key issues and taking appropriate decisions at right time. To accommodate the exponential growth in data generated by business processes, organizations have invested heavily in building data warehouses that store this data and allow it to be easily queried. However, even with all of this data available, there are a few applications that exist which help business users with their decision-making.
Dr. Deshpande says the increasing global competition and the need for sustainable growth is driving businesses to increasingly looking to analytic applications to provide critical business insights. Whether focused on achieving a return on asset investments, understanding the competitive landscape, improving product and service quality, analysts and executives need to improve decision-making.
While data mining and analytics applications help business in decision-making, they are not widely adopted because of the unique nature of every business. A deep understanding of the business domain as well as expertise in data mining algorithms is required to build applications that are relevant to business users.
The biggest adaptors of BI and analytics in India or elsewhere are large enterprises in the business of telecom, retail, and BSFI. The economic downtime is when enterprises in these verticals fight it out for survival leading to greater demand for applications that can help in proper decision making.
Analytics for KPOs
How can KPOs leverage existing data to enhance their offerings and drive revenues by increasing their customer footprint?
As the global KPO landscape matures and becomes increasingly competitive, leading organizations are looking toward analytics to provide critical insights for driving revenue and continuous innovation. Customers are looking to their KPO partners to provide actionable insights that increase flexibility and responsiveness to anticipate customer and market demands, says Dr. Deshpande.
According to senior architect analytics, professionals are partnering with KPOs to extend core analytics capabilities to provide their customers with the kind of insights they are truly looking for. Leveraging on fully integrated and extensible analytics solutions, KPOs can exceeded their customers' expectations and service level agreement, he adds.
He said that Persistent has been in the business of helping ISVs develop BI solutions for nearly two decades. "In fact, Persistent can point to many industry-leading BI solutions in the market today where we have contributed to product development. This intimate understanding of the underpinnings of market leading solutions, coupled with our solution accelerators translates to rapid time to value for your BI projects," he says.
Specializing in predictive modeling techniques such as boosting, association rule mining, clustering, neural networks, regression, support vector machines, time series analysis, decision trees and Bayesian inference, and optimization methods such as linear programming, nonlinear methods, and genetic algorithms, Persistent's BI experts can jumpstart your BI initiative.
source: http://www.ciol.com/
Downtime is when revenues nosedive and enterprises look at issues affecting them more seriously than ever before. Adopting business intelligence and analytics solutions can help enterprises get to the heat of issues and take decision timely decisions.
Dr. Mukund Deshpande, senior architect (BI) with Persistent Systems, Pune, says that enterprises are often faced with questions like: Which product promotions have the biggest impact on revenue? How are sales across regions, products? Which of my customers are most likely to switch to my competitor? And so on!
According to the senior architect, the profitability of any enterprise lies in identifying key issues and taking appropriate decisions at right time. To accommodate the exponential growth in data generated by business processes, organizations have invested heavily in building data warehouses that store this data and allow it to be easily queried. However, even with all of this data available, there are a few applications that exist which help business users with their decision-making.
Dr. Deshpande says the increasing global competition and the need for sustainable growth is driving businesses to increasingly looking to analytic applications to provide critical business insights. Whether focused on achieving a return on asset investments, understanding the competitive landscape, improving product and service quality, analysts and executives need to improve decision-making.
While data mining and analytics applications help business in decision-making, they are not widely adopted because of the unique nature of every business. A deep understanding of the business domain as well as expertise in data mining algorithms is required to build applications that are relevant to business users.
The biggest adaptors of BI and analytics in India or elsewhere are large enterprises in the business of telecom, retail, and BSFI. The economic downtime is when enterprises in these verticals fight it out for survival leading to greater demand for applications that can help in proper decision making.
Analytics for KPOs
How can KPOs leverage existing data to enhance their offerings and drive revenues by increasing their customer footprint?
As the global KPO landscape matures and becomes increasingly competitive, leading organizations are looking toward analytics to provide critical insights for driving revenue and continuous innovation. Customers are looking to their KPO partners to provide actionable insights that increase flexibility and responsiveness to anticipate customer and market demands, says Dr. Deshpande.
According to senior architect analytics, professionals are partnering with KPOs to extend core analytics capabilities to provide their customers with the kind of insights they are truly looking for. Leveraging on fully integrated and extensible analytics solutions, KPOs can exceeded their customers' expectations and service level agreement, he adds.
He said that Persistent has been in the business of helping ISVs develop BI solutions for nearly two decades. "In fact, Persistent can point to many industry-leading BI solutions in the market today where we have contributed to product development. This intimate understanding of the underpinnings of market leading solutions, coupled with our solution accelerators translates to rapid time to value for your BI projects," he says.
Specializing in predictive modeling techniques such as boosting, association rule mining, clustering, neural networks, regression, support vector machines, time series analysis, decision trees and Bayesian inference, and optimization methods such as linear programming, nonlinear methods, and genetic algorithms, Persistent's BI experts can jumpstart your BI initiative.
source: http://www.ciol.com/
Monday, November 17, 2008
Global outsourcing and offshoring trends for 2009
The financial crisis and global recession will accelerate adoption of global outsourcing and offshoring as strategic business tools as organisations respond to economic adversity with a forceful push toward cost-reduction according to leading sourcing advisory firm EquaTerra. Factors expected to impact outsourcing and offshoring over the next year are:
Globalisation will continue but at a slower pace: Numerous factors, including the severe global economic downturn, repeated product health/safety scares related to Chinese goods, a collapse of commodity prices (critical to supporting many emerging market economies) and the election of a new U.S. administration concerned with the loss of domestic jobs will slow globalisation and one of its key manifestations, the global sourcing of services. But the compelling business benefits of global sourcing, especially in tough economic times, will continue to drive growth.
Reassessment of current global outsourcing strategies/destinations: As buyer focus shifts to cost reduction and cost avoidance, organisations will carefully analyse current and future outsourcing efforts and service provider partners to ensure they are getting services from the most cost-effective location.
Steep learning curves: As buyers turn to outsourcing/offshoring to help weather economic turbulence, they will need to consider mitigating factors, including service provider capacity levels, prior direct experience and whether engaging a service provider expands or consolidates the supplier base, supplier consolidation/rationalisation is viewed as a means to gain economies of scale, reduce overall costs and speed implementation of new efforts to meet shorter term business needs.
Volatility in foreign exchange markets: Outsourcing buyers and sellers must become more effective/efficient at hedging against currency fluctuations that often negatively impact local currencies in emerging markets, creating instability in cost structure/pricing/profit margins. The seesawing value of the dollar will make calculating the true costs of outsourcing/offshoring more complicated, challenging buyers and service providers to plan/project longer-term pricing, cost and profitability levels. Efforts to do this should include explicit contractual contingencies and, when possible, spreading global service delivery efforts across multiple markets.
Wage inflation in offshoring markets will abate, at least temporarily: As Western markets pause to digest events and determine a go-forward strategy,demand for global outsourcing services will slow temporarily, curbing the recent trend toward wage inflation in offshoring markets and helping top outsourcing destinations remain competitive.
Evolving outsourcing business model: Buyers will continue to shift away from the use of project-based contract labor in favor of longer term, formalised outsourcing relationships. By committing to longer term and larger scale deals, buyers can get better pricing from service providers, better levels of service and lock-in longer term cost savings strategies.
Move toward flexible service delivery models and acquiring in-house skills needed to manage sourcing successfully: As buyers gain outsourcing/offshoring management experience, they will seek greater flexibility in service delivery models to fit form to function and tasks. The result will be a mix of domestic, nearshore and offshore shared services/captive centres and other outsourcing efforts that will evolve with the marketplace. Organisations will also place greater emphasis on defining, acquiring and transferring skills needed to successfully govern outsourcing/offshoring efforts.
Globalisation will continue but at a slower pace: Numerous factors, including the severe global economic downturn, repeated product health/safety scares related to Chinese goods, a collapse of commodity prices (critical to supporting many emerging market economies) and the election of a new U.S. administration concerned with the loss of domestic jobs will slow globalisation and one of its key manifestations, the global sourcing of services. But the compelling business benefits of global sourcing, especially in tough economic times, will continue to drive growth.
Reassessment of current global outsourcing strategies/destinations: As buyer focus shifts to cost reduction and cost avoidance, organisations will carefully analyse current and future outsourcing efforts and service provider partners to ensure they are getting services from the most cost-effective location.
Steep learning curves: As buyers turn to outsourcing/offshoring to help weather economic turbulence, they will need to consider mitigating factors, including service provider capacity levels, prior direct experience and whether engaging a service provider expands or consolidates the supplier base, supplier consolidation/rationalisation is viewed as a means to gain economies of scale, reduce overall costs and speed implementation of new efforts to meet shorter term business needs.
Volatility in foreign exchange markets: Outsourcing buyers and sellers must become more effective/efficient at hedging against currency fluctuations that often negatively impact local currencies in emerging markets, creating instability in cost structure/pricing/profit margins. The seesawing value of the dollar will make calculating the true costs of outsourcing/offshoring more complicated, challenging buyers and service providers to plan/project longer-term pricing, cost and profitability levels. Efforts to do this should include explicit contractual contingencies and, when possible, spreading global service delivery efforts across multiple markets.
Wage inflation in offshoring markets will abate, at least temporarily: As Western markets pause to digest events and determine a go-forward strategy,demand for global outsourcing services will slow temporarily, curbing the recent trend toward wage inflation in offshoring markets and helping top outsourcing destinations remain competitive.
Evolving outsourcing business model: Buyers will continue to shift away from the use of project-based contract labor in favor of longer term, formalised outsourcing relationships. By committing to longer term and larger scale deals, buyers can get better pricing from service providers, better levels of service and lock-in longer term cost savings strategies.
Move toward flexible service delivery models and acquiring in-house skills needed to manage sourcing successfully: As buyers gain outsourcing/offshoring management experience, they will seek greater flexibility in service delivery models to fit form to function and tasks. The result will be a mix of domestic, nearshore and offshore shared services/captive centres and other outsourcing efforts that will evolve with the marketplace. Organisations will also place greater emphasis on defining, acquiring and transferring skills needed to successfully govern outsourcing/offshoring efforts.
Thursday, November 13, 2008
Outsourcing one bright light in sea of global gloom
Business outsourcing may not be the most glamorous industry in the world but it is one of the few bright lights amid the doom and gloom of the global financial crisis.
The two countries which have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil but the industry is confident it will ride out the storm.
In the Philippines the business process outsourcing (BPO) industry expects growth this year of between 35-40 per cent on revenues of around seven billion dollars.
"We are part of the solution, not part of the problem," Oscar Sanez the chief executive of the Business Processing Association of the Philippines (BPAP) said in a recent interview.
The BPO sector expects annual growth of around 40 per cent with revenues hitting 12 billion dollars by 2010 and employing one million people compared with 300,000 this year.
In India, where the industry generates some 40 million dollars in annual export revenues, the story is much the same although it admits that it could expect some initial pain.
The sector traditionally views bad times as offering opportunities as Western companies cut costs by moving work to cheaper destinations offshore.
India leads the world when it comes to outsourcing with more than half the global business while the Philippines is a distant second with around 10 per cent.
Both countries place a great deal of importance on the sector as its growth creates jobs and much-needed revenue.
Rick Santos, the Philippine country chairman for global property services company CB Richard Ellis, told AFP that the crisis would "actually drive more BPO business to the Philippines".
"You will see many more companies having to go offshore just to survive," he said.
He said he expects about 502 million square metres (5.4 billion square feet) of Philippine office space to be leased this year, up 52 per cent from 2007.
India and the Philippines are the preferred destinations for European and American banks and IT companies for outsourcing their back room and call centre operations due to the highly educated work force and English speaking skills in both countries.
Sanez said that despite the financial turmoil he was confident the BPO industry in the Philippines will continue to see growth.
"Judging from the investor meetings we've been having recently our clients will want to ramp up their outsourcing activities in order to accelerate cost savings," he said.
"The Philippines is in a very strategic position due to its strong and successful experience with BPO particularly with large American and British multinationals giving it a high level of credibility and trust especially in critical times."
He conceded that in the short term there could be a "bit of distraction" due to management and ownership realignments in the banking sector.
"But this should not affect outsourcing operations as these are critical functions especially those that connect with customers," he said.
Some 85 per cent of the BPO business in the Philippines is in banking and comes mainly from the US.
In India the BPO industry expects there will be a short to medium term impact on the sector as much of its business is IT-related.
Some of the pain from the bankruptcy of Wall Street giant Lehman Brothers, the sale of Merrill Lynch and the US government's bailout of insurance giant AIG -- all ravaged by credit woes -- is already being felt, according to industry sources.
But it's still very much a mixed picture in India where companies are at best "cautious" on the outlook for the sector and not peering too far into the future because they say that all the dominoes have yet to fall.
The main industry body said it will look at its sales forecast for this financial year to March 31, 2009, in December -- and says it may be revising expectations downward.
But it's not looking any further forward than the current year in number terms, it said.
Sales growth could fall below 20 per cent this year from 28 per cent last year while decisions on new projects have come to a virtual halt, said Som Mittal, head of the National Association of Software and Services Companies (Nasscom).
"New projects are always the first to feel the hit," said Mittal.
He said sales growth has slowed but added: "Companies are hiring from university campuses for the next quarter," although the frenetic pace has slowed.
"We've got to pay attention to other parts of the world like Japan and the Middle East," said Mittal. "There is no way we can rely so heavily on the US."
Some 60 per cent of India's outsourcing work comes from the US and 30 per cent from Europe with the rest of the world contributing just 10 per cent.
However, Indian firms doing legal outsourcing work are experiencing a mini-boom as a result of the financial turmoil with US bankruptcies, mergers and acquisitions growing by the day and demand growing for help with litigation.
Legal work in India costs a tenth of what US lawyers charge.
Sanez also believes there are many industries outside the banking sector that can be tapped for new business.
"Industries like construction, food, retail and distribution, high tech, heavy industries and the pharmaceutical sectors have yet to be tapped," he said.
The two countries which have benefited the most from outsourcing, India and the Philippines, expect to see some initial pain from the financial turmoil but the industry is confident it will ride out the storm.
In the Philippines the business process outsourcing (BPO) industry expects growth this year of between 35-40 per cent on revenues of around seven billion dollars.
"We are part of the solution, not part of the problem," Oscar Sanez the chief executive of the Business Processing Association of the Philippines (BPAP) said in a recent interview.
The BPO sector expects annual growth of around 40 per cent with revenues hitting 12 billion dollars by 2010 and employing one million people compared with 300,000 this year.
In India, where the industry generates some 40 million dollars in annual export revenues, the story is much the same although it admits that it could expect some initial pain.
The sector traditionally views bad times as offering opportunities as Western companies cut costs by moving work to cheaper destinations offshore.
India leads the world when it comes to outsourcing with more than half the global business while the Philippines is a distant second with around 10 per cent.
Both countries place a great deal of importance on the sector as its growth creates jobs and much-needed revenue.
Rick Santos, the Philippine country chairman for global property services company CB Richard Ellis, told AFP that the crisis would "actually drive more BPO business to the Philippines".
"You will see many more companies having to go offshore just to survive," he said.
He said he expects about 502 million square metres (5.4 billion square feet) of Philippine office space to be leased this year, up 52 per cent from 2007.
India and the Philippines are the preferred destinations for European and American banks and IT companies for outsourcing their back room and call centre operations due to the highly educated work force and English speaking skills in both countries.
Sanez said that despite the financial turmoil he was confident the BPO industry in the Philippines will continue to see growth.
"Judging from the investor meetings we've been having recently our clients will want to ramp up their outsourcing activities in order to accelerate cost savings," he said.
"The Philippines is in a very strategic position due to its strong and successful experience with BPO particularly with large American and British multinationals giving it a high level of credibility and trust especially in critical times."
He conceded that in the short term there could be a "bit of distraction" due to management and ownership realignments in the banking sector.
"But this should not affect outsourcing operations as these are critical functions especially those that connect with customers," he said.
Some 85 per cent of the BPO business in the Philippines is in banking and comes mainly from the US.
In India the BPO industry expects there will be a short to medium term impact on the sector as much of its business is IT-related.
Some of the pain from the bankruptcy of Wall Street giant Lehman Brothers, the sale of Merrill Lynch and the US government's bailout of insurance giant AIG -- all ravaged by credit woes -- is already being felt, according to industry sources.
But it's still very much a mixed picture in India where companies are at best "cautious" on the outlook for the sector and not peering too far into the future because they say that all the dominoes have yet to fall.
The main industry body said it will look at its sales forecast for this financial year to March 31, 2009, in December -- and says it may be revising expectations downward.
But it's not looking any further forward than the current year in number terms, it said.
Sales growth could fall below 20 per cent this year from 28 per cent last year while decisions on new projects have come to a virtual halt, said Som Mittal, head of the National Association of Software and Services Companies (Nasscom).
"New projects are always the first to feel the hit," said Mittal.
He said sales growth has slowed but added: "Companies are hiring from university campuses for the next quarter," although the frenetic pace has slowed.
"We've got to pay attention to other parts of the world like Japan and the Middle East," said Mittal. "There is no way we can rely so heavily on the US."
Some 60 per cent of India's outsourcing work comes from the US and 30 per cent from Europe with the rest of the world contributing just 10 per cent.
However, Indian firms doing legal outsourcing work are experiencing a mini-boom as a result of the financial turmoil with US bankruptcies, mergers and acquisitions growing by the day and demand growing for help with litigation.
Legal work in India costs a tenth of what US lawyers charge.
Sanez also believes there are many industries outside the banking sector that can be tapped for new business.
"Industries like construction, food, retail and distribution, high tech, heavy industries and the pharmaceutical sectors have yet to be tapped," he said.
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