HP strengthens services with India expansion

Bangalore: Hewlett-Packard (HP) has added four new facilities in India,three in Bangalore and one in Chennai,a reflection of its increasing focus on enterprise services.The worlds largest IT company had announced last month that it would spinoff its PC business,a move that showed that HP,like IBM,wanted to concentrate on software and services that come with higher margins.

Ludger Rohlmann,vice-president for Best Shore ITO (infrastructure technology outsourcing ) in HP,who was in Bangalore recently,said the company is expanding rapidly in India.The new facilities will enable HP to add about 5,000 people, he said.HP does not provide a break-up of its employee strength by geography,but it is estimated that it has about 30,000 people in India.
The enterprise services business unit was recently elevated to report directly to the CEO,an indication of its growing strategic importance.Earlier it was part of a larger unit that included hardware.
Last year in June,HP had announced a $1 billion investment to transform and grow its enterprise services business.Later the same year it said the investment would go into expanding its global services delivery model,what it calls Best Shore,and it designated six countries as global delivery hubs.This included India,China,Bulgaria,Costa Rica,Malaysia and the Philippines.Best Shore hubs are designed to improve the client experience by offering access to deep industry and technical expertise that can tailor sophisticated solutions.
Theres a very large talent pool in India.We are able to design the most complex networks from here.We are moving a lot of design and engineering of infrastructure,including cloud infrastructure here, Rohlmann said,and added,India is the largest entity outside of the US (for HP).Lot of R&D and product related stuff will also happen in India happen this year.
Prakash M S,director for Best Shore ITO in HP India,said India already supports almost a fifth of HPs infrastructure services customers.Helping customers move to the cloud is a big focus for HP.
The company is building a data centre in India to offer infrastructure as a service.

GVK Power and Infrastructure buys BIAL stake for Rs 614 crore, threat from Changi & Tatas forces co to pay premium for Siemens' 14%

 Hyderabad-based GVK Power and Infrastructure will become the largest shareholder in Bangalore International Airport (BIAL) after agreeing to bite the bullet and pay a premium in difficult market conditions to buy Siemens' 14% stake. 

GVK, which was given time till August 20 to exercise its right to buy Siemens shares, said on Monday it had agreed to the transaction for Rs 614 crore. After approvals and documentation are complete, GVK will own 43% in BIAL while Siemens will hold 26%. GVK already runs the airport's day-to-day operations. 

The deal values BIAL at Rs 4,384 crore, an 8.6% premium over the price of Rs 105 per share GVK had paid in 2009 for acquiring the stakes of L&T and Zurich Airport. GVK had resisted doing the transaction on the 2009 valuation, but had to give ground as the prospect of rivals entering the fray appeared imminent. 

ET had reported on Monday that Singapore's Changi International and the Tatas had shown interest in acquiring Siemens' stake at Rs 114 per share. GVK, which as the second-biggest shareholder had the first right to buy Siemens' stake, was offering only Rs 60 per share as it felt that the 2009 valuations were no longer valid due to change in business conditions. 

"BIAL is an important and strategic asset for us and when Siemens had an offer of Rs 114 per share, we had no choice but to exercise that right (of first refusal)," Sanjay Reddy, managing director, BIAL, told ET. 

GVKPIL shares closed at 17.40, up 1.75% on BSE on Monday. 

Reddy, however, did not comment on the funding for the buy and whether GVK was looking to raise debt from the market. 

"Right now we have just accepted the RoFR and the details are being worked out and we are trying to close the transaction," he said. The buy will give GVK additional two seats on the board. 

Aviation experts say GVK must have exercised its right reluctantly considering the money involved, but BIAL was too important an asset to let go. "In the long term, BIAL will be a stronger asset for GVK even better than the Mumbai airport. The revenue share of the government in Mumbai airport with GVK is 37% whereas in BIAL it is only 4%," said Kapil Kaul, CEO, India and Middle-East, Centre for Asia Pacific Aviation, an aviation research and advisory firm. 

"Also, Mumbai has structural issues and is a locked airport whereas BIAL has a lot of scope of expansion and development," he added. 

GVK plans to invest Rs 4000-5,000 crore to expand BIAL. Work on expanding the terminal's capacity to 17 million passengers is underway. After the next phase, the airport will have the ability to handle over 30 million passengers. 

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