Cisco And TCS Partner To Provide Advanced IT Solutions

Cisco Systems Inc has struck a strategic alliance with Tata Consultancy Services (TCS), India's largest information technology (IT) services provider to build a technology lab at the latter's Chennai campus.
The partnership will develop next generation data centers aimed at delivering IT solutions to Indian, US and UK based companies targeting small and medium enterprises.

TCS which has a market capitalization of ~$10.4bn (as of February 2009) will use the technology to cut costs by providing a pay-per-use virtualized data centre. In the short term, TCS is optimistic and does not expect budget cuts among its clients to affect its work. For CISCO, the rationale behind the alliance is to capitalize on the economic boom in India and the country's ongoing IT developments. Over half of CISCO's revenues are generated from providing data centers, technology solutions and network solutions.

According to a recent Gartner Inc, report, Data centre capacity in India is estimated to surpass 5 million square feet by 2012, a striking 31% growth from 2007. Given its long term capacities, India is expected to become a hub for nearby developed and developing economies. Recently IBM (NYSE: IBM) has been commissioned to build three 'green' data centers for leading financial services group Religare.

Market Trend And Downturn Effects

Several Indian companies have been losing business from overseas amidst the recent global economic woes. Late last year Wipro Technologies (Wipro), lost contracts - some of its customers including CISCO, Credit Suisse (NYSE: CS) and Nortel cancelled and several others delayed. While Wipro expected business to pick up after April 2009, it also admitted to be more cautious about spending. Cost cuts have now become the order of the day with companies like Infosys (NASDAQ: INFY) docking per employee costs by at least $10. Interestingly, in December 2008 TCS had announced a host of cost management initiatives to withstand the global economic downturn. Besides, it was also re-examining its capital expenditure program.

Emergence as a possible data centre hub

The TCS-CISCO partnership as well as the recent IBM ' Religare data centre building partnership could perhaps be signaling the arrival of India as a lucrative data centre hub for companies in the near future, both within the subcontinent and in other geographical localities. Infrastructural framework such as adequate power back up would however be a prerequisite for India's emergence as a dominant player in the market for data centers.

Cross Border: US India News Wrap is a unique news and analysis service from ValueNotes. This weekly publication focuses on US corporations and what they're doing in India. This will be a unique service focused entirely on the US-India story; and will chronicle the growth in cooperation, closer economic ties, mutuality of interest and US corporations increase investment in India and its impact on companies, sectors and investing options.

No responsibility is accepted for errors of fact or opinion. Neither the analyst nor ValueNotes has a position in the stocks covered above, or has received any payment in any form for this report. ValueNotes does not own or trade in the stocks of companies under coverage. ValueNotes does not provide investment banking services or investor relations' services to preserve the independence of its research. Neither ValueNotes nor the analyst incurs any liability arising out of use of the above information/ report. Reproduction in whole or in part without written permission is prohibited.

ValueNotes is an independent research firm based in India, and provides a range of custom research and business intelligence services, including India-based research outsourcing solutions. Through a constantly evolving range of products and services, the ValueNotes Outsourcing Practice (www.valuenotes.biz) provides service buyers, vendors, consultants and others in the outsourcing industry with access to in-depth analysis backed by reliable primary intelligence.

Both ValueNotes and Investrend Research are members of the First Research Consortium, and participate in the organization's standards development panel for independent research providers located at http://www.firstresearchconsortium.com .

FinancialWire" ( http://www.financialwire.net ), an independent, proprietary news service of Investrend Communications, Inc., receives no compensation for its news or opinions. Further disclosure is at http://www.investrend.com/articles/secondlevel.asp?level=472 . To contact FinancialWire" write to inquiries@financialwire.net .

Free annual reports for companies mentioned in the news are accessible via http://investrend.ar.wilink.com/?level=279 .

Source: www.tradingmarkets.com