Luxoft company news

Luxoft Strengthens its In-Memory Business Intelligence expertise by partnering with QlikTech

Thu, 18 Feb 2010 18:07:13 -0600

Moscow, Russia and New York, US – February 18, 2010 – Luxoft, a leading global provider of advanced application and product development services, today announced its partnership with QlikTech, a leading business intelligence company.

QlikTech pioneered the in-memory business intelligence space on the premise that meaningful analysis belongs in the hands of the users who need the information, when they need it. QlikView, QlikTech’s key product, is designed to deliver immediate business answers and enable users to easily explore their data without limits. Unlike traditional business intelligence, QlikView can deliver value with payback measured in days or weeks rather than months, years, or not at all.

Luxoft has built its reputation by providing tools and services that business owners need to stay ahead in today’s new business environment, while supporting the demands placed on IT organizations. “The next evolution of enterprise applications must provide a new level of competitive advantage through flexibility and productivity. Our customers expect that new systems will not only help them streamline their operations, but that all data can be mined for meaningful business analysis”, says Vasily Suvorov, Luxoft’s Vice President, Technology Strategy. “QlikView adds a completely new level of sophistication and value to our customers and this is exactly what we have been looking for to help us set our service offering apart from our competitors, by helping our customers make sense of their data in a quick and easy way that they never thought possible before”.

“QlikTech is pleased that Luxoft has recognized the opportunity to include QlikView in its product suite, as its business intelligence offering,” stated Rogier Verheij, Vice President QlikTech. “QlikView can enable Luxoft to deliver on their mission to give their customers a tool they need to effectively manage their business, especially in today’s environment.”

(For more information about this partnership, please visit http://www.luxoft.com/about/qliktech.html)

About QlikTech

QlikTech has more than 12,000 customers in 95 countries and over 800 partners worldwide. QlikView can be deployed on premise, in the cloud, or on a laptop or mobile device—from a single user to the largest global enterprise. For more information, please visit www.qlikview.com.

About Luxoft

Luxoft, a member of the IBS Group, is an emerging global leader in application and product engineering outsourcing services for enterprise IT organizations and software vendors. Luxoft builds lasting partnerships with its clients, such as Boeing, Deutsche Bank, UBS, Dell, IBM, Sabre and other global leaders, based on the culture of engineering excellence, innovation, and deep domain expertise. Luxoft offers global delivery capability through its network of state-of-the-art delivery centers in North America, Central & Eastern Europe, and Asia. Luxoft`s customers benefit from the right mix of technology skills, industry knowledge, best-of-breed processes and methodologies, and a choice of engagement models.

Luxoft has been awarded the #1 position in the “Emerging European Markets” category of the 2009 “Global Services 100” list. Company is also a recipient of the Applied Innovation Award from the IAOP and Wipro, ITAA and Forbes (together with Deutsche Bank).

Media Contact:
Julia Simonova
212-964-9900 (x228)
JSimonova@luxoft.com

Luxoft CEO Inducted into 2010 Outsourcing Hall of Fame

Tue, 16 Feb 2010 05:59:39 -0600

Dmitry Loschinin honored by the International Association of Outsourcing Professionals©

The call of the Russian investor

Wed, 03 Feb 2010 02:05:19 -0600

When Sergei Kalugin, a Russian businessman, cashed out of some telecom projects he was managing a little over a year ago, he began casting around for other business pursuits.

In terms of the “next big thing”, there was one crucial limitation. As he puts it: “I didn’t have enough money to buy an oil company.” But he adds, he wanted to do something “creative and entrepreneurial”. That is when the internet beckoned.

He is now chairman of Web Media Group, which has invested about $20m (€14.4m, £12.5m) in a number of Russian internet start-up projects. In the process, he has become something rarely found in Russia: a swashbuckling, Silicon Valley-style venture capitalist.

Most financiers have little stomach for technology investing in Russia, which is surprising, given the Soviet legacy of high-tech successes. In spite of the potential of a large pool of maths and science talent, most consider it too much of a risk.

“Venture capital is the most risky sector, and Russia is a risky country. So you’re really double-dipping on the risk,” says Dmitry Krukov, who runs a private equity fund for Renaissance Capital, a Moscow investment bank.

As a result, Russia, once the country of Sputnik and Yuri Gagarin, has now faded from the forefront of global technology development, as the Soviet state-sponsored infrastructure of research institutes atrophies and universities remain badly underfunded. Meanwhile, the private sector has not made up the difference.

Alexandra Johnson, managing director at Draper Fisher Jurvetson, the Silicon Valley venture capital company, specialises in Russia. She believes technology underdevelopment is mainly due to the lack of good managers. “There is a lot of money [in Russia], and a great science and engineering base, but not enough talented entrepreneurs and managers to run these companies,” she says.

The unpopularity of high-risk investment in technology is an advantage, however, for those who dare. Yuri Milner, head of another VC company in Russia, Digital Sky Technologies, which recently bought 2 per cent of Facebook, says the lack of competition does not trouble him too much.

“If you’ve got a great project, sooner or later you’ll wind up in this office,” he winks, from his eyrie on the 50th floor of a chrome and glass tower high above the Moscow River. For, whereas internet entrepreneurs in Silicon Valley have dozens of VC companies to choose between, in Russia, there are no more than a handful.

Mr Kalugin hopes more people follow in his footsteps. “There has never been a huge market for these projects here, until very recently. Internet in Russia is a serious business, and people are slowly catching on,” he says.

Without Soviet-style state support, or developed private-sector sources of capital, Russian technology remains stunted. Most talented programmers leave to work abroad, rather than stay to try to set up their own companies.

Dmitry Loschinin, head of Luxoft, Russia’s largest software offshoring company, identifies the lack of investors willing to invest in budding technologies as the biggest problem facing innovation in his country.

Comparing the west to Russia, he says: “To bring projects along, you need three types of investors. The first ones, who invest in the beginning, are the so-called ‘three Fs’ – friends, family and fools. At the last stage you need the strategic investors: the initial public offerings, the Googles, that sort of thing.

“In between, you have the so-called angel investors [individuals who invest] and the venture capitalists, who take a project and move it to the next level, to the strategic investors. It’s the highest risk, highest reward. That is what is totally missing in Russia.”

Ms Johnson argues that much of the problem is due to the availability of other profitable investment opportunities. “It’s hard to get sophisticated investors to put money into tech when they could make fabulous returns on oil and other sectors,” she says. She adds that the Russian market does not have the kind of prerequisites for the fabled “big exit” – the holy grail for venture capitalists, when the investors cash out, usually with an IPO.

There is no tech-friendly stock exchange in Moscow, although there is an attempt under way to mimic London’s Aim exchange, for alternative investments. There are also no stock options, the key ingredient for the high pay-outs of Silicon Valley.

Nonetheless, Mr Kalugin is un�daunted. Having invested $20m in Web Media Group, according to the company’s statistics, he says he is busy developing internet projects or buying them. There are 11 in the portfolio, in various stages of development, and most are tried and tested Russian versions of successful western formulas.

Photosight.ru, for example, is similar to the photosharing website Flickr, while Medsputnik.ru is a close approximation of Webmd.com, the health information site, right down to the diagnostic tools for the hypochondriac in all of us. Dostavka.ru is similar to Amazon.com, and despite the obstacles in Russia to e-commerce – such as lack of credit cards or reliable delivery – it has grown 50 per cent in the past year, according to Mr Kalugin.

Russian internet companies are successful in their market niche, and Russian internet usage rates are some of the fastest growing in the world. The country’s biggest search engine, Yandex, grew at 94 per cent in the year to August 2009, the fastest rate in the world for a search engine, according to a survey by ComScore, the internet research firm – albeit from a low base. According to Web Media Group statistics, it has 4m unique users and 40m monthly page views.

There are many other high-technology areas for investors with a big appetite for risk, ranging from wimax, a type of wireless network, to artificial intelligence, to nanotechnology.

Russia’s political leaders are discovering that as their country increasingly lags behind the world’s elite knowledge economies, they need to boost the sector.

To that end, the government created a state corporation in 2007 to fund innovation, Rusnano, based in Moscow, which specialises in nano�technology and plans to spend hundreds of millions developing and licensing technologies over the next few years.

“Rusnano is not backing ideas but actually proven technologies,” says Vladimir Bernstein, managing director of Moscow-based Icon Private Equity, an investment firm not affiliated with Rusnano. “It’s about creating whole ecosystems, producers, services, whole groups of companies, and there will be opportunities for venture capitalists around those ecosystems,” he says.

Part of this initiative will involve the creation of a $100m venture capital fund, established by Rusnano in partnership with VTB Group, Russia’s second-largest state-owned bank, and Draper Fisher Jurvetson.

Just as Mr Kalugin hopes other investors follow in his footsteps, so the Russian government hopes that by acting as a funder itself, it can be a model to help spur the sector, too.

Luxoft ranked among the fastest-growing industry leaders in the Deloitte Technology 500 EMEA 2009 Ranking

Mon, 07 Dec 2009 03:48:54 -0600

Luxoft has been ranked in the prestigious Deloitte Technology Fast 500 EMEA 2009 listing, which recognizes the 500 fastest-growing technology companies across Europe, the Middle East and Africa region (EMEA) based on percentage revenue growth over a five year period.

This year only four companies with Russian origin have entered the rating.

The Deloitte Technology Fast 500 EMEA program is now in its ninth year, and Luxoft receives this top industry recognition for the third consecutive time.

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Choosing An Outsourced Service Provider

Fri, 04 Dec 2009 20:00:06 -0600

Sift Through The Clutter To Find A Provider That’s Right For You

Global Outsourcing Leader, Luxoft, Announces 2010 Industry Predictions

Tue, 01 Dec 2009 00:00:01 -0600

Luxoft, a leading global provider of advanced application and product development services, today has issued its predictions for the outsourcing industry in the coming year

The Bear grows bullish about clawing back its technology edge

Thu, 29 Oct 2009 21:33:13 -0500

FT October 29, 2009 by Charles Clover
Financial Times features Luxoft in its article on Russia’s information technology and software exports industry: “The Bear grows bullish about clawing back its technology edge”

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Financial Times features Luxoft in its article on Russia�s information technology and software exports industry: �The Bear grows bullish about clawing back its technology edge�

Thu, 29 Oct 2009 01:12:31 -0500

FT October 29, 2009 by Charles Clover
“The Bear grows bullish about clawing back its technology edge”

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Outsourcing feature: Weighing the risks

Wed, 21 Oct 2009 21:20:28 -0500

Some larger financial institutions are taking the opportunity to radically restructure outsourcing deals in the wake of the recession to release cash and shift the balance of financial risk towards the outsourcing provider. Philip Hunter looks at the state of the market, how it’s been affected by the downturn and the coming trends, such as performance-based shared risk models

Despite the economic downturn creating a gloomy picture for many, in the outsourcing market, particularly with Business Process Outsourcing (BPO), it is thought that it may actually be good news and the sector may grow as hard pressed managers at financial institutions look to cut costs quickly and improve the bottom line in the immediate future. Even for those financial firms undertaking software or infrastructure development projects delivering these with less staff, following cuts caused by last year’s crunch, may be impossible without some outside assistance. Long-term it is best to view outsourcing as a strategic reengineering tool but in the current climate immediate cost reduction may predominate. Financial institutions must be careful not to get locked into expensive long deals with outsourcers however, as has happened in the past, and ensure strong Service Level Agreements (SLAs) and actionable get out clauses in the event of poor service or delivery, an all too familiar bug bear in the past. If customers leave a bank or insurer due to a deterioration in service, or a new product doesn’t come on stream and deliver new revenues as intended, then it’s a false economy. Buyer beware is definitely the attitude to have for those financial institutions looking to supplement their in-house efforts.

“The credit crunch has led financial services companies to focus on financial re-engineering, as well as IT re-engineering, and look to release value from their balance sheet,” says Jim Scurlock, vice president, global financial services, at EDS, which was acquired by HP for $13.9 billion in 2008, creating a serious large rival for IBM Global Services and other leading players. “There is a desire on the part of financial institutions to significantly reduce capital expenditures and operating expenditures, both of which create, as well as release, value tied to the balance sheet.”

For the best results though institutions should not simply squeeze their outsourcer, since history has shown that providers of any kind of service will extract revenue in other ways if the terms of the contract are too draconian, so says Douglas Hayward, an analyst at research outlet, IDC, who specialises in outsourcing. He believes the best approach is to share both risk and reward equitably, combining stick and carrot to give providers the greatest incentive to deliver maximum value, as well as minimum cost. “There has to be a contractual and governance mechanism to align the interests of both parties,” he says. “This can include risk-sharing and gain-sharing, or sophisticated ways of rewarding cost-cutting and flexibility by the vendor.”

Hayward cites an outsourcing contract that he knows of where the provider was allowed to keep a proportion of the savings made whenever a billable item was eliminated. Normally such items, which could be the fee charged by external consultants hired by the provider for services not covered by the contract itself, would be passed straight on to the customer, but such an arrangement gives providers greater incentive to seek savings beyond their immediate remit. More generally, improved working relationships will lead to savings. “In some cases, joint ventures between customers and suppliers can be a good way of aligning interests,” says Hayward.

Recessionary effect
The credit crunch and subsequent recession has placed the management of risk associated with outsourcing contracts higher up the agenda. This has had the effect of steering larger banks, including the super institutions born out of the crisis, such as Lloyds Banking Group, away from the mega contracts of the past, believes Mike Dodd, a senior outsourcing specialist at the PA Consulting Group. “If nothing else, the events of the last 18 months should be reminding banks that one of their key areas of competence is (or should be!) risk management and that putting all their eggs in one basket [i.e. relying on a single outsourcer] does not look like a good risk management strategy,” he says.

“In any case there is no real track record of successful mega outsourcing in banking,” he adds, citing the case in 2004 when JP Morgan, then the second largest US bank, cancelled a $5 billion contract with IBM. This particular case also indirectly highlighted a contemporary source of risk that ironically might actually have been amplified by the credit crunch – the loss of in-house IT expertise. One reason cited by JP Morgan for cancelling that IBM contract back in 2004 was a strategic decision to bring some IT functions and expertise back in-house. Yet today the motivation to save money and release capital is leading some institutions to continue making the mistake of running down their in-house IT so they are unable to manage outsourcing contracts properly.

“Many buyers still have an asymmetric approach to outsourcing deals, that is they focus on the transaction and supplier side of the arrangement without paying anything like enough attention to the requirements for changed internal processes, redesign and re-skilling of the retained organisation,” says Dodd. “This inevitably leads to problems, sometimes with the supplier getting blamed for lack of preparedness on the customer side.”

Such running down of in-house IT leaves organisations over-exposed to the fortunes of the outsourcing provider, and over-reliant on its ability to keep pace with changing technology. “This could leave banks or insurers in a very vulnerable position – suppliers could essentially charge what they wanted for applications and systems and they would lose their competitive edge because they would have to rely upon the same ‘off the shelf’ package as their competitors,” says Martyn Hart, chairman of the UK trade body, the National Outsourcing Association (NOA). “There needs to be a proper balance between onshore and offshore work and all organisations should look to maintain ample expertise in-house.”

Indian scandals
Some financial institutions will have been alerted to the potential risks of outsourcing by two major recent scandals involving Indian providers. Firstly it emerged in January 2009 that outsourcing and computer services group Satyam had been inflating its accounts by just over $1 billion to protect itself from hostile takeover. Then remarkably, in the same week, India’s third largest outsourcer Wipro was banned from competing for contracts financed by the World Bank, in light of the revelation that it had provided improper benefits to the staff of some of its clients back in 2000. The Satyam scandal was more recent and serious, but the two combined to dent confidence in Indian outsourcing, claims Yuri Elkin, managing director of the financial services practice at rival Russian-based outsourcing provider, Luxoft. “Satyam’s scandal cast a shadow on the entire industry’s image,” he says. “Companies realised that, even though India still remains a prime outsourcing location, it is not safe from geopolitical risks and corporate frauds, and so they started to look more at alternatives, such as central and Eastern Europe and Southeast Asia.”

Indian outsourcers themselves have responded by setting up or acquiring operations in these other territories, in part to meet growing demand for a balance between in-house, near-sourcing and far-sourcing. They continue to diversify and expand, and the impact of the scandals earlier this year already appears to be receding according to some other commentators. “One of the best indicators of India’s success is to look at the performance of its large IT services companies,” says the NOA’s Hart. “Companies like TCS and Infosys have taken the IT world stage by storm and have been going from strength to strength increasing their client portfolio and offering innovative outsourcing solutions. It is unlikely that their client base will reduce dramatically as a result of a loss of confidence caused by the scandals. The price and the service they are offering are just too good.”

Trends
Not all trends in financial outsourcing have been driven by the recession. And while payments, finance, administration and human resources continue to be the principal activities to be outsourced, there have been some ongoing changes in the balance between onshore and offshore locations for some activities. According to Mark Ingleby, business development director, financial services, at BPO firm, Vertex Data Science: “We are seeing a swap out as voice service moves onshore to be replaced by back office functions. It’s important to stress that customer service and loyalty remain central to these deals and therefore we see organisations measuring the perceptions among their customers of any service development.” Ingleby’s point here is that organisations are finding customer facing operations such as call centres may be best provided onshore by people with greater geographical knowledge and closer linguistic affinity with the service area, while commodity and some technical functions can be offloaded to the lowest cost provider.

In fact there has been a strengthening trend towards outsourcing technical functions requiring specific financial expertise but that are not deemed core to the business, driven by the growing complexity of trading environments and increasing number of regulations with IT implications. In this case the recession has added impetus by virtue of the regulatory and governance changes it has brought about, believes Luxoft’s Elkin. “We have acquired a number of new projects including ones that would never have been outsourced before the credit crunch,” he says. “Recent changes in capital markets have also led to more business. For example, the growing number of electronic trading exchange venues, wide usage of dark pools of liquidity (i.e. non-displayed trades), increased volatility affecting trading algorithms on the sell side, new government regulations post-crunch and more strict risk control procedures all require related changes on the technology front. Given the pressure to reduce IT spend a lot of these complex technology projects get outsourced to IT vendors like Luxoft.”

Strong SLAs
Whatever the functions involved, one component of outsourcing contracts has become almost universal, the Service Level Agreement (SLA). This is essential in some form in order to monitor the performance of the outsourcer and the quality of the services provided. “Tom DeMarco wrote ‘you can’t control what you can’t measure’, and Peter Drucker famously made similar observations,” notes PA’s Dodd, referring to two great philosophers of IT. “Neither of them though said that it was easy to pick the right measurements!”

This observation partly explains why SLAs are often ill-conceived and only measure what is easy or obvious, and monitor the wrong aspects of a contract. They can also, as Elkin emphasised, be to the detriment of both parties, unless it is kept in its place as a tool for communicating between parties, rather than a rule of engagement. “It is best for the SLA, like the project itself, to begin on a trial basis and evolve through mutual consent and experience,” he says. Some bankers or insurers who’ve been burned in the past might not agree, perhaps demanding a watertight contract instead, but deep down we all know that good results come from good teamwork. Both viewpoints are valid, which is why the risk-based model, where both parties share in the dangers and the rewards, is perhaps a mutually beneficial development.

How High-Frequency Trading Became So Controversial

Sun, 11 Oct 2009 20:45:49 -0500

High-frequency trading has moved out of the shadows and entered even the average investor's vocabulary. How did it become so controversial, and what are the pros and cons of these trading strategies?

Buy Side Trader Shares His Use of HFT

Wed, 23 Sep 2009 20:44:11 -0500

As the temperature continues to rise this summer so too has the debate around high frequency trading but defining high frequency trading and its effect on the financial markets is no easy task.

Some liken it to simple algorithmic trading; others define as specific ultra low-latency trading strategies.

Eric Karpman, CEO of Trading Strategy Group and Luxoft Trading Solutions, says high frequency trading involves immediate, real-time data analysis, which leads to automatic trading decisions.

"It means analyzing what is happening in the market on the spot, without the time to store the data in a database, doing automatic tick by tick analysis and making decisions based on that," he adds.

Karpman's Trading Strategy Group is a boutique asset management and advisory firm that runs quantitative strategies for its own books and also consults and advises other shops through its association with Luxoft Trading Solutions.

Karpman says his use of high frequency trading strategies are mostly around arbitrage situations. "We also recently have gone into sentiment trading, or analyzing news and reactions to the news," he says. "All of the data is stored in a very fast algorithm and once a new piece of data or news comes in a decision is made in milliseconds on how to act on the news."

In other words, as soon as data hits it will trigger the algorithm and automatically shoot an execution order. "It's the optimization of the whole process," says Karpman.

He also sees high frequency trading around pairs trading strategies. "If we see certain movement from one security to another and we know universally they should have some kind of fixed spread between them and we see a large deviation then we make a move," Karpman explains, adding that these types of trades are easier to track because there isn't a lot of data to analyze or time to take in analysis.

"Whenever we can do the prep work before hand and then just react on the information as it comes in from the market, those are the strategies I would characterize as high frequency- and they are always active. If there is a little piece to grab we'll grab it," he says.

As far as the controversy brewing over high frequency trading and its market impact, Karpman says while he thinks it could be controlled so traders aren't taking advantage of others, it is simple technology evolution and how well a particular algorithm can work, or be optimized. "It does add liquidity and it does provide price reduction," he notes.

"We're working in trading environment with smaller spreads and just trying to still make money on those small spreads," he explains. "We have to come up with ways to be creative and be more optimized to take advantage of the environment " you have to adjust to the changing environment."

For those that can't keep up, Karpman says there are always other markets. "If you think certain markets are penetrated by big guys with smart machines then you can move on to other markets."

Client-vendor relationship weathers the economic turbulence � Luxoft Customer Advisory Board meeting 2009 gathers record number of attendees from Fortune 500 companies across various industries

Thu, 17 Sep 2009 04:07:57 -0500

Luxoft held its Customer Advisory Board 2009 (CAB) in the fashionable and artsy SoHo area of Manhattan, New York. Representatives from many of Luxoft’s clients attended the 2009 CAB, including Deutsche Bank, Hotwire, Boeing, and may others. Included in this year’s CAB was a key-note presentation from Frances Karamouzis, research vice president at Gartner, which included information on the latest market trends in outsourcing, as well as information about priority shifts since the recession and outsourcing destination trends.

Read more about Customer Advisory Board 2009

Progress Apama Announces Partnership with Luxoft

Thu, 17 Sep 2009 03:01:10 -0500

Agreement will capitalise on growing demand for electronic trading in Russian and Romanian markets