SaaS Contracting: Tips Leading to the Decision and What to Include in the Agreement

 

There are many items to consider before deciding to adopt a SaaS approach to your IT operation.  Marcia Gulesian, a software developer, project manager, CTO, CIO, and author of numerous feature articles on IT, has captured the salient points in her article SaaS: Financial, Legal & Negotiation Issues.  As the title to her article suggests, the financial implications should be addressed first.  Gulesian has a very descriptive section on the differences between buying the software application and leasing it.  She discusses the differences of owning an asset and its tax advantages of the deductibility of depreciation as opposed to the leasing option.  There is a brief explanation of cash flows between the two alternatives, finding your opportunity cost, and making your determination on the comparison of the present values of the cash flows from the cost of owning versus the cash flows from the cost of leasing.  Before we go too far afield, my readers can attest to the fact that I always try to define our terms before delving into the nuances that the subject line suggests.

Wikipedia’s definition of SaaS is very complete yet succinct:

“Short for Software as a Service, SaaS is a software delivery method that provides access to software and its functions remotely as a Web-based service. SaaS allows organizations to access business functionality at a cost typically less than paying for licensed applications since SaaS pricing is based on a monthly fee. Also, because the software is hosted remotely, users don't need to invest in additional hardware. SaaS removes the need for organizations to handle the installation, set-up and often daily upkeep and maintenance. Software as a Service may also be referred to as simply hosted applications.”

I also have a posting in this blog, which I must admit has become quite popular based on the number of hits registered to it, entitled SaaS is the Future.  In it I discuss how a Managed Service Provider (“MSP”) can help software developers get their product to the market faster since the infrastructure barriers and capital expenditures are significantly lessened.  In another posting about Unified Communications I have quoted Mat Taylor, a senior software architect with British Telecom, regarding the benefits of SaaS:

"The ability to get things done faster, get workers more engaged in a business scenario, provide better customer service, are all big productivity wins that benefit the bottom line"

In light of the above discussion surrounding “lower total cost of ownership and quicker time-to-value”, Gulesian cautions us that the other factors to include in the financial calculation is the maintenance and support fees that come with ownership as compared to the SaaS fees which includes these items.

SO WHAT DO I INCLUDE IN THE SAAS CONTRACT?

Gulesian points out three areas that must be addressed in the contract:

·         Integration with your non-SaaS systems

·         Loss of control of data

·         Dependence on the provider for security

The CIO and his or her team are the main players to address the integration issue.  Although the next two points also require the IT organization’s participation and input, these are matters that must be addressed upfront in the agreement itself.

Risk of loss of your data is paramount.  In the event that the SaaS provider is unable to provide the support anticipated, it is essential that you have access to the applications as well as your proprietary data.  Inability of the provider to provide support may happen for a myriad of reasons such as bankruptcy of the provider or a real or threatened patent infringement claim and subsequent injunction.  The preferred approach to protect against such loss is to insist that the provider place its code into an ESCROW account.  Language can be drafted which will instruct the trustee  of the escrow ( an independent and trusted third party) to release the code to the beneficiary (i.e. you) upon the happening of certain events which are defined in the escrow language in your SaaS agreement.  One shortcoming to this occurrence is the downtime that may be involved in getting your systems up and running, but this is a necessary protection that you must include in your contract.

Transition assistance is another item to consider.  In the future you may wish to change the SaaS application currently in use.  Language should be included to require the provider’s assistance in developing the data migration strategies and the procedures to be followed so you can move your data to another application.

Since the SaaS model is economical by nature (see Wikipedia definition above), traditional discounting expectations are not available.  Pricing is based on users or seats.  The more users subscribed, the more likely the cost per user can be discounted.  So plan accordingly and try to build in volume discounting per blocks of users.

Other items Gulesian notes for inclusion in the agreement are:

·         Service Level Agreements (SLAs) regarding

§  Availability

§  Response times

§  Notifications of outages

·         Regulatory compliance

·         Data integrity

·         Data Privacy

·         Frequency of backups

·         Disaster Recovery

Gulesian’s article hits the main points and I highly recommend it to my readers.

 

 

10 Reasons to Outsource

 

This post is aimed specifically at the SMB enterprise and those consulting such enterprises. Recently in a post to this blog on February 3, 2008, I posted an article detailing a checklist for those enterprises that have already faced the questions on whether to outsource or not entitled Checklist Before Outsourcing Your IT.  That article has attracted a large number of readers.  In the article that follows I hope to aid those SMB’s that are still grappling with the decision on whether such a move is in their best interest.  In my research I have found an article written by Rojo Sunsen entitled 10 Ways Outsourcing Can Help Grow Your Business.  Sunsen succinctly defines outsourcing and then follows this definition with a rather direct and to the point list on the benefits to the enterprise.  I have paraphrased Sunsen’s list below; however I highly recommend the complete article in order to gain the fuller picture and what such a move can do to grow your business.



1. Employee training is reduced and allows such time to be directed to the company’s core competencies.

2. Capital outlays for equipment and software are reduced and can be placed into more revenue generating endeavors.

3. Save on the expenditure of employee recruitment to fill positions for intra-company administrative functions.

4. Hand-in hand with point #3 above is the time that is saved performing certain administrative tasks that are ancillary to the enterprises core functions.

5. Yet another savings to points #3 and #4 above are the employee benefits costs that are no longer required such as “taxes, medical, vacation time, holidays, worker’s comp., unemployment costs, etc.”

6. Office space opens up which could be better used performing the tasks required on the revenue side of the business; or alternatively, space could be sublet or a company’s leasing requirements can be reduced.

7. Order processing and delivery of products or services can be enhanced thus creating better customer satisfaction which can result in future return business.

8. More emphasis can be placed on increasing market share with the abovementioned improvements and savings.

9. In line with point #8 above is the ability to accept larger orders or take on more orders due to the economies of scale which should come about due to the outsourcing.

10. Lastly, your outsourcer can become a valuable ally in your marketing efforts and provide an additional outlet and/or network of customers.

 

Implicit in the above savings tips is the ability to redirect funds usually budgeted for the administrative side of the business and put these monies to better use on the revenue generating side of the P&L.

China: The Next India for IT Outsourcing?

 

Well we’ve all guessed that the question in the title of this post was coming. It seems that the answer is obvious. As wages increase for the software engineers in India’s silicon valleys of Bangalore and New Delhi, what self-respecting cost-cutter wouldn’t look elsewhere? Not so fast my friends. For a full understanding of the pluses and minuses of a move to China read the article in the blog Recruiting in China entitled China Marches into Outsourcing. The author has an interesting insight into the workings and plans for China’s information technology outsourcing industry.


India was there before China with BPO, Business Processing Outsourcing. Their revenue for 2007, $18 billion, dwarfs China’s for the same period. The author does make an observation that some may take exception to regarding the ability to speak English. I leave it to the reader to make your own determination. Here is the direct quote:


With its history as a British colony, India has workers with strong English skills and familiarity with Western culture. That gives companies there a big edge when bidding for jobs that require reading reports and talking to Americans.


I always get a little nervous when a totalitarian dictatorship comes up with a “plan”, anyone remember Comrade Stalin’s 5 year plans? Well it appears that our friends in the PRC have come up with one called the “Thousand, Hundred, Ten” project. The title is derived from China’s plan to situate 1000 Chinese outsourcing vendors in 10 cities servicing 100 foreign clients. The plan targets foreign clients other than the current Asian clients and moves the vendors out of the bigger and more familiar Chinese cities of Shanghai, Beijing, and Shenzhen to the less costly towns for housing and wages of Wuhan, Jinan, and Changsha. Government incentives abound from two-year tax waivers to subsidies for employee training to cash infusions for certain industry sectors (e.g. $56 million for the animation industry in Changsha).


China does have some hurdles to overcome. Most of their current IT outsourcing is to Japanese firms. The outsourcers that have set-up shop in Changsha are relatively small and prone to failure. The work performed is not the glamorous engineering and design, but the more mundane coding and software testing. Consequently the talented engineers leave for the more exciting cities on China’s coastline with more opportunities.


Search, as you may, for any mention of the over 500,000 Chinese in re-education camps (we call these political prisoners) or for any mention of Tibetan monks being beaten, but you will not find it. I’d put that down as another hurdle China needs to overcome.


Disaster Recovery: 6 Points to Know

Maybe you’ve seen this commercial. A maintenance man at a power plant is mopping the floor of the control room of a power plant. He accidentally knocks over a cup of coffee sitting on the control panel and the metropolis in the background suddenly goes dark. The maintenance man doesn’t panic. He quickly goes over to the ‘red button’, pushes it, and the “Energizer Bunny” suddenly drops down from his hidden compartment in the ceiling and attaches itself to the control panel. The bunny then begins to bag his familiar big bass drum ferociously. Sparks begin to fly and all of a sudden the city’s lights come back to life and all is well again. This is a light-hearted example of a very important issue.  The “Energizer Bunny” in this commercial is an example of the power plant’s Business Continuity planning. The point is that bad things happen and an enterprise has to be prepared to deal with these bad events.

 

The Blog 3600 Vendor Management has published a very helpful article regarding Disaster Recovery entitled An Outsourcing Vendor’s Business Continuity and Disaster Recovery Plan. In it the author discusses some essential points that any Outsourcer should consider when contemplating their Disaster Recovery Plan. Since the Blog 3600 Vendor Management’s stated purpose is “to impartially discuss the down-to-earth, day-to-day fundamental basics of outsourcing … thereby make you a more effective outsourcing leader”, I have deferred to their judgment and included this post in the Outsourcing category of my Blog. I would, however, like to point out that the following points seem to me to be universal (See the “Energizer Bunny” discussion above) and should be easily applied to any IT department other than an Outsourcing Vendor. The following are those salient points contained in the 3600 Vendor Management article cited above to consider for your Business Continuity Plan:

 

  • Consider the Impact, not the Event - Generally speaking there are four types of impacts that you need to plan for: loss of people, loss of facilities/building, loss of connectivity, and loss of applications. Any given event can cause one or more of these impacts. For example, a political coup could cause your operations team to have insufficient quantities of personnel (loss of people) and loss of connectivity (if the telecommunications company shuts down). Plan for the impacts, not the disaster.
  • Consider Time Frame of Impact - An impact can last 5 minutes, 50 minutes, 5 days, 5 months, or be permanent. When an event creates an impact, your plan should provide clear direction based on the expected duration of the impact.
  • Have Clear Procedures - A plan that says “open new center in a hotel conference room” is insufficiently detailed. The plan should have clear procedures for retraining, relocating personnel, reconnecting systems, and procuring goods/services necessary to recover. For example, relocation of personnel should have a clear plan for sources of transportation, roadmaps with specific routes to take, and temporary housing.
  • Plan for Staged Recovery - Few serious impacts can be instantaneously resolved. For example, telecommunications circuits are generally recovered one at a time. People will return to work slowly.
  • Consider Side Effects - A major weather disaster is typically followed by disease. So, while a hurricane is unlikely to cause a loss of people, the cholera, stomach diseases, or other health concerns could.
  • Test the Plan - Finally, test your plan at least once per year by first calling a pre-planned meeting and role-playing resolution and actions. Later, call an emergency meeting when leaders are not prepared. Take notes on the actions (do not critique in the middle - let the disaster and recovery unfold). Afterwards, analyze the actions and provide feedback. Expect your business continuity and disaster recovery plans to improve each time you rehearse.

India: Too Much of a Good Thing?

I recently came across a very interesting article. The article begins by stating what most of us already know, (i.e. more than two-thirds of companies outsource their IT services and India gets a large chunk of that business). Be patient while reading this article and get through that first bit of rehashing the already known facts. The article sites some very interesting and reputable statistics which puts the current situation into a different perspective. It brings into question what I alluded to in the title of this post, when you come right down to it will the infrastructures of India keep pace with the massive rate of growth of the IT service providers or will such infrastructures collapse from India’s inability to repair and replace or build new infrastructures.

Let’s start off with some one of those facts from recent studies:

The number of developers in India who service primarily US markets is 250,000. In the United States there are about 500,000 developers, where roughly half are in product development. This makes the Indian programmer pool equal to the available domestic programming pool.

Indian software exports alone exceeded 17 billion last year, representing a four billion increase in one year (Gartner Group).

Bangalore has built a sort of Silicon Valley a few miles out of town. However experts are beginning to wonder if the Bangalore infrastructure can hold up under the intense pressures put upon it from the ever increasing expansion. Continuing on with some more of the facts:

Now Indian IT professionals, with their newly found wealth, have continually been buying motorcycles and cars adding 900 a day to the already overcrowded streets (The Bangalore Paradox).

Other problems include “a water shortage, inadequate sewers, and an erratic power supply” (The Bangalore Paradox).

As a user (or should I say hostage or victim) of the Chicago metropolitan highway system, the next fact I can particularly empathize with the IT professionals of Bangalore:

The poor road systems make a small 7 mile drive take roughly an hour to complete.

The Gartner Group reports further that:

A survey of 25 large organizations with a combined $50 billion in outsourcing contracts found that 70% have had negative experiences with outsourcing projects and are now taking a more cautious approach. One in four companies has brought outsourced functions back in-house and nearly half have failed to see the cost savings they anticipated as a result of outsourcing” (Gartner Group). Also, a reported 20% of outsourcing deals do not produce cost savings while 10% of those deals actually wind up increasing costs. In 2005 alone, 50% of all outsourcing projects will not deliver their expected value and will be labeled unsuccessful (Gartner Group).

Others see the outsourcing possibilities as endless. 

General Electric’s “70-70-70″ plan is an example of this. GE plans to outsource “70 percent of its head count, push 70 percent of that outsourcing offshore and locate 70 percent of its workers in India.” (Gartner Group).

The future of US outsourcing to India remains to be seen. Will they be able to keep up with the increasing demand and concomitantly provide the quality and timeliness expected? As a betting man, I’d have to say yes. There is just too much at stake to let this deteriorate and fail.

The IT Worker Shortage: Practical Considerations for Tech Buyers

I recently had a fellow practitioner, Tim Nuckles, ask me to review an article he had written. As the title above suggests, his topic is very current and provides some very insightful suggestions. In keeping with my stated goal for this Blog, I highly recommend it to me readers. 

His premise begins by stating that the IT worker shortage, as most IT Directors and HR departments can attest, is real. Nuckles lists and analyzes some very real and helpful alternatives to help the “Tech Buyer” navigate through this present condition.

It follows that a tight IT worker market affects not only the organization seeking such workers, but also the outside vendors who employ these workers in great numbers and count on them for their “engagement capacity and growth opportunities”.

Nuckles suggests the following when deciding to use outside vendors for IT projects:

1.     RFI/RFP process:  Streamline the response time. Tailor your RFI to the specific requirements of the project. In order to obtain more responses in a faster time, layer your RFI’s by making them subject to amendment and supplement. Request only the most detailed information from the most qualified vendors. Put all standard procurement terms in an attachment or direct the vendor to a website.

2.     Pricing: Now may not be the time to squeeze a vendor on their rates. The alternative is to leverage the vendor’s refusal to discount to extract better fee holdbacks, software buyback options, creative testing and acceptance models, and penalties for milestone delays.

3.     Bundling: The prospect of future revenue for future products and/or services may incentivize the vendor on current pricing or lock in the future rate.

4.     Get the Vendor’s A-Team: Identify those resources through referrals, demos, and test cases. The on-site presence of such individuals assures the project will move forward at a faster pace. Be cautious about demanding a fixed fee arrangement. Such arrangements cede more control to the vendor and as cost margins grow the A-Team will get pulled and put on more profitable projects.

5.     Offshore Outsourcing: This may have its pricing benefits but comes at a cost in other areas.

6.     Off The Shelf vs. Customization: Consider changing your requirements to match the OTS functionality as much as possible.

Nuckles discusses all of the above keys issues in greater detail in his article.

Tim Nuckles is a Wisconsin technology attorney whose practice is dedicated to technology transactions and the workout of troubled technology projects. You may visit the firm’s web site at www.nuckleslaw.com.

Checklist Before Outsourcing Your IT

As a practicing attorney involved in contract drafting and negotiation, I know the value of checklists. As I am sure my fellow legal colleagues can relate, one of the things we dread is a client who asks “Did you consider …?” or, “What about …?” If our only response is something like, “Let me check that contract again and get back to you”, we’re in trouble. Contract drafting is an attempt to anticipate as many reasonable consequences as possible. When I was lecturing in Contract Law, I would tell my students that contract drafting anticipates litigation (i.e. if you do or do not act in the following manner, then the liability shall be as follows). Robert Bell has created an IT outsourcing checklist in his article 31 Risk in Offshore IT Outsourcing Contracts: Or Buying Promises.  I cannot vouch for its completeness, but I thought it a good idea to post it here as a tool to be used in your decision making process. In order to reprint this checklist, I must follow the “Reprint Guidelines” and publish the entire article, which follows:

No matter how much due diligence you attempt, making a decision on contracting with an onshore or offshore IT service provider is much like buying promises. To some extent you are going to have to trust in your selected partner to be committed to providing your company with the high quality services that they have promised. Your lawyers will surely not agree but offshore contracts are only worth the integrity of the company that you are contracting with. Dun & Bradstreet does not include this metric (integrity) in corporate profiles yet and it is not on a credit report either. One of my partners in Brazil would often tell me “Henry we are highly motivated for this opportunity”, but I did not fully understand the value of that statement until we got into the trenches together.

Here are a few of the promises you are accepting or questions you may have doubts about when signing that offshore IT staff augmentation or support contract:

1. Will I really get the hours I am paying for?
2. Is my intellectual property and information secure?
3. Am I really going to be provided with qualified professionals?
4. Will billing rates go up after I train the new team in my business?
5. Can I reach this vendor when I need immediate support?
6. Will this vendor work with me when the going gets rough?
7. Is this a stable country politically, socially, and economically?
8. Are currency exchange rates an issue?
9. Is this a safe country for business travel?
10. Is this vendor’s location in a safe part of town?
11. What is the cost of business travel to this location?
12. What is the cost for offshore professionals from there to travel to the U.S.?
13. Can professionals at this location get a U.S. passport and visa for U.S. visits?
14. Are U.S. contracts legally binding in this country?
15. How long does it take to get a visa and passport for team members to make training and onsite orientation trips to my location?
16. What will it cost for visas and passports for your offshore team?
17. Will the offshore team have someone full time who is experienced in managing offshore projects?
18. Is this a stable company, i.e. good credit and strong experienced management?
19. Does this vendor’s company have the interpersonal skills to work with my company?
20. Does this offshore vendor have executive management that speak English and will be responsive and share your since of urgency?
21. Are this vendor’s team management and executive management going to be available in your workday time zone on short notice when you need them?
22. Can this vendor grow with your companies needs?
23. Do they have commercial liability insurance, errors and omissions insurance?
24. Can they buy commercial liability insurance in their country?
25. Will they work in your workday time zone?
26. Does this company have a secure network infrastructure?
27. Is their network infrastructure professionally designed and firewall protected?
28. Is their facility physically secure?
29. Are extreme weather conditions a factor affecting travel, security, or work schedules in this country?
30. Does this location pose natural disaster risk to your business?
31. Is this vendor going to be flexible as your needs change?

No matter how much time on money you spend developing a clam tight contract with an offshore outsourcing provider you never want to have to consider international litigation or international arbitration for contract disputes. Unless your needs are well defined and static, which I have never seen, the requirements better be very general in that contract or they will need review and changes before the ink gets dry.

In any offshore project establishing good relationships are key to clear communications. Vision TRE has been nurturing relationships with our offshore partner locations in Brazil and Panama for years. We have business relationships in South and Central America that have been proven dependable over the years. Integrity, trust, mutual cultural respect, and a shared since of urgency make these relationships valuable to any company that contract with us to establish an offshore team.

About Robert Bell

 


 

We are a small family run Online Cosmetic Retail store at www.cosmeticsfairy.co.uk with great prices and useful cosmetic information / tips pages.


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India: Outsourcing Disrupted Due to Cut Undersea Cables

FOXNews.com has picked up an Associated Press story that Wednesday, January 30th, two undersea cables were cut resulting in a huge interruption to India’s bandwidth. The Internet Service Providers' Association of India reported that “the country had lost half its bandwidth.” The cut cables, which lie in the Eastern Mediterranean Sea, first affected the Middle East, including the Dubai Stock Exchange. The slowdowns and outages quickly spread through the Persian Gulf States, Pakistan, India, and Bangladesh. Customer Service call centers located in India were severely impacted as engineers attempted to reroute the traffic through satellites and cables in Asia. As of now the cause of the cuts is unknown. It is estimated that repairs to the cut cables could take up to a week.

More Growth in Outsourcing in 2008

InternetNews reports that Gartner predicts outsourcing will grow by more than 8% this year to approximately $441 billion. The trend in this continued use of outsourcing seems to be moving away from large vendors to more of the smaller vendors with specialized products or services that can meet a company’s particular needs. Gartner’s survey results indicate a recent change in company’s strategies and priorities vis-à-vis outsourcing. There has been a decidedly huge increase in the percentage of companies from 2005 to today that have established a disciplined process in their approach to determine if they will outsource.

"[We're] seeing our clients set up internal processes and applications to create a service model for other internal organizations to leverage," Hemant Ramachandra, managing director of BearingPoint's Technology Solutions unit, wrote in an e-mail to InternetNews.com. "This can be software-as-a-service or even application as a service. Setting up the right governance structure is critical to ensure that outsourcing is leveraged appropriately."

In 2007 IBM increased its market share for IT outsourcing to 8.1%. EDS was second with a 5.3% increase followed by a 3.3% increase for ADP.

In know what you’re thinking. Woe is me. All of our jobs are going overseas. This is the initial knee-jerk reaction when one hears about outsourcing and its inevitable increased use. But this does not have to be the only truth. As our economy evolves and adapts to the changes in our society and new needs arise, the way we work and the makeup of our workforce will necessarily evolve as well. The largest increases in new businesses in the US are in small business and a large percentage of those new small businesses are home based. New companies will also need to be created to meet the changing model from ASP to the new approach of Web-based Software as a Service (“SaaS”), which allows businesses access to software functionality for a more cost effective monthly fee instead of the cost of the application’s license fee and the upfront cost of more hardware. Who these new companies will employ is yet to be determined.

Web Servers Run Faster with the Bee Dance

Scientists have figured out a way to cut down delays when internet surfers are trying to access popular sites and as a result have increased revenues by 20% for one web hosting company. In order to improve the internet server response time to changing user demand, scientists modeled the server system after the dance that honey bees do in order to redirect their fellow bees to more plentiful nectar. It’s called the waggle dance and the end result is a way to redirect the hive’s workforce at that moment to a flower patch with a better nectar supply, directing the bees to the type of flower, distance, and direction. For the bees, this “feedback loop” continually identifies the shifts in nectar allocation and works to equalize their retrieval system.

Web-Hosting companies assign certain servers to internet sites. Spikes in user demand flood the designated server for that site thus causing lockouts or delays, while other servers sit idle. Users leave the site in frustration taking the potential for revenue generating activities with them. Researchers have applied the bees idea of feedback to allocate more plentiful supply (in this case server space) to increase efficiency of the server system. The end result is increased revenues.

To learn more about the scientist advertisement system, which replaces the bees waggle dance, read Bryn Nelson’s column in MSNBC’s Technology & science.

IBM Employees in India

IBM has revealed that it has approximately 73,000 employees in India. Based on the headcount at the end of 2006 of 355,766 employees and a projected rate of growth equivalent to 2006, IBM now has approximately 20% of its workforce in India. And why not? India offers a skilled workforce without the high cost of labor that usually accompanies such workers in the West. The projected annual revenue from the Indian market for 2007 at $1 billion is yet another reason for IBM to ramp up its workforce in the sub-continent. The BRIC countries (Brazil, Russia, India, and China) are expected to have high growth rates in the coming years and IBM Chairman, Sam Palmisano, wants to direct more of IBM’s investments into these emerging economies. Jesse J. Green Jr., IBM’s Vice President of Financial Management, is optimistic and stated, “we see continuing good stability in the BRIC countries in general and good opportunity for growth in those countries as well.”  (See Associated Press article)

 

I think that it is commendable that IBM execs are aware of the labor savings and the potential for increased revenues from emerging markets. Many of us have direct investments in IBM or indirect investments through 401K’s and other investment funds. As a public company IBM is acting according to its mandate to increase investor value. However as a good corporate citizen there are other considerations as well, such as social, political, ethical, and religious. How much outsourcing of skilled labor is too much outsourcing? My only cautionary note is not to overdue and abuse the situation. Employee growth in these emerging markets should be, and I am sure that it is, managed growth to meet the needs of the growing market but not at the expense of these other considerations. We all remember the dot.com boom and then the bubble that burst. We are all aware of the real estate boom of recent years and the subsequent subprime mortgage bubble that has panicked much of Wall Street and Western Europe as well as investors from the Middle East and the Pacific Rim. India is a nuclear power and borders Pakistan another nuclear power and its antagonist. Does IBM really want to put all of its eggs in one basket?