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New York City, June 15, 2006 - Sakonnet Technology, the leading provider of energy trading and risk systems under the Software as a Service (SaaS) model, is cited as a leader in "Smarter Offshoring", in the June 2006 issue of Harvard Business Review. The article is by Diana Farrell, head of the McKinsey Global Institute, McKinsey & Company's economic think tank in San Francisco.

Farrell wrote: "Pioneers such as Amazon.com, Telefonica, Intel and Sakonnet Technology have recently established or announced plans for offshore centers in Cape Town, Tangier, Cordoba and Rio de Janeiro, respectively."

The article outlines growing problems in offshoring "hotspots" like Mumbai and Bangalore, of salary inflation, high turnover rates, tougher recruitment and overloaded public infrastructures. She suggests a company selecting an offshore location should step back and apply a rational decision-making process, rather than "going with the pack".

One approach Farrell cites is comparing candidate cities' expected present values. Under this method, a company first defines its various business needs for offshoring and applies weights to them, and assesses its level of risk aversion. Then it researches each city's prospective all-in labor and other costs, the depth of its relevant talent pool, the expected medium-term quality of its business environment and infrastructure, and finally its risk profile (for example, degree of political stability, and how well IP rights are protected).

Two specific reasons for Sakonnet choosing to locate in Rio were: identifying proactive managers, along with highly-talented Java developers (many of whom have advanced computer science degrees from universities in Rio); and the time zone overlap with Sakonnet's other offices in New York and London.

Alarik Myrin, Sakonnet's Chief Technology Officer commented: "We have well-organized, high-energy professionals in Rio in close dialogue with their New York and London colleagues. This is key to our agile development approach and delivering five new production releases to clients a year."

The complete article "Smarter Offshoring" can be accessed and downloaded through the Sakonnet Technology website www.sknt.com.

Eric Min

About Sakonnet Technology
Sakonnet Technology is the market leader in Software as a Service (SaaS) for energy trading and risk management. Sakonnet's expert international teams provide an unrivalled level of hosting, support, upgrade and consulting services linked to its advanced Xenon® platform. These services along with Xenon's streamlined interfaces and workflow, transform the end-user experience, resulting in higher productivity, stronger risk control and a trading edge. Sakonnet addresses the needs of energy companies, banks and hedge funds trading in power, natural gas, crude oil and related markets and has offices in New York and London.

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