Financial Daily from THE HINDU group of publications
Tuesday, Jan 22, 2002
Market conditions challenging: Raju
HYDERABAD, Jan. 21
THE Chairman of Satyam Computer Services Ltd, Mr B. Ramalinga Raju, has said while market conditions continue to be challenging in the near term, the outlook for the medium- and long term is positive.
"The economic slowdown has propelled large global companies to look for greater value in sourcing IT services and given Satyam's visibility today among CIOs and CEOs, we have managed to add more than 25 per cent of 27 new clients from Fortune 500 club,'' he said.
And, importantly, that more than 30 per cent of the new acquisitions were in the face of competition with the big five firms and systems integrators was indicative of this positive trend, he added.
Satyam Infoway dilution: Satyam is actively pursuing its plan to divest its stake in Sify with several investors, both domestic and global. It expects to complete the process soon. The takeover of Sify's software business will be effective from January 1, 2002 following the acquisition of Sify's software services division, which is subject to necessary approvals. The price of acquisition was pegged at $ 6.9 million, which was valued by an independent valuer.
Mr Raju said the services of Merrill Lynch had been enlisted to facilitate the choice of the suitor for the Sify stake. Without divulging the name of the companies with which Satyam was in parleys, he said this would be a win-win situation for both. Satyam Computer canl focus on services and Sify will benefit from pure Internet-related expertise.
"We are proactively taking initiatives to compete better in the global markets by systematically bringing down barriers between large players in the IT services sector and ourselves. We have also taken definitive steps to constantly improve our relationship management capabilities and domain competencies.''
Strategic initiatives: "I would like to highlight that more than 80 per cent of our IT services being delivered today were not part of our portfolio five years ago. Besides developing new services capabilities internally, Satyam has also pursued the strategy of building alliances with global technology leaders to service the needs of our customers,'' he said.
BPO: "While the country has witnessed a significant growth in the IT-enabled services and business process outsourcing (BPO) area, we are at this juncture closely evaluating the appropriateness of extending our services range to BPO. While no decision has been made, our position has been strengthened by the fact that we have partnered with Carnegie Mellon University and Accenture for quality standards.''
"A decision has been made to open an office in China at Shanghai in the next few days and we believe that there are many opportunities for providing services in a market which has witnessed a phenomenal growth. While understanding the nuances of operations there, we are visualising this to potentially serve as a hub for related markets.''
The company has initiated a major internal process to integrate all marketing and pre-sales process under a framework that addresses today's market and customer requirements. This is aimed at leveraging the organisation-wide framework that houses a repository of best practices and value creation opportunities.
While the company has removed about 80 persons from its rolls last quarter, it has plans to engage about 420 professionals over the next few months.
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