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Wednesday, Jun 04, 2003

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GE volumes to software vendors seen growing

Abhrajit Gangopadhyay


THE business volumes to Indian software vendors from GE are likely to grow in the current financial year even as GE caps its software outsourcing to local vendors at $400 million.

GE, which is betting heavily on China for its outsourcing efforts, was likely to cut rates to Indian vendors on the back of committing more work, analysts say.

Most of the GE business to India are executed by Satyam Computers, Mascot Systems and privately held Patni Computer Systems. "We expect a surge in volume from GE though the firm may cut rates with its vendors when annual negotiations come up", a software analyst with a European brokerage said.

Mascot Systems, which derived close to 51 per cent of revenues from GE efforts in the last financial year, indicated that there would be "continuous growth" in that account going forward. However, GE's contribution shrunk to 42 per cent in the fourth quarter of last fiscal, following the acquisition of consultancy firm eJiva. GE accounted for close to 70 per cent of Mascot's total offshore efforts.

The country's fourth largest software exporter, Satyam Computers, derived close to 15.96 per cent of its January-March quarter revenue from GE engagements.

According to analysts, the company's contribution to Satyam's top line is likely to go up year-on-year even if a possible downward rate revision takes effect.

Patni's main client, GE, that accounts for close to half of its revenue and has a nearly 10 per cent stake in the firm, is expected to ramp up orders. Patni officials were earlier reported to have indicated of "significant" growth in GE account.

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