The Hindu Business Line : GE chooses Polaris as preferred vendor

GENERAL Electric (GE) has chosen Polaris Software as its preferred vendor for its domestic software needs, sources said. The deal is likely to give a boost to Polaris' business volumes going forward, even as the rate is $12 (Rs 528) per person per hour, sources added. Polaris did not offer comments citing "quiet period" prior to its earnings announcement.

"It's a favourable development for the company ... it can get business from GE firms like GE Plastics in India ... but the only concern is the rate," an analyst with a foreign brokerage said. "Traditionally, GE is a hard taskmaster and is known to squeeze clients for rates," he added.

However, according to another technology analyst of a domestic brokerage firm, the deal could edge up the operating margins of Polaris going forward. "Dollar billing in Indian services, despite a hardening rupee, is good," he said. "We are not very sure of the size of GE's local IT needs, but it could well be a significant volume driver for Polaris," he added. Polaris derived 10.4 per cent of its third quarter revenue from Indian operations.

"Our one concern would now be whether Polaris would increasingly focus on domestic deals ... there could be a overhang on the order visibility from the global market," the analyst said.

Polaris had earlier signed on GE Power Systems for ERP implementation. GE outsources a significant part of its IT needs to Indian vendors like Satyam and iGate Capital.