Financial Daily from THE HINDU group of publications
Wednesday, Sep 29, 2004
PeopleSoft revenues not at risk: Hexaware
Recently in Frankfurt
THE senior management of Hexaware Technologies claim that they see revenues from the PeopleSoft relationship reaching the targets set for 2005.
Oracle's recent tender offer for PeopleSoft Inc, cleared in the US with the District judge ruling in its favour and with the EU clearance expected soon, has the potential to put PeopleSoft revenues at risk.
Hexaware is one of the top five vendors for PeopleSoft Inc globally and the number one vendor from India. The PeopleSoft practice of Hexaware accounted for nearly one third of its revenues in the first half of 2004.
Asked about the impact of Oracle's bid for PeopleSoft on Hexaware's revenues, Mr Rusi Brij, Vice-Chairman and CEO of Hexaware said, "The visibility for next year (from the PeopleSoft account) is sufficient for my targets for next year (i.e. financial year 2005 - January to December). For 2006, I do not have visibility at all. As far as direct business is concerned, where we go out and work for our own clients using PeopleSoft, I do not see much risk in that business. These are clients who have invested in the software and want it to be maintained. Hence, they are annuity kind of relationships, which are for three or five years."
"The next is our ISC (India Solutions Centre for PeopleSoft). I cannot speak about this, but I do not believe that most of our next year's business is at risk."
There are over 1,000 PeopleSoft certified professionals working for Hexaware on two business relationships models.
Hexaware set up an India Solutions Centre on a BOT (build-operate-transfer) model for PeopleSoft at Bangalore. This centre handles a mix of consulting and implementation assignments and maintenance work for PeopleSoft. Over 500 professionals work on this relationship.
The second is the PeopleSoft practice in which Hexaware provides PeopleSoft offerings to its own clients directly. This involves a big chunk of maintenance and upgradation work.
For instance, Hexaware roped in Citigroup as one of its key clients by offering PeopleSoft services directly. Nearly 650 employees work on this practice. So, in a sense, PeopleSoft is both a partner and competitor for Hexaware.
One of Hexaware's key clients - Exult Inc - was recently acquired by Hewitt Associates, a global human resources outsourcing and consulting firm. In June this year, Hewitt and Exult entered into a definitive agreement to merge their operations.
Exult is one of the fastest growing human resource business process outsourcing firms providing solutions to global corporates. It accounted for over 10 per cent of Hexaware's revenues.
Responding to the business potential emerging from the recent merger on this client account, Mr Brij said, "It (the business from Exult) will only get better. We are extremely positive and the client references are also good. In HR - IT, we are the dominant players in India and we should be able to convince Hewitt also in HR processes. It is good, as Hewitt is a much larger player than Exult. We feel very confident about this relationship with Hewitt."
For strategic reasons, during the course of this year, Hexaware broadbased its enterprise solutions practice beyond PeopleSoft by adding SAP to its range of offerings.
In this recent built practice, Hexaware bagged two orders for $2.6 million. It has over 40 professionals working on this practice.
Spelling out the strategy for SAP, Mr Brij said, "What is our story in SAP? It is HR. We can convince any HR director that we are the best Indian vendor in HR. We have done it in PeopleSoft and we will do it in SAP. HR is where our differentiation lies and that is where we will work on."
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