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V. Rishi Kumar

Asia accounts for only a small part of Capgemini's business

Hyderabad March 16 Indian IT technology solutions providers would continue to tap the growing opportunity in Europe through accelerating strategic mergers and acquisitions and possibly setting up near shore centres, according to Mr Kris Pote, Vice-President, Capgemini Belgium.

Witness to robust about 7 per cent growth in Europe last year, the technology business is projected to grow much faster than other markets, according to reports from research firms such as Gartner, Forrester and Quint Wellington.

Mr Pote told Business Line that Indian IT services providers would grow in Europe through M&A activity. Though this may mean smaller and yet niche acquisitions, this would provide them direct presence in a new and yet expanding market, offering local resources and also complementing with market insights.

Right strategy

The Capgemini official was part of the touring delegation of journalists from France, the UK and Belgium seeking to assess the market out here. They visited Kanbay, now part of Capgemini and Microsoft facilities. Mr Pote said it would not be easy for Indian companies to scale up in Europe unless they either partner with local players or make acquisitions.

In a way this is a strategy which some of the American and European companies such as IBM, Capgemini and EDS have adopted in India. However, he felt that Indian players would be able to reach out only with some niche services targeting verticals such as financial services and pharmaceuticals.

More Acquisitions

With the acquisition of Kanbay, a specialised player in the financial services market, for about $1.25 billion, Capgemini now has about 12,500 people in India and added two major centres in Pune and Hyderabad. The consulting major is strategising to expand this to about 40,000 people by 2010.

Mr Pote said M&A would also be necessitated by the need to have some near shore centres for some of the business opportunity.

A lot of business is generated from Government and all of them are not handled by outside agencies. However, some countries like England are beginning to open up this business.

More Stories on : Software | Mergers & Acquisitions | Overseas Investments | Marketing Research

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