• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Moumita Bakshi Chatterjee
Adith Charlie

New Delhi, Mumbai, Jan. 8

The nervousness among clients of Satyam – following a massive accounting fraud – is now apparent.

Even as Satyam customers officially continue to be in a wait-and-watch mode, many IT vendors claim that there has been a rush of calls from some clients who are keen to explore the possibility of migrating projects.

In effect, behind-the-scene exploratory talks have picked up pace just a day after the shocking disclosure on financial irregularities by the Satyam promoter, Mr Ramalinga Raju.

When contacted by Business Line, a Ford spokesperson said, “All I can tell you is that we are currently evaluating the situation and not prepared to make any comments at this time. Please note though that as a matter of policy we never discuss contract arrangements with our suppliers.”

FIFA said it is monitoring the situation related to Satyam; Satyam provides services of technical support to FIFA.

“At this stage and until we have more information, it is too early for FIFA to make any further comments on the matter. We trust you will understand our position,” FIFA said.

However, not all clients of Satyam are in ‘wait-and-watch’ mode.

A CEO of a mid-sized Delhi NCR company pointed out that it has already replaced Satyam in 2-3 accounts immediately after the aborted Maytas bid, and is now in “serious dialogue” with 6-7 other clients in the aftermath of Wednesday’s revelations.

“Ironically, some of the application work that Satyam has been doing in the area of compliance and security is the one that is being re-looked at,” the official said.

Understandably, the vendors were hesitant to divulge the name of clients who are out in the market scouring for options.

A top official of a Pune-based firm said that he had received calls from three shared customers – one based in Singapore and two in US including an insurance company.

“These customers were mulling legal recourse and also wanted to know if we could take over some of the work. While we have said that we will technically be in a position to take over, we also advised them not to rush things and wait for more clarity,” he said.

Another Director-level official of a leading global IT firm which has a significant delivery base in India, said that the clients had become wary just after the World Bank episode.

“It had been brewing for a while although the magnitude took everyone by surprise. So far our teams were more on a stealth marketing mode, waiting for customers to indicate their willingness to move; but now every customer has started working proactively on back-up plans,” said the official, who did not wish to be named.

According to analysts, in every IT engagement, there are two clauses under which the contract can be cancelled; ‘termination for convenience’ and ‘termination for cause’.

Customers of Satyam could now invoke the latter; in which case the engagement could be terminated immediately without serving a notice.

A mid-sized Mumbai based company, which recently lost out to Satyam on a $15 million deal, is now confident of clinching it back.

Meanwhile a top-tier Indian vendor says it has been approached by three telecom clients of Satyam to transfer the engagement.

“These are telecom clients who have a sub $2 million deal, in the area of maintenance and testing. How far we are able to close the deal depends on the urgency from the clients’ end,” it said.

Market observers note that although clients would want to migrate to other IT vendors, they would prefer to engage with those companies with whom they already have some engagements going.

More Stories on : Software | Corporate Governance | Satyam Computer Services Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line