Satyam Computer Services was rebranded Mahindra Satyam in June 2009 and is in the process of merging with Tech Mahindra, but these corporate changes have not changed the company’s status as one of the top half-dozen outsourcing firms rising from India.
Satyam suffered through a major accounting scandal back in early 2009 when founder and Chairman B. Ramalinga Raju admitted overstating profits for several years. A few months later Tech Mahindra, a Mahindra and Mahindra owned company, bought a controlling interest in Satyam, cleaned up the books, renamed the company Mahindra Satyam, and began an aggressive expansion campaign focusing particularly on North America (approximately half of the $1.3 billion in 2011 revenues came from North America). The new combined corporate entity is expected to have annual sales in the range of $2.3 billion.
In a recent interview with Nearshore Americas, Tech Mahindra (Americas) SVP Vivek Kalra and Mahindra Satyam SVP (Global Head BPO) Anup Kumar both emphasized that maintaining their role as a leader in business intelligence was a key part of their strategy. Mr. Kumar also noted the company will be pursuing selective value-added mergers and acquisitions such as their recent acquisition of the international operations of call center provider “vCustomer.”
In a recent interview with the Wall Street Journal, Mahindra Satyam’s Lakshmanan Chidambaram, Senior Vice President of Sales, provided some details on their recent sales pipeline and offered some insights into Mahindra Satyam’s strategy in North America for these uncertain times.
Chidambaram stated that Mahindra Satyam is working on a pipeline in North America of 17 or 18 deals valued at upwards of $30 million each. The biggest of these projects tops out at $110 million over three to five years. From a sales strategy point of view, however, he points out that just about all of these deals are designed around cost-cutting or functional expansion of core business areas, and that these are not “discretionary” projects where businesses are investing large amounts of capital to enter into or develop new business areas.
Chidambaram also noted that North American sales for the fiscal year ending March 2013 were on pace to exceed the 12% increase seen from March 2011 to March 2012.
Management at Tech Mahindra and Mahindra Satyam decided early on in the merger process that the best way to grow the new business was to focus on the synergies between the new companies, and to “extend and accelerate” into areas that one or both companies already had expertise in. This process is already well underway, especially in North America as described above, where Mahindra Satyam already had a strong business presence and excellent reputation.
Bringing the two companies together not only greatly broadens Tech Mahindra’s almost exclusively telecom-focused business, as Kalra pointed out, but also creates significant synergies as it gives Mahindra Satyam’s engineers and developers access to the technical expertise and industrial knowledge of the international conglomerate Mahindra Group. The merged company will still derive around 47% of its revenues from the telecom sector, but the remaining 53% of revenues cover a broad range of verticals ranging from manufacturing to retail to technology and media.
Kalra also made it clear that the new merged Mahindra Satyam business entity was not planning to become a full-service cloud provider, but rather a “cloud enabler.” That is, a consultant with businesses of all sizes to help them understand what migrating to the cloud can (and can’t) do for their business, and helping them come up with a long-term strategic plan to develop the IT infrastructure needed to grow at a price they can afford.
North Dakota Delivery Center
Mahindra Satyam announced the opening of a new delivery center in Fargo, North Dakota on June 19th. This facility is designed as a full-service BPO and IT services nearshore delivery location, and is being developed as a multi-client operational center (with Cargill Global Business Services as the first major client).
Kumar commented that the new Fargo Delivery Center represents a significant expansion of Mahindra Satyam’s already large footprint in North America, and is just one of several similar strategic partnership/onshoring projects planned in the next few years.
Mahindra Satyam’s Workspace as a Service (WaaS)
The cloud-based Software as a Service (SaaS) industry has matured in the last few years, and major players in the industry today have broadened their services beyond “utility-style” access to apps on demand. More comprehensive and customizable cloud services such as Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) have been developed, and Kalra described Mahindra Satyam’s WaaS as their entry into the PaaS space.
WaaS is an end-to-end IT solution based on the latest virtualization technology from Microsoft, Citrix and Liquidware Labs, and allows users to customize definitions for workspaces from an extensive service catalog. WaaS can be hosted in the client’s own data center or it can be hosted remotely on Mahindra Satyam’s corporate servers. One of the most important benefits of WaaS is that workspaces are mobile, and that employees have access to a “personalized virtual desktop” using any device (PC, laptop, tablet or smartphone) anywhere there is Internet access.