Mahindra Satyam eyes launch of new delivery center in 3 months

Wednesday, October 19, 2011

Indian software developer Mahindra Satyam will have a Spanish-speaking development and delivery center up and running in Latin America in 90 days, Arvind Malhotra, head of the company's Latin America business group, told BNamericas.

"Our Brazil center has served us well. We have Portuguese-speaking people there. But we are looking to open a Spanish-speaking center, which could be in Peru, could be in Argentina, could be Mexico," he said. "We're evaluating where business potential is higher, and also where staff is more available. So we'll make a decision on this and announce it in the next few months. The idea is to have two centers in Latin America, one Portuguese speaking and one Spanish speaking."

Mahindra Satyam has a Brazilian and a Mexican subsidiary, and Latin American headquarters are also based out of São Paulo. "We have about 100 consultants in Latin America. Most of them are not expats; they're local hires. And our go-to-market approach is to service MNCs [multi-national corporations] like the Chevrons and the GEs that have some offices in the region and need software development there, along with some local clients like [Brazilian construction conglomerate] Camargo Correa and including HSBC, which is an MNC, but we only do work for them in Brazil," said Malhotra, who is also the company's head of strategic accounts, public services and energy and utility businesses in the Americas.

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In Mexico, the company primarily services GE in Guadalajara, and in Argentina it is carrying out an Oracle (Nasdaq: ORCL) project with Danone that is being done in the US simultaneously.

"We've had some interest from Peru. We've been in dialogue with a financial institution there to open a development center that could be a Spanish-speaking development center. And we've had some interest from Venezuela with [state-run oil major] PDVSA, but we've been a bit cautious to pursue it further, given the conditions in that country," he added.

Mahindra Satyam's go-to-market strategy so far in Latin America has primarily been around financial services and oil and gas, but "with our MNC approach, we're hoping to get some more traction into other areas," Malhotra noted. "For example, we're in talks with Ford in Brazil to do some IT enhancements for their North American heritage systems. If we do that, we'd probably pick up manufacturing as a third vertical in Brazil."

As part of expansion plans, the company has been looking at inorganic growth in the region "quite a bit in the last 12 months," he said. "In fact we engaged with a couple of companies that were interested in that model, but nothing has come to pass and valuations have gone up quite a bit in the market." As such, management will wait a bit until prices start to come back down.

The executive estimated that the company does about US$10mn in business in Latin America, with deployments being about 20% SAP (NYSE: SAP), 20% Oracle and 60% Microsoft (Nasdaq: MSFT) and other technologies.

Before being taken over by Indian conglomerate Mahindra, the company was previously known as Satyam Computer Services - which was embroiled in scandal in 2009, when then-chairman and co-founder B Ramalinga Rajuor announced his resignation after telling the firm's board that over 93% - more than US$1bn - of the company's reported finances did not exist.

But the Satyam incident has not really affected business in the region. "When the incident happened, it was in 2009 and we had a very small operation in the region. There was some coverage of the news topic in the region; but we've since rebranded and that issue is behind us. We actually don't see that issue surfacing in any dialogue," Malhotra said. "In fact, our parent, the Mahindra Group, also has a presence in Latin America - they sell SUVs and other cars - and that helps us in a brand [recognition] perspective."

The company will also be the IT services provider for the 2014 World Cup in Brazil, as it was in the previous cup in South Africa, which will also help in the region with brand recognition, he noted.