Industry says cheers to Tech Mahindra, Satyam bid

BANGALORE, INDIA: So the mystery is over. Satyam has got a new hand to control it; and a chance to shed the image of "the fraud-hit Indian outsourcer"!

Immediately after winning the bid, Tech Mahindra has made it clear that it will give the highest priority to restoring confidence in Satyam.

Tech Manhindra chairman Anand Mahindra also said that he would personally reach out to Satyam's top clients including Citigroup, Cisco and General Motors.

Of course, this has given a breather to the India IT industry as a whole, because the scam and the uncertainty over Satyam had cast a shadow over the entire India Inc. Though only time can tell as to how the new deal would help revive Satyam, the industry feels Tech Mahindra winning the bid is a welcome development.

In the words of NASSCOM president Som Mittal the deal was synergistic for both companies. "All three bidders were worthy," he said, commenting on the bid process.

Expressing the relief that the Satyam issue is finally put behind us, S Gopalakrishnan, CEO, Infosys Technologies, said: "It is commendable that the government-appointed board at Satyam has been able to bring a closure to the uncertainty surrounding Satyam's future. The government has addressed the issue quickly and responsibly."

For Tech Mahindra, winning the bid also means the entry into a new vertical, as Wipro CFO Suresh Senapathy has observed. Saying that he was glad the Satyam bid process was successfully completed, Senapathy said, "Satyam will also bring in non-telecom expertise for Tech Mahindra."

It is this possibility of entering a new vertical that Chandramouli, director - Advisory Services, Zinnov Management Consulting Pvt. Ltd points to.

"Tech Mahindra will be able to de-risk from being a single vertical focused organization and will be able to acquire marquee clients going forward across other verticals," he said.

According to him, Tech Mahindra will be able to expand to various geographies using Satyam's spread and they will be in the league of top 5 IT services companies.

However, on the other hand, Tech Mahindra will have to deal with not just internal challenges of integration but also external challenges which would necessitate new business models and flexibility, he warns.

Moreover, "Tech Mahindra will lose its advantage as a niche player in a fast growing vertical and this would impact its competitiveness in the telecom space," Chandramouli points out.

So ultimately the outcome of the deal depends on how Tech Mahindra tackles the challenges of the new possibility!