By Chris Whyatt
Satyam has been been snapping at the heels of the ‘big five’ vendors and claiming big wins across the Middle East. Virender Aggarwal reveals how it aims to cement and expand its reputation in the region
|~|Aggarwar2body.jpg|~|Aggarwal has noticed the bullish nature of the region especially in regard to deregulation of the market.|~|Fresh from being rated the top player in the fiercely competitive Indian vendor consulting market by respected global analyst firm Forrester Research, Satyam Computer Services is now talking about ruffling the feathers of the ‘Big Five’ consulting firms.
Winning a global ERP solution contract for the World Health Organisation (WHO) in over 140 countries is surely proof enough that Satyam means business.
“Satyam has a strong consulting vision and has been able to deliver on both technical and business process consulting requirements,” writes Stephanie Moore, vice president of IT services research group at Forrester Research, in her “The Forrester Wave: Indian Vendor Consulting Capabilities, Q4 2005” report, which champions Satyam’s ‘strong skills’ in the enterprise resource planning (ERP) and technical consulting space.
Tapping into the booming data back up, business intelligence (BI) and ERP markets, Satyam — only established in 1987 — is cranking up its presence in the Middle East, which is a critical component of its global strategy.
Indeed, the firm claims it has achieved a 75% growth in the region within the past year.
As Virender Aggarwal, director and vice president of Satyam Asia Pacific, Middle East, India & Africa points out below, with further drive towards regional investment clearly in place, 2006 promises to see even more Middle East gains for the company, which already counts Dubai Holding, Emirates Bank, Wataniya Telecom, and Qatar Telecom amongst its impressive 160-strong customer base.
For example, Satyam was recently selected by the Dubai Chamber of Commerce and Industry (DCCI) to implement an integrated front office solution based on Oracle applications and technology, a comprehensive project which includes upgrading the chamber’s existing back office system.
Satyam also recently announced plans to open further regional offices, while developing Dubai as its key regional base. IT Weekly talks to Aggarwal.
What do you think of the Middle East IT market?
Coming here is a real eye-opener for me. Normally, I just visit Dubai, but I’ve been to Qatar and Kuwait on this visit.
I am amazed at the speed at which things have been happening; in terms of physical infrastructure coming up and people’s sense of urgency, especially after meeting companies such as Qatar Airways.
The competition now arising in the telecom field is especially noticeable. We are very strong in this space and see a lot more opportunities there.
The second thing I notice for the region is that foreign banks are being allowed to expand more, so there is greater competition in that field.
The sense of urgency in various entities to do something else, and elevate themselves above the competition, is here.
Clients have money to spend, they want to improve their efficiency and compete in the market, and thirdly, the deregulation of the market is opening things up. I think the region is very bullish right now.
Do you have any telco customers? Why do these custo- mers choose Satyam over oth- er IT solutions companies?
We have a very large number of customers in the telecom market within the Middle East. These include Wataniya, in Kuwait and Algeria, Umniah in Jordan, Qtel in Qatar, and also Etisalat in the UAE.
Companies have a choice of going in for a small local company, or going for an Accenture or IBM, or a similar-sized big configurator.
If companies want similar quality as the Big Five, but don’t want to pay an arm and a leg, they have no choice but to be with somebody like us.
Fortunately for us in this part of the world not many of those companies are active.
Since we have a leadership in the enterprise business space, all the companies that are going for enterprise applications find us a natural choice.
We think we deliver value for money; we deliver similar value as the Big Five deliver, at a lower price band.
Do you think it helps that you lie close to the Middle East, yet you also have a global name? Do you think custom- ers in this region can trust you more?
It really helps, yes. We are noticing that whatever we deliver we know we are improving.
A lot of clients of ours, who have been tired with the Big Five, have been very happy after engaging us and seeing the solutions we offer.
The World Health Organisation deal, an implementation with 27million users in 140 countries, is a good example of this.
We have some of the biggest names now.
Given you are both from India, and offer similar services as each other, it is fair to say you are in competition with Wipro. How does Satyam differentiate itself?
Wipro is the competition, but they are a lot more active in Saudi Arabia. Outside of Saudi, they are not so active, but they are formidable competition.
We win some, we lose some, and we respect them for what they are. The way in which we do differentiate from them is that we as a company normally invest in the countries we operate in.
We have a very large office in DIC, we have set up an office in Saudi, we are setting up in Kuwait and Qatar.
We localise our operations also, by hiring Arabic people, even the sales team.
The Middle East market isn’t as open to off-shoring as other regions, according to Ajith Menon, Satyam’s Middle East regional director. Can you expand on this?
Off-shoring has not yet caught on here in the Middle East, and I don’t expect it to catch on. This is because the wage difference between the work being done in India and customer location is not so high.
It’s only where the wage difference is high, like in the UK or the US, that definitely benefits them to move off-shore.
The second thing here is also the volume. I don’t think there is any company big enough in the Middle East that would require several hundred people to work on a problem.
Dealing with the Merrill Lynchs’s and people like that, they deploy thousands of people on various problems using various vendors. I don’t see any such situation in this part of the world.
There is no entity big enough to demand those kinds of numbers. For example in this region, each country has its own bank which is dominant. You don’t have a single bank which spans across the Middle East.
Can you tell us about more your ERP and ITIL solutions?
We are doing some consultancy for Al Rajhi Bank [in Saudi Arabia], a huge contract that is based around ITIL.
We see more and more companies going in for this BS799 or ITIL consulting, especially as this is emerging as a legal requirement going forward.
Disaster recovery, planning and so on, is a very fast growing area and we have a very large practise in that area.
We are possibly the only company right now doing three or four such implementations of consulting on ITIL in the region.
Disaster recovery is increasingly being talked about at the moment. Is this important in the Middle East?
The demand is only from the banking sector at the moment. Their data centres need to be protected in case of failure.
But this is definitely a growing area. The insurance industry will eventually be required to implement this.
Apart from these sectors, I don’t expect anybody to spend money on this.
It costs a lot of money, and unless you need to be 24/7 and you can’t afford a breakdown, you will not spend that money.
Can you tell us more about Satyam’s recent contract
win for Abbar & Zainy Cold Stores in Saudi Arabia (see IT Weekly 26 November – 2 December 2005).
That’s a very large food processing company so it represents a tremendous amount of work and logistics, with an SAP implementation. It’s a full life-cycle implementation, a big project, and should take seven to eight months to finish.
Do you notice any other IT trends in the Middle East? And how can Satyam tap into these?
The effect of high petrol prices is visible here, in the sense of increasing confidence of the consumer to spend money.
There is also a big area of deregulation in the market, especially in Saudi Arabia and UAE with others following suit, so we think that the market is developing a lot of competition, both in services and production areas.
And there is an increasing awareness to look for alternatives to oil. Then countries are positioning themselves aggressively to be the next happening place.
So all this combines to our benefit; the more there is a need for being efficient, the more there is a need for being competitive.
Because we help companies become more competitive. They will need us when they want to achieve that goal.
You mentioned Wipro’s presence in Saudi. Do you hope to chip away at that?
It’s early days. Wipro has a commanding lead out there. But we have intentions to grow our own business there. I think Wipro’s done a fantastic job in Saudi, there is no doubt about it.
We have heard Satyam has bid for a deal worth US$50-100million. Is that in the Middle East?
No, that will be in Europe or the US. We see more big deals coming from those regions. The average price of a deal here is about US$250,000.
There are no very large conglomerates or corporations here; if you have a billion dollars you are considered big here, whereas in the US you are a nobody.
But this region is still very important to us. We are a global company, we have to be present everywhere, and this is a fast growing region.
For us not to be present here is not an option. Kuwait, Saudi Arabia, Dubai… customers don’t take no for an answer that
you don’t have an office in a particular area and you can’t serve them.
How would you compare the Middle East’s IT service market with the rest of the world?
Putting the US and Europe aside, the market is more
mature than some South East Asia countries, higher
than India, but nowhere near what we have in Australia,
The Middle East has a lot of catching up to do, and there’s a lot of investments that need to be made in technology.
They need to invest more in business intelligence (BI), to make sense out of the data they have.
Operational systems are also crucial: many banks don’t even offer internet banking out here, which is essential nowadays.
Whenever I have been travelling [by plane] in the region I haven’t seen any paperless tickets. That’s another sign I see that systems aren’t in place.
Even in India I can print a boarding card at home and I have been travelling with e-tickets in Australia for six years.
There are some signs that technology in the market is not where it should be.
It has been said that in the Middle East businesses use IT merely as a means to an end, rather than using
it to leverage their business upwards. Would you agree?
Since there is not a lot of public listings, and quarter-on-quarter pressure on companies to keep improving the bottom line, that’s another area I think you will see change.
If more companies become publicly listed and the more you are accountable to investors and the board of directors and corporate governance is strong, that will increase the pressure on companies to perform better —which means utilising IT a lot more efficiently and effectively.