Satyam scam: Infosys, IBM, Accenture to benefit most.
Infosys Technologies is expected to gain the most among the top Indian IT players from Satyam’s loss of credibility. Although there will be no shift towards one single provider, Infosys’ reputation as a firm with high corporate governance standards as well as its US listing is expected to stand it in good stead when customers make a choice, said analysts.
"The senior management of Infosys has come out quite aggressively in the media on maintaining high corporate governance standards," pointed out Ascendia Consulting principal analyst Alok Shende. However, the hitch to this could be Infosys’ premium pricing, which some analysts said was 10-15% higher than Satyam’s rates. This, along with a substantial customer overlap, could work in the favour of the number one IT exporter, TCS.
"It is not going to be as easy as that to say any one vendor will benefit. TCS probably has the largest overlap of clients. General Electric (GE), General Motors and Citigroup are all clients of TCS as well as Satyam. Citigroup is also a client of Infosys but it is small," said an analyst with a foreign brokerage. Infosys had stopped servicing GE because it was unwilling to compromise on its billing rates and provide services at the discounts GE was looking for. This one of the reasons why GE had moved more work to Satyam, recollected an analyst.
IBM and Accenture, which have a significant offshore presence, will be the biggest gainers, said some analysts. IBM has around 75,000 employees in India and Accenture, around 35,000. "Best positioned to benefit from such a situation, we believe, are the large, global, well-known MNCs like ACN (Accenture) and IBM. We consider them of tier-1 calibre in terms of offshore capabilities, but their size, stature, brand, global reputation, and high-level client relationships (particularly ACN) differentiate them, in our view, and will make them more attractive to worried clients than even the tier-1 offshore firms like INFY and WIT (Wipro)," said an analyst at Stifel Nicolaus.
"The senior management of Infosys has come out quite aggressively in the media on maintaining high corporate governance standards," pointed out Ascendia Consulting principal analyst Alok Shende. However, the hitch to this could be Infosys’ premium pricing, which some analysts said was 10-15% higher than Satyam’s rates. This, along with a substantial customer overlap, could work in the favour of the number one IT exporter, TCS.
"It is not going to be as easy as that to say any one vendor will benefit. TCS probably has the largest overlap of clients. General Electric (GE), General Motors and Citigroup are all clients of TCS as well as Satyam. Citigroup is also a client of Infosys but it is small," said an analyst with a foreign brokerage. Infosys had stopped servicing GE because it was unwilling to compromise on its billing rates and provide services at the discounts GE was looking for. This one of the reasons why GE had moved more work to Satyam, recollected an analyst.
IBM and Accenture, which have a significant offshore presence, will be the biggest gainers, said some analysts. IBM has around 75,000 employees in India and Accenture, around 35,000. "Best positioned to benefit from such a situation, we believe, are the large, global, well-known MNCs like ACN (Accenture) and IBM. We consider them of tier-1 calibre in terms of offshore capabilities, but their size, stature, brand, global reputation, and high-level client relationships (particularly ACN) differentiate them, in our view, and will make them more attractive to worried clients than even the tier-1 offshore firms like INFY and WIT (Wipro)," said an analyst at Stifel Nicolaus.
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