Comments on: Is Offshore Services a Scale Business

By: Alok

Alok — Fri, 04 Jun 2010 07:34:02 +0000

Basab, acquisitions should be done only to scale your current capabilities but to add new ones too. IT organization need to learn more complex businesses and talk their language in working on large and complex deals. Acquiring companies in domain expertise would add capability and credibility to their kitty and help them grow businesses faster.

By: Ram Medury

Ram Medury — Fri, 19 Feb 2010 18:27:45 +0000

The only reason to buy, would be to touch that holy grail of non-linear revenue stream. Strong IP bought along with clients can then be scaled by revving up the delivery engine. An interesting proposition and I am right in the middle of such a thing!

By: Madhu

Madhu — Tue, 16 Feb 2010 02:43:35 +0000

In the services business, scale = strength. Beautifully explained, thanks for the great article !

By: Vikram

Vikram — Sat, 13 Feb 2010 04:25:51 +0000

These large IT companies will go anywhere to sustain their branding. Like winning “The Best Employer” when almost every employee in the organization is wondering “how the heck?”

By: Anon

Anon — Fri, 12 Feb 2010 18:18:40 +0000

With great size, comes great angst…check out the anti infy tirade by seeming insiders on economictimes website! ("promotions strictly for performers"). This, for an award winning company with a culture to die for! What would be the state of employee engagement in companies that aren't as respected?

Why would companies invite more employee ire by acquiring companies and merging the two operations? Acquisitions in this industry are certainly not for the faint hearted.

By: Gaurav Rastogi

Gaurav Rastogi — Fri, 12 Feb 2010 18:11:22 +0000

Basab, the relationships with individual client buyer (and the overall brand with the client) go hand in hand. IT Services is a B2B business, and in this business relationships and record matter a lot. Almost all companies in this business will get a majority of their revenues from a small fraction of their overall client base. The more business you do with a client, the more you're likely to get new business with them (provided the business isn't screwing up on delivery). Why buy then?

I guess it would make sense to buy around relationships- either buying companies that have similar brand/positioning but complementary clients, or buying companies that help deepen a specific client relationship.

One could propose buying for the employee base or, good Lord!, even intellectual property. IT services businesses are largely about the headcount (people x time x rate = revenues), and there frankly isn't much new intellectual property going around to pay revenue multiples for. Buying for employees would make sense only if the client base is complementary. Otherwise, the acquirer could be spending years trying to unravel the bad relationships from an acquisitions.

By: rajiv gupta

rajiv gupta — Fri, 12 Feb 2010 13:51:01 +0000

Centuries ago India gave ZERO to the western world , and since histroy repeats itself its again time we give ZERO again to the western world .

In my prediction Indian companies can literally acquire any company in the world in next 4-5 years and make them Zero – Atleast the inflated egos will be reduced to zero )