India's fourth-largest IT company, Satyam Computer Services, has bold plans for its small South African operation.
The global player plans to grow revenue 75% year-on-year and take turnover from $3.75 million (R26 million) to about $100 million (R700 million) in about 48 months.
The company is recruiting South African university and technical university IT graduates to fill posts.
A first batch of 12 has already undergone a year-long in-house training course at a Satyam learning facility in Hyderabad, India, and is deployed on company projects in SA.
A second batch of 30 is about to return to SA, while a third batch of 100 trainees will arrive in Hyderabad in September.
Company founder and chairman Ramalinga Raju expects growth both organically and through acquisitions. "I'm not ruling out any possibilities. As a company, we are keen to identify gaps in technology, geography or domain competency that enhances opportunity.
"SA has great talent and we have already benefited in tapping the same," Raju says. "We expect significant growth in this marketplace and we see for ourselves a major opportunity there."
BEE compliance
Asked about the company's black economic empowerment (BEE) plans for SA, where the company has been active for two years, Raju says an equity sale is not on the cards. "One of our most important criteria is to abide by local law, both in letter and in spirit."
The company runs as a single legal entity and its South African operation is treated, like all other offshore businesses, as a branch office and branch offices do not conclude equity deals.
"We have a constraint. Our investors look at the operations of the company very closely and want it captured in one company so it is easier for them to appreciate its performance. It is a trend throughout the world. Creating many legal entities (with different shareholdings) is not our strategy," insists Raju.
Country manager Chittaranjan Jena says the company does well on the other six major BEE criteria. He does not see equity as being an impediment to accessing SA's $30 billion (R210 billion) IT market, which he estimates is 30% services and in which 40% of the spend comes from government.
Satyam is already active in banking, financial services, and the energy and utility sector and has a number of government contracts, says Virender Satyam, director and senior VP for Africa.
"With SA constituting more than 60% of the IT market in Africa, and a 2% annual growth in its IT spend, the country offers tremendous business opportunity," he adds. "The company is banking on a sizeable number of contracts emanating from SA in coming years."
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