Patni to double infrastructure mgmt revenues in 18 months

Patni Computer Systems plans to double revenues from its infrastructure management (IM) business unit over the next 18 months, while the unconfirmed stake sale buzz continues.

Of the company's total undisclosed deals in the first quarter of 2007, close to 20 per cent were for the IM segment. The global IM services market is estimated between $86 billion and $150 billion "� according to Gartner "� and more than 85 per cent of the infrastructure components can be managed from an offshore location, said IDC. The company recently appointed Sanjay Savla as the senior vice president and business unit head of its IMS business. Savla's priority is to double revenues in the next 18 months. "We have seen a huge traction from the customers and the deal sizes for which we are getting request for proposals (RFPs) are much larger than the traditional $2-4 million," said Savla. The company has RFPs of deals in the range of $2-6 million (around Rs 8-25 crore) on an annual basis.

Savla adds, "We are very clear about the market that we are looking at and the business format."

Patni will be looking at the mid-market segment as organisations are looking at companies who can provide niche expertise.

"If you look at the top 10 clients in the IMS category, 33 per cent are multi-source engagements." The company is also increasing its European focus. Of the RFPs the company has received in the first quarter of 2007, almost 30 per cent are from Europe.

The company has been in a transformation mode. It recently announced the formation of the consulting services practice within its manufacturing business unit. The practice will initially focus on the Global 2000 in the manufacturing, consumer packaged goods industries and private equity (PE) market segments, and will have Sanjiv Bhatia as the vice president.

"Our entry was based on our analysis of the market, which indicated that more and more customers were selecting partners who were able to combine unique leading-edge solutions, expertise and global delivery with a collaborative hands-on approach," Deepak Khosla, senior vice president, Patni, told Business Standard. These services will allow the company to leverage and enhance its primary business.

The company has not been to move with the top five IT majors despite being the first. Khosla defends the company's growth, saying "We saw strengthening in all our non-application development management (ADM) and emerging horizontals including our enterprise application services (EAS), IMS, and BPO practices in the first quarter of 2007. The non-ADM service lines now constitute 34.4 per cent of our overall revenues."

The other strength of the company is the product engineering services business. This business unit has seen a year-on-year growth of about 92.4 per cent. On an annualised basis, this vertical crossed the $100 million threshold this quarter. However, the company's main concern is the attrition rate at 29 per cent. "Yes, it is on the higher side but we have increased our utilisation as well. In the last two quarters, we have increased it to 72 per cent from 62.2 per cent. Similarly, our offshore revenues have grown from 37 per cent to 40 per cent," said Khosla.