Patni aims to double revenues from Europe

Mumbai-based IT services provider Patni Computer Systems plans to double its revenue contribution from the European markets over the next two years. Europe currently accounts for around 15 per cent of its total revenues.

While acquisitions will be on the cards, the company also plans to set up near-shore delivery capability that will cater to its European customers.

It is actively looking at low-cost destinations in south-eastern Europe. The company also plans to provide domain-specific or platform-based solutions to provide value addition to customers.

Brian Stones, executive VP (Europe), Patni, says: "Europe is no longer a branch office, but now provides a huge opportunity. We would also look at alliances and tie-ups to provide domain-specific solutions."

The European IT services market is expected to grow at a compound annual growth rate (CAGR) of 5.8 per cent from $217 billion in 2006 to $287 billion in 2010, says an Avendus Advisory report.

The market for offshore IT services is expected to grow at a CAGR of 60 per cent through 2009, presenting a huge opportunity to Indian IT services companies.

Lately, Patni has also stepped up its acquisition strategy in the region. The company acquired Logan-Orviss, a Europe-based independent specialist telecommunications consulting services company.

It also acquired intellectual property (IP) from UK-based The Carphone Warehouse "� an independent retailer of mobile phones and services with over 2,000 stores in 10 countries.

"While we are looking for acquisitions, they will primarily be for creating impact in the market rather than for scaling up in terms of headcount. And they will be done for specific needs of the company.

Besides, I think we need to increase our deal size," said Stones, adding that while the average size will be upwards of $10 million, the company will work cautiously when entering into deals above $50 million. It currently has 83 clients that fall in the $1 million category.

"We will be focusing on getting deals such as The Carphone Warehouse. This will allow us to be a partner with the customer and work together. We are in talks with a few services customers, who have certain components and are working on certain aspects. We want to take this combined solution to the market as well," explains Stones.