'We would like to be a one-stop shop'

In Conversation: B Ramalinga Raju

Satyam Computer Services wants to scale up in emerging areas like retail, healthcare, travel and transportation, says B Ramalinga Raju, founder and chairman of Satyam, in an interview. Here are the excerpts:

Which markets hold the greatest potential for you?

We see a demand from the Europe and the Asia-Pacific markets. South America is also an emerging marketplace. We have contained our dependence on the North America market for revenues "� from 85 per cent to less than 65 per cent. The proportion of revenues from Canada too has grown by four to five per cent.

In Q4 2006, the number of customers with annualised billing exceeding $10 million increased to 27 from 21 in Q4 2005. Is the company gunning for more of such large deals?

One of the major soft assets that Satyam has is strong relationships with global companies. We work for 155 Fortune 500 companies and in several cases our relationships with them span over many years. We have to capitalise on these assets. Opportunities of a much larger size exist today and we are focusing on increasing the average size of the engagement.

Is the company shifting focus to consulting from software development and maintenance?

We have built strength in enterprise business solutions and consulting in tune with customer demands. This has, however, not been at the cost of our competency in software development and maintenance. We would like to operate as a one-stop shop, so that customers can get all kinds of IT services from us.

How important is organic growth as opposed to mergers and acquisitions (M&A) for Satyam?

Organic growth is an important part of our strategy. However, our M&A team too is very active and we will continue to focus on that area too.

Is it becoming difficult to find the right-fit senior management recruits from within India?

We are a global company. We need to evaluate the skill-sets that best suit the global markets. For this we need to take advantage of competencies, wherever they exist. While Indian professionals have specific strengths, they cannot meet the requirements in all cases. It is important to place the best configuration in front of the customer. This right sourcing model has served us well.

Less than three per cent of your company's revenues come from India. Your comment.

Indian IT companies will continue to focus on the export markets. However, opportunities in the domestic market are also growing. We are significantly enhancing our presence in this space.

Why is Satyam way behind the top three Indian IT companies in terms of revenue?

Each company has its own strengths and weaknesses. We believe if we do a good job, the performance of the company will not only be sustainable but also evolve into a leadership position.

How do you intend to use your huge cash reserves?

A fair amount of cash reserves will be used for inorganic growth. We are constantly looking at what would be the best interest of shareholders.

2005-06 saw Satyam crossing the billion dollar mark. Reaching the $2 billion mark may not be difficult for you in FY08.

We have not given any guidance beyond this year. So we do not want to make any further statements. Suffice to say that we are confident of achieving what we have committed so far.