Oracle to buy PeopleSoft centers in Bangalore
By agencies   |   Wednesday, 04 May 2005, 19:30 IST
Printer Print Email Email
BANGALORE: U.S. software major Oracle has acquired two development centers run by independent vendors, Hexaware and Covansys, under a build-operate-transfer (BOT) clause. Both centers are based in Bangalore. A build-operate-transfer clause is almost mandatory in most large outsourcing deals. But there have been few instances where a customer as large as Oracle has exercised the option. Oracle already has more than 7,000 people at its two development centers in Bangalore and Hyderabad. Its employee base in India is expected to be over 8,000 with the acquisition. Mumbai-based software services company Hexaware’s PeopleSoft center was built a couple of years ago. Michigan-headquartered Covansys also has a similar center built several years ago for JD Edwards, a company acquired by PeopleSoft, and now a part of Oracle. Hexaware officials say that the transfer will be effective from the end of October ‘05. The company’s fiscal year ends on December 31, ‘05, and it has reiterated and maintained its topline guidance of $170 million and net profit of $25.2 million for ‘05. Hexaware officials say that contribution from the PeopleSoft center will be made up by growth from other customers during the coming year. It is estimated that the center contributes 10-12 percent of Hexaware’s revenues. Hexaware will continue to operate two other PeopleSoft centers — in Mumbai and Chennai. Hexaware has around 750 people in consulting and implementation on the PeopleSoft platform. It says its relationship with Oracle, as the services partner will continue to grow for both its direct PeopleSoft and Oracle services practice. This transfer does not affect in any way the current size and projected growth of Hexaware’s core PeopleSoft services practice, which is acquiring new clients and growing existing relationships, the company said. Hexaware also has an active SAP implementation and support practice. It has the largest number of PeopleSoft certified consultants in India. Integration of operations of Oracle and PeopleSoft in India will be completed by June-end this year. “Full integration of operations of Oracle and PeopleSoft will be done by June-end,” Derek Williams, Oracle's executive vice-president for Asia-Pacific had said. Oracle’s move to exercise the option to acquire product-engineering teams from its vendors in India is seen as a consolidation by the industry. Several other tech majors like Cisco, Microsoft and others continue to operate product-engineering centers with Indian vendors.

siliconindia