Symphony to acquire an Indian firm

By siliconindia   |   Monday, 11 October 2004, 19:30 IST
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BANGALORE: Close on the heels of its acquisition of Dallas-based Stonehouse Technologies, Inc, Symphony Services, a Bangalore-based Independent Software Vendor (ISV) is all set to acquire an Indian company soon. The company would be spending more than $30 million on acquisitions this year. “We are looking at more inorganic growth. We would be acquiring an India-based company soon to have more than one locations in the country. We are also planning an acquisition in China soon. This is mainly because a client wants to go there and we believe that there is a market there, so we have decided to set up operations through an acquisition,” President of Symphony Services, Ajay Kela said. The company is also planning to increase its headcount in the country and is hiring around 150 employees everyday. Symphony’s growth is a reflection of the high growth in the software product reengineering work. In fact, it won’t be wrong to say that outsourcing of product reengineering work can easily be the next sunshine segment of the information technology sector. “The Indian companies have done a great job in establishing that software work can be outsourced. This was started by SAP and Oracle in the mid 90s, when they established their development centers in India. Today, Oracle has about 6000 people here. They established that high-end work can be outsourced,” Kela said. The market for this kind of work is huge and India is all set to capture a big share of this pie. Symphony recently conducted a survey to ascertain the gains of both captives and ISVs. According to the survey, captives experience slower ramp-up as the first two years are spent on operational issues like recruiting, ever-changing facility needs, IT infrastructure, government and regulations. “It effectively doesn’t make sense to set up an operation unless they (captives) have 400 people and on a scale of being efficient and start comparing with providers, they need to have at least 1000 people. This is mainly because Captives have to spend tremendous amount in all the support functions, so they end up paying for much larger and endless cycle,” Kela explained. Commenting on the market trends, Kela said, “There has been a realization in the US and we no longer have to sell outsourcing and the companies are coming in droves. The other important perspective is that IP of a product is in understanding the needs of a market and defining as to what the product needs to be. If a company is clear about that, then the work can be easily outsourced. It was hard to accept initially, but is beginning to be accepted now.”

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