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chinadotcom-vMoksha JV to pep up outsourcing capability
By siliconindia
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Thursday, 08 May 2003, 19:30 IST
HONG KONG: CDC Outsourcing, an outsourcing unit of chinadotcom corporation, a leading integrated enterprise solutions company in Asia, on Wednesday announced it has reached agreement to set up a joint venture with Pawan Kumar founded vMoksha Technologies, a rapidly growing offshore IT outsourcing company headquartered in Bangalore, India, to further strengthen chinadotcom's software outsourcing capabilities in Asia and broaden chinadotcom's IT outsourcing service offering to global clients.
chinadotcom will hold a 51% interest in the JV with vMoksha owning 49%. The JV aims to provide a broad range of outsourcing related services to major software vendors and enterprises in the United States, Europe and Asia-Pacific region. It will have sales and marketing offices in the United States, the United Kingdom and Australia while its offshore development will be focused on India and China. vMoksha has proven capability in offshore outsourcing services, made up of product engineering, product migration, package implementation, remote maintenance and support. The service offerings to be provided through the JV plan are designed to offer potential clients an unbeatable value proposition of competitive pricing, domain expertise, depth of package knowledge combined with proven delivery capability along with high quality management.
By partnering with an India-based outsourcing company, the JV will complement chinadotcom's existing outsourcing capability in Shanghai. Once in effect, customers will have additional options that may better fit their requirements, whether it is a specific skill, experience, language or location. The JV will necessarily foster a close working relationship between vMoksha and chinadotcom, where projects will be jointly bid and executed, staff will be cross-trained, and methodologies will be shared. The JV is expected to expand chinadotcom's outsourcing capability and capacity and lay a solid foundation for the company to serve its existing clients in Australia, the U.S. and the U.K. as well as future global clients. The JV will also enable vMoksha and its partners in the US and elsewhere to make an entry into China with their products and services.
vMoksha, founded in May 2001 and based in Bangalore, India has over 450 IT professionals, including 80 in the U.S. and the U.K. Its management team has over 500 'person years' of experience in the IT industry and has established long-term client relationships with large global clients such as Nextance, PeopleSoft, Wincor Nixdorf, BOC Edwards and other leading enterprise software companies around the world. It currently runs its offshore development centers in Bangalore and Pune, India, and in Singapore. vMoksha's proven skills and experience in managing large projects and use of CMU/SEI-CMMISM (Carnegie Mellon University/Software Engineering Institute - Capability Maturity Model Integrated) compliant processes is expected to help chinadotcom to improve the software development process of its software development center in China through the JV.
"We are pleased to announce this JV which complements our existing offshore software development center in China," said Herman Cheng, Managing Director of CDC Outsourcing. "This JV is designed to provide a solid outsourcing platform in the future for our existing and new global clients who can fully utilize our expanded offshore outsourcing capability. Our clients will continue to be able to work with the local offices while having increased confidence that their projects will be completed with higher quality, lower cost, and greater transparency, such as in the case of the Department of Trade and Industry in the U.K."
India-based outsourcing companies are viewed by customers in the U.S. as the leading providers of offshore outsourcing, given the multiple advantages that they offer which include amongst others a large talent pool of qualified software engineers with high proficiency in English and other specialized skills, strong focus on quality delivery demonstrated by the large number of SEI-CMM certifications, good infrastructure and telecommunications for software development, laws that protect customer intellectual property rights and favorable central and local government policies that encourage IT services. All these factors enable India-based companies to provide high quality leading-edge IT outsourcing services at low cost. NASSCOM (The National Association of Software and Services Companies of India) estimates the IT software and services export market will reach US$60 billion by 2008, representing one of the fastest growing markets in India.
Pawan Kumar, Chairman of vMoksha Technologies said, "We are delighted to enter into this strategic partnership which is an important landmark for vMoksha as part of its rapid growth strategy. Along with chinadotcom's commitment to software development and IT outsourcing, and vMoksha's long term relationships with global ISV's and end-user customers delivering world class software products and services, we have together leveraged the potentially competitive positioning between China and India to a cooperative strategy through the JV that brings a unique price-quality value proposition to our customers. The JV will also be complementary to both companies' existing outsourcing competencies and it should prove to be a win-win situation for both of us."
Daniel Widdicombe, Chief Financial Officer of chinadotcom corporation, said, "CDC Outsourcing is a newly established separate unit under chinadotcom set up to manage the overall IT outsourcing initiatives within the group. The IT outsourcing business is still in its early stages in terms of the potential financial impact to the company. As part of our software strategy, however, we believe the establishment of CDC Outsourcing will facilitate our stated strategy of securing long term, multiple-year contracts with recurrent and predictable revenue streams. We expect to see a growing proportion of group revenues coming from software related businesses in the long run".
chinadotcom notes that the consummation of the JV is subject to closing conditions within the definitive agreement and there is no assurance that the JV will be consummated. Further details of the JV will be released shortly.