Hexaware rides high on German clients

By siliconindia staff writer   |   Wednesday, 29 September 2004, 19:30 IST
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FRANKFURT: Hexaware Technologies, which cracked the tough German market four years ago, is now set for a fast-track growth in Germany with assured multi-million dollar repeat business from its clients — Citibank, Lufthansa Systems and Deutsche Leasing, reports Economic Times. Recently, Hexaware has bagged a three-year contract from Lufthansa Systems for providing maintenance services to its check-in, inventory and ticketing applications. The deal would require deployment of 80-100 professionals with an offshore-onsite ratio of 90:10. Since 2002, Hexaware has been working with Lufthansa Systems providing services in areas like cargo applications and CRM. The company’s first customer in Germany - Citibank has again shortlisted the Indian tier-II IT services provider for a $100 million project to enhance its back-end system. This is likely to be a three-year contract for Hexaware with a revenue potential of close to $15 million. The project is expected to be finalised in early 2005 by Citibank. Thanks to a reference from Citibank, two years ago Hexaware clinched a deal with Deutsche Leasing to provide MIS maintanance services. Now this account is also growing from the present e25 million to e40 million by next year. With this, Hexaware has become probably the fastest growing Indian IT services provider in Germany, a market which is less penetrated by the Indian IT sector. With a gradually improving economy after a shake-out, Germany continues to be the second largest IT spender after UK in the $165 billion European market. “Capex is still constrained here; but the tactical spending is growing. Germany is a different and difficult market compared to USA thanks to characteristics like longer sales cycles, multiple reference checks, sophisticated and demanding buyers,” said Mr Sunil Surya, president-Europe, Hexware while addressing the visiting reporters from India. Continious and patience efforts seem to have paid off for Hexaware in Germany. Thanks to the low penetration of Indian IT vendors (less than 1% in Germany which does an IT spending Euro 26.5 billion as of 2004), Hexaware claims to have a premium positioning in terms of pricing compared to the US market. The company’s delivery centre at Bad Homburg, Germany, has a total of 70 professionals, with a support of about 250 people offshore at Chennai. This centre is expected to grow substantially based on the recent order and those are in the pipeline. In the last 12 months, the company has generated about $ 24 million revenue from Europe, with about $ 16 million out of Germany. For Hexaware, the over all performance in Europe has been good with 11 new customer acquisitions in the last few quarters. Apart from UK, the company has also made inroads in countries like Belgium and France. It has about 20 customers now in Europe including 10 Fortune 500 companies. The clientele includes AVIS, Royal & Sun Alliance, BMW, AXA, Fortis AG, Grattan, Atos KPMG, Dixons, Virgin Air, Peoplesoft, Economist.com, DNV, Winterthur, Schneider, SQS and ACE. Having reported a total revenue of $73 million in 2003, Hexaware hopes to grow its topline to $ 114 million in 2004. It has proposed to expand its operations in Mumbai and Chennai. The company, which has about 3500 people, has acquired a 20-acre land at Siruseri IT Park in Chennai to set up a campus facility.

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