Mumbai: As the big companies are chasing the lucrative domestic market, the mid tier technology firms like Patni Computer Systems and Hexaware are attempting to enter the market by jointly bidding with experienced bidders, reports The Economic Times.
The Indian government departments and other state owned firms will spend around $2 billion on IT during the next 12 months. Hexaware, MindTree and Patni are among the many mid-tier technology firms seeking to explore new business with an experienced partner.
For instance, Hexaware is pursuing some large deals as part of a consortium and several smaller ones on its own. Its strategy for the Indian market will be different from its strategy for overseas markets, said Hexaware's Vice Chairman and CEO, PR Chandrasekar.
"If we treat India as just another location for our services, it will not work. It will need fairly dedicated focus and some innovation on how we source talent and price our offerings. You also need to leverage your niche capabilities, especially if you are not one of the big players," said Chandrasekar, who was earlier with Wipro.
For putting better focus on the Indian market, companies such as Hexaware and Patni have recently formed focused business units. As Narendra Upasani heads Hexaware's India business, Deepak Khosla is responsible for growing Patni's revenues from the country.
Hexaware will work as part of a consortium because the large contracts in the government and public sector projects usually require the bidder to have a track record in executing similar projects.
Guru Malladi, a Partner at Ernst & Young said it will be challenging for mid tier technology firms to take on bigger rivals. "A Rs. 5,000 crore project, for example, can never be delivered by a single player. But I do see an element of challenge for mid-size players who have so far not operated in the domestic market. Large players have to sometimes rely on small players but they may not see value in mid-size players in terms of cost or efficiency arbitrage," said Malladi.
"Globally, this kind of scale is not available anywhere, even if it may not be the largest in revenues," said Jeya Kumar, CEO, Patni Computer.
Like Hexaware, Patni is also chasing contracts in the domestic market as part of a consortium. "With the kind of large deal sizes we are seeing, you have to have a multi-vendor strategy," added Kumar. Apart from the government, Hexaware will focus on sectors like travel and transport, insurance, hospitality and logistics, and technology offerings across sectors.
According to Malladi, the mid size players have to be more strategic in their outlook using their skills to enter the market. Hexaware, along with others like Patni and MindTree are turning towards India, drawn by the large opportunity and significant growth potential.
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