I had a chance to catch up with Armando Viteri, CEO of neubloc (one of the sponsors of
the New Florence blog). Neubloc provides outsourced R&D and IP development
services to tech vendors.
Business grew 150% last year. Not shabby - helped by the fact they expanded
from Poland to Latin America with centers in Argentina and Ecuador.
And one in Oklahoma City.
3 years ago, jetlagged in Bangalore, a CIO asked me why I could not find him
reasonably priced, "rural
sourcing" vendors in the US. Now I have a vendor he could consider. With a
growing footprint in other global villages.
EPAM, one of the largest outsourcers in Eastern Europe, was poised to go public a few months ago. Instead, they have raised $ 50 million in private equity. I have enjoyed their hospitality in Budapest a few times (though one of the attractive things about the firm is their staff is diversified across Belarus, Ukraine and Russia.)
In other news, Steve Ballmer enjoyed a different kind of Hungarian hospitality. Zoli, an alum of Corvinus U where the incident occurred, naturally has coverage.
A reader shared with me this Forrester analysis of 16 firms with large SAP practices.
Not many major surprises in the choice of vendors they evaluated ((In SAP services evaluations I have been involved with over the last few years, I have seen proposals from all the firms in the survey other than Neoris) , though I would have included EDS and an East European player like EPAM. I would also have evaluated SAP's own (and fragmented) consulting resources since they play a role in just about every project. But, not surprised to see Accenture and IBM lead globally, and Satyam and Wipro from the Indian firms.
Four things I would have weighted more heavily in my ratings:
a) More of a focus on support and maintenance, and by extension BPO. This is a mature market and most deals I see now are post-implementation, SLA based deals which have an upgrade or implementation project component. From that lifecycle perspective firms like TCS, and the specialist Intelligroup would do stronger.
b) More of a focus on verticals. The survey focus is much more on functional components - ERP, HCM etc, whereas most implementations I see have a significant vertical emphasis, and often implementation of SAP's unique industry extensions. From that perspective, Infosys and Cognizant would do better in selected verticals.
c) Focus on upgrades. The hottest "project" in the SAP ecosystem in moving customers to ERP 6.0. It has been a slow slog for SAP to convince its customer base to move, and many are doing lateral upgrades taking minimal advantage of the services oriented features SAP offers in the version. But if that is what the market wants, SAP and its partners should be offering lots more vanilla upgrades at fixed price offerings. Many of the firms in the survey turn their noses on such small projects, but is the most immediate need in the customer base.
d) Lot more overall emphasis on economics. The 16 firms claim to have 80,000 SAP consultants and have done over 4,000 projects in just the last year (and in my estimation over 50,000 projects in the last decade). Most also have significant offshore capabilities.
This is one mature market and yet SAP and its partners still want to attach a "premium" label to these services as I wrote in The SAP Egosystem. With the report aimed at "Sourcing and Vendor Management professionals", I feel Forrester should be debunking that myth and probing rate cards, inflation rates, implementation productivity (shocking how little productivity firms are willing to share even while bragging of thousands of SAP projects in their bag) and continuous improvement on multi-year deals a lot more.
Satyam, the large Indian vendor, is going to sponsor FIFA. Smart move as IBM, Accenture, others have found in past: Enterprise buyers are also sports fans.
"Rama Raju, co-founder and chief executive, says the World Cup gets a
better audience than the Olympics and could be particularly powerful in
building awareness in Europe, which accounts for around 23 per cent of
So, Prabhat who wrote a guest column on his "second generation" outsourcing firm, sends me a note that Nasscom has recognized his firm, Anantara, as one of its most innovative. And I go - good for them. I hope some of the elusive Indian software (not services) firms also show up on the Nasscom list.
The list is 100 long and every major Indian outsourcer is on the list. And a vendor like AdventNet which makes the Zoho set of SaaS tools does not deserve to be?
Sounds like promotion day at the bank. 80% of employees are now Vice-Presidents, er Innovators...
I was reading Brown-Wilson's list of 50 Leading Outsourcing vendors and it hit me how much choice buyers do have when it comes to IT and BP Outsourcing. A quick tally of outsourcing transactions I have been involved in the last 3 years showed my clients had in their "long lists" 26 of the vendors in the Brown-Wilson list, and probably another 50 which do not show there.
If you are a CIO looking for IT infrastructure services, if you are a CFO looking for F&A BPO services, if you are a ISV CTO looking for product engineering services in India, or in E. Europe - each vertical, geography, service line has so many large and boutique providers.
Of course, you can have analysis paralysis. I presented to one client a long list and analysis on 30 vendors and someone in the audience asked "who else should we looking at?"
I cannot wait for similar market fragmentation as we move to SaaS in the software market and disruptive players in telecoms and hardware services in the cloud. As I wrote - often players from out of left field.
Ingres to partner with Satyam...read Tom Berquist (Ingres's CFO)'s perspective. Satyam has one of the stronger package implementation practices in the Indian firms, so not sure how this custom development oriented alliance will play out. Besides, Indian firms are learning how to become channel leaders rather than followers, so not sure how much this will help Ingres short term.
But Tom is right to point out it is two industry trends converging. Now that is John Naisbitt and Patricia Aburdene would likely call a "mega trend mash-up"
This time of the year you cannot but think of farm systems and transitions. You watch the best in college football..and then you see the best of college players from the year before play as rookies at the gamespeed of the NFL playoffs.
So, I see this presentation Stephanie Moore of Forrester has on her recent trip to India. And I admire how the Indian firms have learned to schmooze analysts like her, like the Accentures and IBMs did when I was analyzing them 10 years ago at Gartner.
I am fortunate to get sideline passes and I get to see the Indian vendors at gamespeed - in live deals at clients where they compete against the Accentures and the IBMs. When I go to Bangalore or Chennai, it is not to get schmoozed. I get to see that while they are good, they just do not have the references, the investments, the polish - the "pros" do. You get to see their warts - their proposed staff resumes have little to do with all the training investments they brag about. They suffer the same "injuries" - staff turnover, wage inflation - the "pros" suffer through also. And you get to see unheralded players - often drafted late do better than those picked in the first round. Lots of specialist firms do just fine even as the TCSes and the Infosyses get all the press.
In the meantime, high school teams continue to be farms for colleges. The Filipinos and Hungarians and Brazilians are following after the Indians. Keeps improving the game. It is a great time to be a buyer of tech talent - and to sit back and watch the bowls and the playoffs.
Cap Gemini pays $ 1.25 billion to acquire Kanbay and in the process picks up 5.000 employees in India and $ 300 m a year in revenues in financial services clients. It follows on the heels of EDS acquiring a majority stake in MphasiS. Cap and EDS are trying to keep up with IBM's and Accenture's global talent pools, but they are also protecting their own customer bases from the larger Indian firms like TCS and Infosys. It will increase pressure on the Indian vendors to acquire mid-sized western firms and expand customer bases of their own. To date, they have shied away from using their large market caps for acquisitions, preferring instead to grow organically.