Satyam to strengthen European operations

By Our Staff Reporter

HYDERABAD, AUG. 16. Satyam Computer Services is launching a new initiative `Mission Europe 2001', on September 1, to give greater focus to the European market and increase its contribution to Satyam's March 2002 turnover to 15 per cent against last year's share of 7.3 per cent.

Last year, the share of U.S. was 76.5 per cent, Japan 3.6 per cent and the rest of the world 12.6 per cent, besides 7.3 per cent of Europe. Earlier this month, Satyam announced that it was closing down four subsidiaries, three of them being sales and marketing outfits - Satyam Europe, Satyam Asia Pacific and Satyam Japan.

The company felt that having acquired global visibility in the recent past, particularly after the NYSE listing, and given the customer preferences in Europe to deal directly with Satyam rather than its subsidiaries, the objectives of the subsidiaries could be achieved utilising a `branch' system instead of subsidiaries. The fourth subsidiary was Dr. Millennium.

Participating in a tele-conference with select presspersons in Hyderabad, Mr. Anil Kekre, Managing Director of Satyam Europe, and also Executive Vice-President of Satyam Computer, said from Pune on Thursday, that the company had `high expectations' from European operations which would help it move up the value chain.

It has already bagged several big projects from MNCs like Unilever, Reuters, J. P. Morgan Chase, and Pfizer, against competition from the `big five' (global). Satyam also plans to open branches in Germany, Benelux (Belgium Netherlands and Luxembourg), and France. ``If we move closer to customers, it would benefit them and the company'', he felt. It has already met with success in new territories like France (with Totalfena ELF).

The new initiative and focus on Europe was part of a larger corporate plan and not a reaction to the U.S. slowdown. Earlier, subsidiaries were making losses because they bore the sales and marketing expenditure, but customers usually preferred ``umbrella contracts'' with Satyam.

If the `total picture' (including value of contracts from Europe to Satyam) were taken into consideration European operations were profitable even last year, he asserted.

The closure of subsidiaries was only an `accounting decision' and Satyam will continue to have sales and marketing wing in Europe as also its existing development centre (in Basingstoke near London) which is into cutting edge technology areas such as enterprise application integration. It was helpful in perfecting the programme management, 24/7 approach and practices, and led to growth of existing accounts. Satyam has 600 people in Europe.

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