Satyam clients cross fingers, keep eyes open

CHENNAI | HYDERABAD | NEW DELHI: Satyam���s customers seem to be cautiously optimistic after Tech Mahindra placed the highest bid for Satyam on Monday.

The Hyderabad-based firm has been facing a tough time retaining and winning clients ever since its founder, B Ramalinga Raju, confessed to falsifying accounts in January this year. There have been reports of clients ending contracts with Satyam, concerned about its stability and corporate governance. So, the Tech Mahindra bid is crucial for Satyam to restore confidence among its customers.

���We have not seen any disruption in services even after the scam broke. Mahindra is a diversified conglomerate and we hope that they will be able to steer Satyam out of uncertainty,��� said an official at one of Satyam���s Australian customers. He requested anonymity.

Another person, an outsourcing expert familiar with Satyam���s outsourcing decisions, said many customers want to rework contracts as a new owner takes control of Satyam.

���Clients would be happy to see a closure to the Satyam scandal but they would still want to know about the continuity of services provided to them. Tech Mahindra will have to communicate to Satyam clients to provide them comfort. It has British Telecom���s (BT) backing and a strong presence in the US but Tech Mahindra is not that well known in markets such as Australia, where it will have to market itself,��� said Jens Butler, principal analyst-IT services, software and sourcing, Asia Pacific, at sourcing advisory firm Ovum.

Satyam has Australian firms such as National Australia Bank (NAB), Qantas and ANZ Bank as its clients. NAB had put its contract with Satyam on hold after the scam came to light.

Some experts say while the deal will be a good expansion strategy for Tech Mahindra, which derives a major portion of its revenues from telecom, Satyam���s clients in areas such as manufacturing, auto and engineering services will be concerned. ���The next 60-90 days will be crucial to demonstrate a plan for existing Satyam customers. Satyam provides niche work in areas such as auto and engineering services, so clients will be concerned about the long-term plan in that space,��� said Sudin Apte, a senior analyst with Forrester Research.

���There may be a conflict of interest among Satyam���s auto clients, considering that the company will now be owned by an auto major, M&M. The same will apply to telecom clients, as BT has a stake in Tech Mahindra and is one of its biggest clients. So, clients will do their own cross-questioning and due diligence on the deal,��� said Diptarup Chakraborti, Gartner India���s principal research analyst.