As India's No. 4 information technology (IT) services company, Satyam Computer Services
In its fiscal third quarter, Satyam's revenues increased 33.3% to $375.6 million, while net income grew 24% to $71.1 million. (The company did not provide its 2005 fourth-quarter results in U.S. dollars.) In that time, the company snagged 34 new customers.
Satyam provides various IT services, including the outsourcing of back-office operations, IT consulting, and software development. It also implements enterprise resource planning (ERP) applications based on technologies from Oracle
Interestingly enough, Satyam's small size -- at least compared to its rivals -- has become an advantage. The company is benefiting from multisourcing, a trend in which customers demand two or more IT vendors on major projects to capitalize on each party's specialized expertise.
Multisourcing is helping Satyam participate in larger deals. In the fourth quarter, the company teamed-up with Tata on a contract for Qantas Airways, earning a roughly $90 million cut of the $145 million deal.
According to Peter Zaimes, an analyst at Technology Business Research, Satyam will continue to benefit from multisourcing. "We believe Satyam recognized this trend earlier this year," Zaimes said, "and went out and hired Hetzel Folden, a former Computer Sciences Corp.
Over the past year, Satyam has been the subject of several buyout rumors. One possible suitor is IBM
Still, it's a bad idea to buy on such speculation. Yet the rumors do highlight Satyam's advantages: its global footprint, low-cost business model, innovative multisourcing strategy, and 30%-plus revenue growth rate. It may be No. 4 in its sector, but for Satyam, that's looking like a pretty good position.
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