As most people (atleast the IT folks in India) would know by now, Tech Mahindra has won the bid for Satyam. While, the current debate on valuation is expected to continue for a while, I thought, I'd just pen my own SWOT from a Tech Mahindra perspective.
Given that I own a few shares of Tech Mahindra (although NEVER did for Satyam), this may be seen as the "informed" view of an industry outsider ?
Strengths (read Advantages)
- TM has traditionally been in the telecom vertical and is perceived as a "vertical industry" player. This has meant that for a while, TM has been missing out on the broad "general business" areas of Retail, distribution, manufacturing, services etc. This would add considerable breadth
- Satyam supposedly has a fairly strong "fixed price" model (profitability unknown :-)) that should be good for TM
- Satyam's reach in both the middle east and AUS / NZ markets
Weakness (read Disadvantage)
- Management /Thought leadership : Especially in the areas of Packaged applications (SAP, Oracle, MS Dynamics), Custom development (non-product) and managed services
- Culture : Not sure how they'd be able to reconcile the bottom load model of Satyam at cheaper rates to the vertical strength model that TM has
- Parity : This just has to do with employee status and relationship management ?
Opportunity
- The biggest opportunity for TM would be the opening of the horizontal "multinational" enterprise - ranging from Travel industry to retail to pharma/healthcare
- The opening of the COTS (read as ERP/ CRM) market
Threat
- Client / customer and account retention (and this one needs no elaboration)
- Cost advantage ? (esp. given that most of the contracts that Satyam needs to deliver on would be on a very aggressive P&L) and the market perception / environment
However, what is very clear is that this is probably the start of a clear sign of consolidation.
