Q.) How do you blow all your money in a day?
A.) Invest in a company called Satyam.
Over the last few weeks we had the Satyam saga unfolding in front of us.
A company which was the recepient of the prestigious "Golden Peacock" award for corporate world with over 2 billion dollars in the bank as reserves decided to buy Maytas infrastructure in a surprise move which smack of the promoter misusing company funds.
But the investors and market baulked, tanking down the share price. The management reneged on the deal but the damage had been done. The share prices were so low that a takeover seem imminent. A large number of shares were being bought by two or three companies.
Then one morning the promoter writes a letter saying all the cash reserves were imaginary and the books had been cooked for decades.
.
It was over.
The prices went below the face value. In one mement all the talk of the IT sector as a shining example of corporate governance was over.
So now as the investigators pick through the debris, I wonder how will SATYAMgate affect the Indian IT outsourcing industry.
Now some people beleive it will scare companies away from India and its all doomed.
I beg to differ.
Satyamgate is nothing more than Enron for India. Or maybe a Madoff.
Its a bad scandal but it just shows mighty are greedy and weak.
Unlike what Heena says on her blog, call-centers are just a small part of the out sourcing story. The bigger picture is in IT where new development, testing and more importantly maintenance projects are being handled by big IT companies like Infosys, Wipro, etc.
Maintenace especially cannot be stopped or easily shifted to others. So the thing is projects will stay. We save a lot of money for the companies which as Bank of America's chairman said allows them to expand around the world.
And today the indian IT industry has built up an expertise which cannot be easily matched.
Also SATYAMs demise is other IT companies gain as client will shift. I can tell you some have been gained even when there is no active poaching
The situation is bad because of recession but its not apocalyptic.
On a random note
Bush Tours America To Survey Damage Caused By His Disastrous Presidency
4 comments:
i agree India's IT culture is unmatched worldwide. I dont think companies will pull out of India, unless something major happens. But, I do think the kind of position that it has currently will decline as other emerging countries become competitors.
I wont really say unmatched worldwide but we sure lead with the global delivery model.
Yes companies could pull out if something major happens but then the risk exists everywhere. Also some may need a reason and exit but many will remain. IBM, Cognizant and Accenture also have a big presence in India.
I again disagree. The ONLY competition is China and they still cant speak English.
Few other countries have the manpower or the education set up.
The funny thing is Infosys already has subsidaries or development centers in Mauritius,Australia, Mexico and China
"The ONLY competition is China and they still cant speak English"
- yes so far. But this will change.
Yup that will change.
In fact in two years the first batch of English schooled from primary students from China will pass out of college.
But to gain a foothold in the outsourcing field will be tough.
Also the pie is quite large.
Progress need not be the result of cannibalization
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