Satyam plans to offer cloud services to customers

The enterprise cloud computing business for Satyam is expected to take off only by the first quarter of then and there year, he said.

The cloud computing market is growing fast because it is starting from a small base, however it will not be a large market as soon as possible, said Sudin Apte, principal analyst and CEO of Offshore Insights, a technology and advisory firm in Pune, India.

The enterprise is

Cloud computing for the enterprise is, nevertheless, expected to change the revenue model for this part of Satyam's business, as customers will nevertheless start paying by the transaction or on a subscription, Kunwar said.

Satyam is but focused on getting more business from existing customers, and on getting some of its former customers to return afterwards it became embroiled in a financial scandal last year. Tech Mahindra, another Indian outsourcer, acquired a 43 percent stake in the company last year afterwards the Indian government decided to bring a strategic investor into the ailing company. Satyam nevertheless uses the "Mahindra Satyam" brand.

The long run merge Satyam with the company

Tech Mahindra hopes to in the long run merge Satyam with the company, which by current revenue levels will create a company with combined revenue of over US$2 billion. The combined entity would on the whole be far smaller than some of India's top outsourcers, nevertheless the intention is not to compete head on with the big players in all markets yet to focus on a few vertical markets, Kunwar said.

Tech Mahindra, which has BT as a key investor, and is focused on the telecommunications sector, hopes to benefit from synergies between the two companies. Tech Mahindra has so far not been able to tap the demand from its telecommunications clients for enterprise applications like ERP and business intelligence, said Vivek Kalra vice president for the Americas at Tech Mahindra.

Satyam is expected to fill that gap, and Tech Mahindra is already selling enterprise software development and services from Satyam to some of its clients in the telecommunications sector. Satyam will as well be able to use Tech Mahindra's expertise in telecommunications to offer mobility innovation to its enterprise clients, Kalra said.

A merger will not bring significant benefits to clients as Satyam's strengths are mainly in ERP implementations, Apte said. Clients will look for application development and maintenance services and business process outsourcing, which are small businesses currently for both Satyam and Tech Mahindra.

John Ribeiro covers outsourcing and general research breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is john_ribeiro@idg.com