Will Satyam recover....

Friday, January 30, 2009

Its recession everywhere and there are losses, job cuts, close down at most of the developed countries and most of the CEO aknowledge it is the most turbulent times in their life.

In spite of this every one wish is that Satyam as a company recovers as company, however there are challenges.

i) There is no point any financial investor to buy shares from the market, as these cash is highly unlikely to go into the company. Hence the option is to increase the equity of satyam and the inverstor should invest in equity of Satyam so that it goes as "Cash" in the system.

ii) As of now, there is no clear indication about the bench strength in Satyam. This is again going to be challenge as already certain Satyam customer indicated terminating their contract. In all IT companies, I believe there was too much of optimism in 'recruitment' in 2005 through 2008. Hence, finding work for all the resource and/or clean up is going to be a challenge.

iii) What even more suprising is that all fortune 500 companies are particular on pricing and most of them are into a 'multi vendor' concept and they do not want dependency on a single vendor and look out for cheap resource unless its mission critical. There is lot of negotiation before a contract is finalized. Its going to be great acheivement for any IT company to show growth in range of 20 to 30% Q on Q basis.

Its going to be interesting to look how IT services company having employee base of 40,000+ come out successfully from 2009 onwards....

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