Indian Outsourcer Satyam Expanding in China

Indian software and services outsourcer Satyam Computer Services will increase staff numbers in China to about 3,000 by 2008, from around 400 today.

The increase will help the company expand its business in the country, as well as use its facilities there as near-shore services delivery centers for customers in Japan and Hong Kong, Raghavendra Tripathi, Satyam’s country head for China, said on Wednesday.

Satyam also plans to use staff in China to service its clients in North America. As the company’s business expands, it is looking for low-cost locations other than India to hire staff for its operations, Tripathi said. “We are growing fast, and India may not be able to meet all our staff requirements down the line,” he said.

China currently accounts for about 1 percent of Satyam’s staff, and the company plans to take it to 10 percent in three to four years, Tripathi said. Once it expands in China, the company will be able to offer its customers the option of having services delivered from both India and China. “We expect that 80 percent of the delivery will still be done from India in such cases,” he added.

Satyam announced Wednesday that it is setting up a new software development center at the Guangzhou Software Park. The company will have 100 staff at Guangzhou by the end of next year. It plans to have up to 1,000 staff at the facility by the end of 2008.

The company already has about 400 staff in China operating out of development centers in Shanghai and Dalian, and a sales office in Beijing. The company may set up a fourth development facility in Beijing, and is also scouting for a tier-two city to locate its fifth development center, Tripathi said. The company set up its first development center in China in Shanghai in 2002.

Top Indian outsourcers have been expanding in China to service the Chinese operations of their multinational customers, and also to address markets in the region. About 80 percent of Satyam’s business in China comes from new accounts signed in China, but most of these are still multinational companies or Chinese joint ventures with multinational companies. The domestic Chinese market is still dominated by business from government, which goes mainly to local Chinese companies, Tripathi said.

-John Ribeiro, IDG News Service (Bangalore Bureau)

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