The Hindu Business Line : Satyam clients in ‘watch’ mode

With continuing uncertainties about human resources, transition and state of investigations the top existing and prospective clients are sending teams to Mahindra Satyam’s facilities here to have a feel of the situation.

“They would like to assess the situation to compare with its peers before taking a final decision on awarding or renewing the contracts. The list includes those who give orders in the range of $10-15 million.

A prospective big domestic customer too did a physical check,” sources in Satyam told Business Line.

The top Mahindra executives, including Mr Anand Mahindra, Mr Vineet Nayar and Mr C.P. Gurnani, are on a global campaign to convince and retain clients.

The clients are apprehensive about the high-profile exits Satyam witnessed in the last seven months after the scam broke out in January, 2009.

“The existing clients want to know who have succeeded people such as Mr Subu Subramanian, who were heading the Manufacturing and Auto vertical. They are also wondering whether the verticals are in tact or key people in those verticals also moved out along with the leaders,” the sources said.

Forrester observation

Mr Sudin Apte of Forrester consulting firm, who has been following the company closely, said that some clients were keen to know the roadmap of the acquisition and how the integration would pan out.

“But Tech Mahindra is releasing very limited information, citing compliance restrictions. This has left many clients in a state of confusion about the future and the timeframe of the deal completion,” he said in the report Evaluating Satyam’s New Avatar.

Cancellations

Mr Bhavtosh Vajpayee, an analyst with CLSA India, said that at least 10 top clients including Telstra, Applied Materials, Pfizer and State Farm Insurance had cancelled Satyam contracts, while some others reduced their work. Those who stayed could bargain for lesser billing rates, he felt.

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