Future Gazers

Volume 12 - April 2006


	Talking with Srinivas Rao

Srinivas Rao heads the Business development function at Network Solutions (Netsol), now part of IBM. With over 19 years of experience in the Information Technology industry, Srinivas has worked with software and technology services companies across Operations Management, Business Development and Product Management. Prior to joining Network Solutions, Srinivas was responsible for running an Education Services Business. Srinivas holds a Bachelor in Engineering degree from Osmania University, Hyderabad and an MBA from the Indian Institute of Management, Bangalore.

1. Can you give us your view of the Infrastructure Management market?

The overseas market is growing at a significant pace relative to the domestic market It is, I would say, at the start of the growth curve and big deals may occur in 12 – 18 months period. Let me expand on the domestic market – the companies that are outsourcing are those where the core business is not IT. In general, the value of deals is small and companies prefer to adopt a phased approach to infrastructure outsourcing. They will start with on-site outsourcing and move to remote management of networks, server and finally desktop applications.

2. Moving over to the recent takeover by IBM, what are some of the reasons behind this move? Please give Netsol’s perspective on this takeover.

First, you are likely to see significant consolidation in the IT industry. Second, we have an established track record in the domestic market and were looking to expand overseas. This takeover will give us better access to the overseas market. We have tried the partnership model with services companies and met with only limited success. Third, it is always a challenge to monetize software related IP. You need a significant marketing engine to support that and we believe this relationship will help us achieve significant penetration overseas.

We have worked with IBM earlier and realize their commitment to the domestic market. We based our decision on IBM’s brand, growth goals and gaps in IBM’s portfolio, which Netsol could address. Besides, our belief that asset led services model is the future in India and abroad, proved to be the decisive factor for the deal.

The Netsol Management Team

3. Can you describe how the portfolio of the two companies will be integrated?

We have complementary offerings in our service portfolio. Netsol has a product called SNAPiMON, which helps with the monitoring of IT infrastructure in enterprises. This product is world-class and created a lot of interest in the IBM community. Further, our contact center practice and sophisticated NOC can be leveraged greatly. In short, Netsol brings to the table, domestic market expertise and access to the domestic market especially in the fast growing IT/ITES services and software capability.

Similarly, Netsol can leverage a number of service offerings from IBM - Business Resilience and Continuity services, Site Services, Output Management Services, Software Related Services. Business Continuity and disaster recovery is going to be critical and IBM has a strong practice there. Moreover, IBM offers end-to-end services in building data centers right from security, physical access and biometrics to electric power and cabling solutions

4. What are some of the integration activities being carried out?

Netsol will function as a 100% subsidiary of IBM. We are defining a common go to market strategy. It is important for the customers to see one face. Other areas, are arriving at a structure to address the market and communicating to customers on synergies. We had an event recently to meet with customers and communicate about the integration to them. The other area is to have an integrated portfolio delivery. Since we already had a relationship with IBM, we expect this to be easy. IBM is experienced in managing acquisitions and knows what needs to be done. We do not expect any major issues there.

5. Final thoughts …

From a selling perspective, customers have a healthy respect for IBM and so that helps. There are opportunities to be leveraged for both IBM and us. For some of our customers who are looking to expand out of India, we can leverage the IBM reach in different regions. Similarly, our domestic market familiarity and track record will give IBM better access.