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Satyam Computer Services, Ltd. (SAY) is a worldwide consulting and information technology (IT) company, providing end-to-end IT solutions that help customers re-engineer and re-invent their businesses, improve efficiency of their IT infrastructure, and gain a competitive advantage. Through its global delivery model, the company leverages a combination of its offshore technology centers in India, its offsite-site overseas facilities in Australia, Canada, China, Hungary, Japan, Malaysia, Singapore, United Arab Emirates, United Kingdom, and the United States, its near-shore technology center in Canada, and onsite teams located at its client's offices, to deliver its services to its clients.
Satyam is a leading outsourcing firm. As reported in 2006 in the Hindu Business Line: IT services provider Satyam Computer Services Ltd, has been ranked as the world's leading engineering services outsourcing vendor by the Brown-Wilson Group (BWG). A BWG survey analysed 872 information technology and engineering outsourcing vendors in 63 countries and its results appeared in the company's "Black Book of Outsourcing," a highly respected publication. Satyam led in several categories, including vendor overall preference, flexible pricing and brand image.
The company breaks down its services into four different categories
Software Development and Maintenance (43.9% of revenues in 2Q08) - The company designs, develops and implements customized IT solutions software for a variety of business processes and requirements ranging from single-platform, single site solutions, to multi-platform, multi-site systems. In addition, Satyam also provides maintenance services for large software systems, including modifications and enhancements, as well as production support for over 2,000 applications including JDE, Oracle and SAP.
Consulting and Enterprise Business Solutions (45.0%) - Leveraging its alliances with Oracle, SAP and Informatica, Satyam offers a portfolio of consulting and business solutions to its clients. The company provides solutions and services in the areas of enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM), data warehousing and business intelligence, knowledge management, document management, and enterprise application integration.
Extended Engineering Solutions (6.5%) - Satyam provides mechanical designing, embedded and electronic designing, product and process analysis, product life-cycle management services using computer-aided design, modeling and engineering tools for clients in industries such as automotive, aerospace, consumer electronics, industrial equipment, semiconductors, and telecommunications.
Infrastructure Management Services (4.6%) Satyam also provides infrastructure hosting and technology support for its clients in its own data center located in Ohio. These hosting and support services include administration, infrastructure management, migration, upgrades, configuration, backup, security management, and electrical and control systems engineering.
The company also offers Business Processing Outsourcing (BPO) services through its wholly-owned subsidiary, Satyam BPO Limited, which has recently been accredited as eSCM Level 5 Company, the world's first company to achieve this distinction. These services include product support, a technical help desk, back-office transaction processing and customer care centers in the areas of finance and accounting, human resources, claims administration and document management along with research, analytics, and animation services to its portfolio. Satyam's presence spans 57 countries and six continents around the globe, and the company has over 41,423 employees at the end of the second quarter of 2008, which includes over 29,222 associates in India. Geographically, the company derived 58.4% of revenues in 2Q08 from North America, 20.9% from Europe and the remaining 20.6% from the rest of the world.
On January 21, 2008, Satyam (SAY) reported 3rd quarter results for the quarter ended December 31, 2007. Revenue came in at $562.9 million, up 49.9% year-over-year and up 10.5% sequentially. Net income was $109.7 million, up 54.3% from the prior year and up 7.7% from the prior quarter. Basic earnings came in at $.33/share, up 50% from last year, and up 6.5% from the prior quarter. The company raised guidance for 2008, which guidance now between $2.119.2 and $2.122 billion, suggesting a growth rate between 45.0 and 45.2% over the 2007 results. Earnings were estimated for 2008 to come at $1.27/share suggesting a growth rate of 39.6% over the prior year.
It has been a commonplace event for many companies to outsource IT services to India and elsewhere to provide this service at a lower cost than available in America. However, one of the beneficial effects of the decline in the dollar value has been that it may once again be cost-effective to provide some of these services and manufacturing stateside instead of overseas. This insourcing, as it is called, is best exemplified by a story about IKEA, the European furniture manufacturer, which has announced plans to manufacture in the United States rather than in Poland.