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By | Mark Ballard 30th January 2007 17:22

Getronics hands apps development to India

MindTree gears for expansion

Dutch IT services giant Getronics has handed its software application business over to an Indian outsourcer, allowing it to move its developers into its expanding consulting division.

MindTree Consulting, a $100m mid-tier outsourcing firm based in Bangalore, India, already has 100 people working on applications business passed its way by Getronics, a €2.6bn firm.

Getronics said in a statement that it expects to expand its applications business five-fold in two years after handing it to MindTree. Its share price has risen on the news.

Anjan Lahiri, executive vice president of IT services at MindTree, said he would also expect to increase the people working on the Getronics account "approximately" five-fold also.

MindTree is planning a float next month in order to raise $70m for expansion. Acquisitions are planned, though the skills crisis has pressed firms like MindTree to take unusual steps to recruit, and retain, staff.

"Last year, we started a public magazine called The Circle of Life, which we sent to the parents of people who work at MindTree. Because in India the parents play a very active role in our professional life, it was important to keep them informed and build a brand with them."

MindTree has 4,300 employees, most of whom work in Bangalore. Its office there has capacity for 7,500 people, though it has opened offices in Chennai and Bhubeneshwar in another effort to attract staff.

In a statement, Getronics CEO Klaas Wagenaar said: "This partnership enables us to free up many of our applications specialists in the Netherlands so that they can join our highly profitable and rapidly growing Consulting and Transformation Services business."

Lahiri said Getronics had little choice but to follow the industry into running its application services business from India, where costs could be cut between a third and a half for an established customer.

"We have 100 people working with them and they have 8,000 people worldwide," he said. "Their offshore work is small. Ten per cent is usual. IBM will do 30 per cent offshore in the next two to three years. Getronics need to move in that direction." ®

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