Saturday, January 31, 2009

Scam-hit Satyam unlikely to exist: Gartner

The scam-stricken Satyam Computer
is unlikely to exist in its current form, according to a study by research firm Gartner.

It is expected to discontinue some of its businesses, service lines or cease to exist in certain geographies by 2010. The study indicated that even the name Satyam may not be around by that time, as the company is expected to undergo a complete change, in ownership and organizationally.

Satyam’s ability to sign on new clients during 2009 has significantly diminished, says the study. ‘‘In addition, it will be challenged to invest in client engagements, staff developments or R&D, all critical elements for IT services,’’ said Gartner’s V-P for research, Frances Karamouzis.

For the study, Gartner interviewed representatives of over 30 top Fortune 500 clients of Satyam, 20 top non-Satyam clients, the board of Satyam and CEOs of six tier-I Indian IT firms including TCS, Wipro, Infosys Technologies, Cognizant and HCL.

Many respondents felt that the job of a new chief executive officer or COO or CFO of Satyam will be extremely demanding as holding the existing clients is going to be a tough task. Also, with a monthly payroll of more than $125 million and dire cash flow issues, the future does not bode well for the company.

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