Annuals

The Axon Effect

DQI Bureau

11 Jul 2009 00:00 IST

New Update

By outbidding Infosys and acquiring Axon in October 08, HCL Tech completed
the biggest takeover in the history of Indian IT ($658 mn), overtaking Wipros
Infocrossing acquisition ($548 mn) in FY 08.

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The acquisition was part of HCLTs inorganic growth strategy dubbed blue
ocean, to expand in high potential areas where competition is low. The
acquisition of Axon shifted the balance of power in the world of SAP consulting
giving HCLT access to 60% more SAP consultants than its nearest Indian rival,
Satyam (before its troubles began). The impact was already visible when OND
became the biggest ever quarter in HCLs history (deals crossing $1 bn) in terms
of booking. JFM also showed a 117% Q-o-Q increase in enterprise application
services revenues.

HCLT continued with its transformation strategy of focusing on big deals,
especially in RIM and engineering services. The highlights were the deals with
Nokia (five year end-to-end global helpdesk and desktop management), Xerox (six
years data center services) and Readers Digest (total IT outsourcing for $350
mn). Aerospace, the mainstay of engineering services, held out well with HCLT
gaining license for locally manufacturing defense systems. It also announced a
strategic partnership with Circor Aerospace and ramped up its aerospace
offerings by adding 25% more engineers to its already existing 2,300
professionals. The company also played up its geographical mix, with increasing
contribution from APAC. Huge deals came in from UTi, MTV Networks, Misys and
Serena Software. On the BPO front, HCLT acquired Control Point Solutions and
Liberata Financial Services to foray into platform-based insurance BPO.

RANK 8	HCL TECHNOLOGIES
	CyberMedia Research Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â DQ Estimates
Vineet Nayar, CEO
Ranjeet Narasimhan, president and CEO, BPO Services Rajeev Sawhney, corporate VP Anant Gupta, President HCL Comnet and SCPV Shami Khorana, senior corporate VP research lab and chief technologist
s Strengths
Has gained considerably in EAS space owing to Axon acquisition. Infrastructure services remain a stronghold. Is focusing more on global strategic partnerships.
t Weaknesses
Lack a widespread global delivery network Two BFSI clients were the worst hit during slowdown	FACTSHEET
	l Start-up Year: 1991 l Products & Services: Software, infrastructure, and BPO l Employees: 51,979 l Address: A-10-11, Sector-III, Noida 201301 l Tel: 01202535071 l Fax: 01202520917 l Website: www.hcltech.com
	Highlights
	Crossed $2 bn, in revenues Launched its Business Aligned R&D campaign to reinforce leadership in manufacturing space. Launched GoPro, its soft-skills program. Launched its Enterprise Transformation Services promising tangible cost savings priced on revenue share or outcome based model. Announced its green data center services Appointed Nayar as Board Director

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Manufacturing and high-tech services still dominated, but with BFSI stagnant
as two of its biggest clients fell victim to recession, HCLT looked keenly at
expanding in media and entertainment: apart from Readers Digest, HCLT entered
Macau to target casinos. Pharma and telecom were identified as other potential
growth sectors, after HCLT inked a pact with IIT Kharagpur and MIT Harvard to
assess emerging markets and verticals. DQ

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