Acquisition is the Key

There are only a handful of Indian IT companies that have dared
to acquire companies larger than themselves and stay profitable. Sobha
Renaissance Information Technology (SRIT) is one such company. SRIT has also
chosen to make headway in the OSS-BSS space.

This company has chosen the acquisition path to grow its prowess
in the telecom and healthcare sectors. Within a year, it braved its way into two
major acquisitions in the telecom space.

In August this year, SRIT successfully completed its acquisition
of Objective Systems Integrators (OSI) from Agilent Technologies. In mid 2006,
it acquired Billing Components AG, a telecom business support systems (BSS)
product and solutions company.

SRIT was incorporated in 1999. It was ranked among the top fifty
fastest growing technology companies by Deloitte Touche Tohmatsu Asia Pacific
Region, in 2006. In the last 18 months, SRIT effected a number of small to
mid-sized acquisitions. This included Munich-based Billing Components AG in the
telecom business support systems (BSS) space and the buyout of Objective Systems
Integrators (OSI), a player in telecom operations support systems (OSS), from
Agilent Technologies. OSI's NETeXPERT is one of the strongest brands for
service assurance and fulfillment.

SRIT now services over 150 telecom companies and service
providers. As per the newly released business plan, the company expects to grow
its telecom revenue to $150 mn in FY 2010-11. The expanded SRIT is reorganizing
itself into five distinct strategic business units (SBUs)-OSI Telecoms OSS
Group, BC Telecoms BSS Group, Integrated HealthCare Group, ODC Group, and
Enterprise Solutions Group.

Madhu Nambiar, co-founder and CEO, SRIT, feels that taking time
to mature and learn from others' mistakes has enabled SRIT to successfully
identify and scale its growth path. His ambition is to be the first company to
roll out converged OSS and BSS solutions. "There is no need to reinvent the
wheel. Better to go after companies that have developed and established a
successful system. This is why we chose to acquire OSI and Billing
Components," says Nambiar.

With these acquisitions, SRIT was able to leapfrog into the
premier league of providers of OSS-BSS solutions. The acquisition of Agilent's
bleeding but reputed business unit, OSI, was a tough nut to crack. Pitted
against several MNCs, the Indian company banked on its strengths of being a
complimenting partner. SRIT had done its homework well and was able to impress
the Agilent group with its solid strategy.

Hamish Butler, currently the CEO of OSI, was earlier the general
manager for the NETeXPERT business within Agilent at the time of the
acquisition. He advocates SRIT as a best fit, with OSI saying, "We were
impressed by SRIT's solid strategic fit with our objectives as a company.
Their software and services focus fit well with ours. The other key factor was
that SRIT is a company with values for quality and good people practices in
place."

So impressive was the acquisition of OSI that several former and
old employees of OSI and Agilent chose to join OSI in its new avatar. This
further consolidated the branding of NETeXPERT in the market. Performing a
seamless transfer of about 120 Agilent staff members, spread across the US,
Taiwan, Thailand, Malaysia, Singapore, France, Spain, Australia, New Zealand,
Canada, and India, wasn't an easy task, but SRIT did it with ease.

On establishing a distinct identity for itself, Nambiar says,
"Taking advantage from network-centric applications, we have adopted a
customer-centric approach. We are adding value for our customers, assuring
quality services."

With Billing Components and OSI products, SRIT is geared to
target tier-1 wireline and wireless companies as well as tier- 2 and 3 service
providers in Europe, Middle East, and India. "There is a lot of opportunity
for cross-selling by adding BC component into OSI's product," says
Nambiar.

SRIT is eyeing a growth rate of over 30%. It's eyeing the
large replacement market and greenfield operations where the number of operators
is increasing. MVNO or mobile virtual network operator is another area that
promises a good business opportunity for the new outfit.

The mergers and acquisition activity has changed the competitive
landscape in the telecom OSS space by giving large vendors such as IBM a bigger
stake. Due largely to its acquisition of Micromuse last year, IBM is now among
the top vendors with a 7% market share. Last April, India's OSS giant Subex
Systems created a milestone by acquiring UK-based Azure Solutions and, thus,
delivering the largest overseas acquisition by an Indian software company. It
went on to acquire Syndesis, a leading provider of telecom OSS solutions,
earlier this year. Now SRIT's move into the big boys' space is sure to
accelerate the OSS M&A.

Malovika Rao


malovikar@cybermedia.co.in