HCL Infosystems to expand its services business

Domestic IT products and infrastructure major HCL Infosystems, plans to expand its systems integration (SI) business. Defence, security and education are the three new verticals that are expected to boost the company’s SI revenue in the coming few years. HCL Infosystems is also beefing up its exports portfolio.

SI means getting all the subsystem components together--hardware, software and packed software. With the Indian market now opening up to the services offering, companies are looking for vendors who can provide both the hardware and software mix.

“We have been a dominant player in the domestic hardware industry but in the recent past we have witnessed that the services opportunity is also increasing and we want to be a part of that growth,” said Ajai Chowdhry, chairman and CEO, HCL Infosystems.

Currently, distribution and telecommunication business contributes 70 per cent to the company’s revenue and SI (computing business) is just 30 per cent. “In the next three years we want revenues from both these segments to be 50:50 ratio,” said Chowdhry. The company has bagged contracts worth Rs 1,200 crore in the last five months.

HCL Infosystems with revenue of Rs 12,605 crore for FY07-08 believes that the domestic market opportunity is worth Rs 142,600 crore by 2012. Of which the SI and services opportunity alone will be Rs 83,300 crore by 2012.

The other growth opportunities are education (Rs 13,00 crore by 2012), managed network services (Rs 950 crore) and distribution and lifestyle products (Rs 38,310 crore).

HCL Infosystems is also gearing up its exports business, which was introduced 10 months back. The company is targeting markets in Africa, South Asia, Middles East and North Africa. Chowdhry said, “Initially we will take the hardware and networking expertise that HCL has and then in another two years will provide offerings like SI.” The company is already implementing a SI project in Africa that will connect 53 African countries into one network.

Within the SI business the company is already focused on vertical such as Utilities, BFSI, Telecommunication, Railways, Infrastructure, e-governance, health, retail and media and entertainment.

To tap the domestic market services pie HCL Infosystems may also look into the business process outsourcing segment. It is already providing some process outsourcing to some of its mutual fund clients. “We are also ready for acquisition if it allows us to get a good foot-hold in some process or specialises in any of the verticals that we are specialising,” said J V Ramamurthy, COO, HCL Infosystems.