Mahindra Satyam ties up with defence firm Saab

Mahindra Satyam today announced its plans to collaborate with defence and security company Saab to develop its operations in India for the global defence and homeland security market.

While the company did not give any official figure, the “ongoing-MoU” deal is reportedly worth $400 million (around Rs 1,850 crore) over a five-year period.

“It is difficult to put a number to this collaboration with Saab. The only thing we can say is that this is a first of its kind and has a huge market opportunity,” a company spokesperson said when asked to comment on the deal’s size.

By far, this is the biggest deal that Satyam has secured after it was acquired by Tech Mahindra about six months ago. Mahindra Satyam had 500-odd customers, of which close to 100 dropped their contracts with the then fourth-largest IT outsourcer after the confession by its founder, B Ramalinga Raju, that he had cooked the company’s books for several years.

After the acquisition by Tech Mahindra, Satyam won 30 new logos, most of them single-digit million-dollar contracts, besides a five-year SAP contract with global pharmaceutical major GlaxoSmithKline and a three-year extension of a contract from General Electric.

The collaboration with Saab would require Mahindra Satyam and Saab to jointly address the Battlefield Management System (BMS) for the Indian Army. The solution for BMS, proposed by Saab, is field-proven and deployed in many countries. Both parties intend to work together for the Indian BMS programme and would explore globalisation of co-developed artefacts.

Both the companies have already set up a Centre of Excellence for Network Centric Warfare (CoE-NCW) to offer comprehensive skills and a repository of tools, systems, middleware, integration platforms and system showcases in the NCW field.

This would be a development centre for mission critical applications and Command, Control, Communications, Computers and Intelligence (C4I) solutions for global opportunities accessible to either of the partners.

The CoE’s capabilities would also span into the homeland security arena, where the focus would be on end-to-end security solutions.

In the wake of the Indian government’s large investment plans for nationwide security, this CoE’s homeland security expertise would be targeted towards tapping this high potential market, according to Mahindra Satyam Chief Executive Officer (CEO) C P Gurnani.

Saab CEO and President Åke Svensson, in a press statement today, said: “We view this relationship with Mahindra Satyam as a strategic meeting of two highly skilled teams believing in technical and engineering excellence.”

Mahindra Group Vice-Chairman and Managing Director Anand Mahindra said the collaboration was a strategic step “towards synergising Mahindra Satyam’s unique strengths in mission critical systems, enterprise resource planning (ERP), engineering services, avionics and integration and Mahindra Systech’s manufacturing capabilities and engineering excellence. This would leverage Saab’s expertise in C4I programmes, network-centric warfare and special IT systems”.

Saab is one of the major European defence and security players with around 13,300 employees. It develops and manufactures the Gripen combat aircraft (one of the contenders in the IAF’s multi-billion deal for 126 jets), and other operations include command and control, electronic warfare, sensors, weapons and communications.