'Mahindra Satyam's clients need more clarity'

Mahindra Satyam will be able to keep its revenue in the range of $900 million to $1.1 billion, says a study by Forrester, an IT research firm. However, the report stated that clients are still unclear about what is happening in the company.

The report is based on client interaction the analyst firm has had even after Tech Mahindra’s senior management started to talk with some of the customers. “Satyam has close to 600 clients. Our understanding is that the management started talking to the large clients and the talks are still at the top level. How the relationship will pan out is everyone’s guess,” said Sudin Apte, Senior Analyst, Forrestor.

Citing an instance, Apte said many of the clients were not aware of what would happen if the Open Offer for shares failed. “Besides, there was enough confusion in the market by competition as well. Some of the customers turned to us to ask what happens. People were also not aware that because of this, Mahindra Satyam now has capital. Moreover, clients are also not clear as to how this capital is going to be used,” he added.

The report further stated that many clients are keen to know the road map of the acquisition and how the integration will pan out. For example, a tier-1 auto supplier and large Satyam client told Forrester that while they intend to continue business with Satyam, the uncertainty and complete lack of any communication from the new leadership is making the client consider exploring other options, said Apte.

The other challenge in case of Mahindra Satyam is scaling up the existing clients’ base.