Independent software testing cos hunt for business in big outsourcing deals

ABN Amro's recent $ 2.2 billion information technology (IT) outsourcing contracts have made a whole range of Indian companies look for business flowing from different sections of the outsourcing.

Maveric Systems, an independent software testing company, has been pitching for testing business that would flow out of the ABN Amro contracts.

For Maveric and other software testing companies such as Thinksoft Global, more opportunities lie ahead as three more big outsourcing deals (two from insurance companies and one from a bank) from Europe are expected to be announced over the next year.

Software testing involves checking the quality of the software that has been developed for a specific purpose.

For Maveric, the current situation presents opportunities. Business flowing out the ABN contract and the ones to follow would present the chance to reach the size needed to give an edge to its marketing effort.

Maveric's CEO I Ranga Reddy estimated that a turnover of $6 million would give it critical mass (the company said that it expected a turnover of about $ 3 million in the current fiscal).

The critical mass would give Maveric "the marketing bandwidth to be really big," said Reddy.

Stand alone testing companies need to be able to make offshore deliveries to improve competitiveness. Maveric, for instance, has drawn its revenue mostly from domestic business and onsite work for overseas clients.

Reddy said that Maveric has a couple of offshore proposals for UK-based clients which are at a closing stage.

Maveric and other stand alone testing companies also face competition from the testing divisions of full fledged software service providers such as Infosys.

Reddy felt that a stand alone testing company such as Maveric was more likely to complement the testing business of Infosys. The bigger software companies outsource some of their testing work to independent companies.

Arguably, more serious competition would come from mid-sized software companies such as Polaris and Hexaware that may market their testing services as an entry strategy in outsourcing contracts.

Reddy said that one of Maveric's strengths was that over the five years of its existence it has acquired domain expertise in the financial services.

The company, which has 280 people on board at present, can go up to a strength of 700 people with just the financial services vertical, said Reddy.

The financial services area is likely to be the core area of the company for at least another two years, said Reddy.