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Home > Business > Business Headline > Report

Primentor brokers $60m outsourcing deal for local firm

Bipin Chandran in New Delhi | April 19, 2003 13:12 IST

Primentor, the outsourcing advisory firm owned by ex-Infoscion Phaneesh Murthy, has helped a US-based Fortune 500 company to outsource a three-year $60 million deal to an Indian software services company.

This is the largest deal that Primentor has executed since its inception.

Murthy had quit Infosys Technologies, while serving as head of the company's global sales and marketing, in wake of a harassment suit filed by a woman employee in the US.

"We have done some small technology related deals in the Silicon Valley. But the $60 million deal is the largest one that we have outsourced to India," Murthy said.

Murthy said Indian software companies are on the verge of getting some of the largest deals in the recent times.

"There are some of the large deals that are happening. It is up to majors such as Infosys and Wipro to device a strategy to get these deals. Companies want to outsource to India," Murthy added.

According to him, cost advantage and the ability of Indian companies to execute projects have helped them gain a foothold in the international market.

"Indian companies offer excellent talent and project execution capabilities. But cost still remains the main factor that influences the decision of companies to outsource to India," he said.

When asked about the reasons for the dismal performance of the Indian software companies in the recent results, Murthy said, "The recent deals that the top of the line companies get are large multi-year contracts, which have a higher cost factor in the first year.

That is one the main reason for the fall in profits despite and increase in profits. Similarly rates for the deals are also down, which pushes down the margins. In some strategic outsourcing deals, billing rates have come down by as much as 24 per cent."

Murthy and his wife Jaya Murthy have formed Primentor, a US-based strategy consulting company focused on the IT and business process industries with an outsourcing perspective.

The company's advisory services include partner and vendor selection, deal structuring, contract administration, strategy consulting, service definitions, brand consulting, blueprints for the future, sales, and account management training.


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