Can you also tell me a little bit about the background of this deal, for how long has it been going on? I understand the acquisition has just happened?
It started, I believe, in August. And youve seen the press around Infosys making an initial bid, and then HCL coming in and starting a bit of a bidding war with Infosys; so all that sort of resulted in us signing the paperwork for the acquisition on the 15th of December.
So were now in week nine or week 10 of starting integration and pulling the two organisations together. So what is actually happening is that we rolled all of HCLs SAP capability into Axon, creating HCL Axon, and this is run as a separate division of HCL with its own PNL and its own board, its own reporting line which reports into London.
Are you globally the only company that does SAP outsourcing?
No, were the single largest SAP-only systems integrator. So everyone else has another practice, they have a Microsoft practicewere the single largest SAP-only systems integrator.
Why is there such a huge growth potential in the outsourcing SAP space?
Its an interesting question. I think one reason is because people are looking to do more with SAP. SAP is a package application. It is a complex and capable application to run your business from all dimensions, its easy to implement, its got functionality way beyond what you could imagine to run your business, its got business templates for specific industries such as aerospace or retail, to deal with things such as grocery and merchandising, and people are looking to do more with it now.
In this sort of marketplace, they can either try to find money through a capital expenditure process to spend on increasing their footprint and doing more with SAP, or they could actually look at organisations like HCL and HCL Axon to come in and say well, we can manage your applications for you. We can deliver a 20 per cent cost savings today on managing your applications, and you can then use that 20 per cent to increase your footprint and create competitive advantage by increasing your footprint of SAP. So thats the value proposition, and thats why outsourcing is so critical.
Why is the global outsourcing market seeing a big upswing? Why are more and more countries outsourcing now?
I think one reason is because theres a significant lack of skills. You can go across the region from New Zealand to Australia to Singapore to Malaysia and find that everywhere, theres a lack of technology skills, theres a lack of mathematics (skills), theres a lack of physics in most universities in these countries. The enrolments for these particular academic disciplines are going down. So firstly, theres a talent shortage, and thats whats driving countries like China, Brazil, Poland, and of course India, to receive interest in terms of outsourcing because they have readily available skill sets.
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