Symphony Service Becomes Symphony Teleca

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Sanjay Dhawan expects more loyalty from Indian workers

Sanjay Dhawan is the President and CEO of Symphony Service
Sanjay Dhawan is the President and CEO of Symphony Service | Source

Saas (Software as a Service) Is Becoming Popular

Looking Forward To Acquire a Big Firm

Symphony Service is an outsourcing product engineering company headquartered in California. Last July, Symphony Service was planning to acquire a firm with a presence either in Asia or in European Union with its strength in enterprise mobility. Symphony Service has strength in enterprise software and 90% of is revenue is obtained from USA. Sanjay Dhawan is the President and CEO of Symphony Service. Naturally Symphony Service is looking forward to acquiring a firm that will complement its skill. Symphony Service wants the turnover of the acquired company to be in the range of around $150 million.

Enterprise Mobility Is the Order Of The Day

Enterprise mobility has assumed crucial importance in the present technological world as people want to access data and other information while they are on the move. Devices such as laptops, tablets and smartphones help in this regard. According to an estimate by ABI Research last year, mobile broadband revenues from the enterprise sector for mobile connectivity of netbooks, laptops and media tablets will cross $36 billion internationally by the year 2016. Symphony Service wants to increase its revenues from around $200 million to $500 million by 2014 end. The company is also planning to come out with an IPO in the second half of the current year.

Saas (Software as a Service) Is Becoming Popular

There is a growing trend for software usage. Symphony Service wants to capitalise on this trend by either adopting pay-as-you-go model or as a service. Normally software firms derive only around 6% of their revenues on an average from SaaS (Software as a Service). Sensing a big opportunity in the enterprise mobility sector, Symphony Service wants to tap it without delay. The shift from normal software to SaaS (Software as a Service) may prove to be a turning point for Symphony Service. The company has ambitions to become a premium product development company in the next three to five years.

Infosys Dreaded Acquisition

So far, Symphony Service had been acquiring small companies with turnover in the range of $10-$30 million. But now it is aiming big. Symphony Service feels that if it acquires a big company with a huge turnover, it will automatically increase its revenues and profit. But this is a simplistic thinking. Along with acquiring a big company, Symphony Service may be inviting problems also. Talent retention may pose a big hurdle. Today nobody is prepared to accept diktat from his boss and play a second fiddle if he has the technological superiority. Skilled workers can easily move from one company to another. Therefore retaining talent is the biggest challenge for any company going in for big acquisitions. Probably for this reason, N R Narayana Murthy of Infosys avoided a big acquisition even though he possessed the financial clout for it.

Dhawan expects more loyalty from Indian employees

Pet  dogs are more loyal than IT employees now a days
Pet dogs are more loyal than IT employees now a days | Source

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Symphony Service Becomes Symphony Teleca

Top Clients for Symphony Service

Buying software and installing in their servers has become old fashioned. The latest trend is to pay and use software as and when a company wants. No longer software is deployed in siloed servers and fixed terminals. Rather, cloud computing and mobile devices take care of the requirement to a large extent. Dhawan took over Symphony Service as CEO a little over a year back. Symphony Service has to its credit top clients like Freescale Semiconductor, EMC, Ericsson, Nokia and Google. For Symphony Service’s clients who are software vendors, Managed Services will help them by linking them to quality issues and define outcomes.

Outsourcing R&D

The new business model will be generating lot of growth. Companies are scouting for opportunities to leverage the risk-reward association model wherein software vendors are willing to take some risk in business models across the product lifecycle. Outsourcing of software product development also offers tremendous opportunity for Symphony Service, which is the company’s mainstay. Only around 6.5% of the international R&D spend is outsourced. There are indications that this figure may rise to around 20% in the next three years. In 2010, international market for product engineering services and R&D was around $40 billion, out of which India’s contribution was only around $1 billion.

Dhawan Can Own Some Pet Dogs to Command Loyalty from Them

Apart from talent retention, Symphony Service may face other challenges also like rising salaries, attrition and increasing training costs. Dhawan wants the employees in India to be more loyal to their companies. I do not know whether Dhawan realises that he is living in the twenty first century. Probably Dhawan is imagining that he is living a century back – that is at the beginning of the twentieth century. At that time a person, after completing his school finals will join a company with his skills in typewriting and shorthand. He will be forever loyal to the company and his boss. When the boss enters the office, the employee will stand and salute him. If the boss grants him a salary increase (it was very rare), he will happily accept it. Otherwise he will carry on till his retirement. Switching jobs was a taboo in those times. But today employees change companies like they are changing their shoes. If they like it, they will continue for a while, otherwise quit at the slightest pretext. It is the boss who has to keep the employees under him happy to retain them in the organisation. The word loyalty has simply disappeared from the dictionary of the workers. Only pet dogs continue to be loyal as they have not yet tasted technology. Dhawan can have two or three good dogs and command loyalty from them.

Merger with Teleca

Symphony Service has been promoted by a clutch of Indian entrepreneurs. It acquired a year back JPC Software, an Argentinean firm that offers consulting, solutions and professional services. The acquisition was meant to expand Symphony Service’s support and maintenance business. Many North American firms were expanding in South America and so there was a requirement for local maintenance support and professional services. The cost of acquisition was not revealed by Symphony Service.

Symphony Service expects its revenues to increase to $350 million after its merger with the Swedish telecom solutions provider Teleca. The merger deal will be cross- leveraging each other’s efficiencies. The combined entity is called Symphony Teleca. It will tap the increasing market opportunities for providing firms with cloud-based and wireless services and software. The merger was effected through a share swap and details are not known about it. The merger was made possible because both the companies Teleca and Symphony Service were part of the Ramesh Wadhwani-led private equity firm Symphony Technology Group. A minority stake will be held by another private equity firm TH Lee Putnam Ventures.

Deeper and Broader Market Portfolio after Merger

With the merger of Teleca with it, Symphony Service will have a deeper and broader product portfolio. It will also gain on staff skills and geographic diversification on the wireless sector. Recently, Symphony Teleca showcased its app stores portfolio at the Mobile World Congress. The staff strength of the merged entity has increased from 4100 to 6000. Symphony Teleca will have three business units. One unit will target core software which was Symphony Service’s strength. Another unit will offer services and software to device makers, which was Teleca’s speciality. Another unit is called enterprise mobile unit and it will cross-leverage the strengths of the two merged entities. Symphony Teleca will be competing against international giants like IBM and Accenture among others. Symphony Service’s client base is mainly in North America whereas Teleca’s client base is mainly spread over the European Union.

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