Indian IT giant Sonata discusses the new office in Amsterdam and European growth plans

B Ramaswamy, President and Managing Director, Sonata Software, talks to Connect about the company's new office in Amsterdam and Sonata's European growth plans.

Your Amsterdam office will be Sonata’s third office in Europe after UK and Germany. What were the particular reasons then to setup an office in the Netherlands? What advantages does the Netherlands have over these countries?

The Netherlands by itself is the fifth largest in terms of IT spend. We have a policy of setting up presence near our customers, because that's how we can service them better. Some of our global customers who have presence in the Netherlands wanted us to be there so that we are able to increase our relationship and the kind of outsourcing we do with them. We service the whole of Europe through the tie-up we have with TUI InfoTec in Germany. But the company doesn’t have a local presence in many countries and the Netherlands happens to be one of them.
Our aim is to serve Benelux countries through this hub. As compared to other companies, Sonata has a high bias towards Europe in terms of revenues and the kind of investments we have made. We believe that a model that works in the US may not work in Europe. We needed to have local presence and strong customer ties, so we are using a combination of having our own office and using a local presence to make sure we have a very comfortable experience as far as our customers are concerned in terms of outsourcing.

What are your views on the IT consulting and services industry in Europe, particularly in the Netherlands?

According to analysts, 2009 was a year where they saw negative growth in terms of IT spends including outsourcing, whereas 2010 is going to see a significant movement in terms of increase in outsourcing. For example, in the Netherlands the forecast is that while it was minus 2 percent last year, there would be almost 6 percent year-on-year growth. There is a significant trend towards outsourcing and there is also the fact that companies have competitive pressures and tight IT budgets that they need to manage. So that is the growth we are trying to look at in the long term.

Sonata has been consistently ranked among the top-20 IT software services exporters in India by NASSCOM and also ranked Global #2 in the 2008 Top Ten ESO: Outsourced Software Development in The Black Book of Outsourcing. How is the company planning to leverage this position to grow in the European market?

We have alliances with companies like SAP and Microsoft. For example, for SAP we are one of the five early partners for hosted solutions, which we are hosting out of our Hannover facility in Germany so that would be leveraged in the entire European area. Secondly, one of our largest IT operations in data centres is managed out of Hannover. We also have bolted on remote infrastructure management or RIM, which is partly done out of India. This combination is a very compelling proposition for customers in Europe and that's something we are going to offer to the entire geography.
We are a gold certified partner and a global services provider for Microsoft, so that alliance also gives us the ability to offer solutions around key Microsoft technologies like Microsoft Dynamics POS and Business Productivity Online Standard Suite (BPOS). These are some things we will bring to the European market, which we are already doing in other geographies.

Is Sonata looking at any joint ventures with or acquisition of any Dutch companies in the near future?

We are looking at joint ventures and acquisitions, like how we did with TUI InfoTec. We are always looking out for such opportunities.

What has your personal experience been like in the Netherlands?