Mastek battles on

(By Anthony Miller – Friday 9th October 2009 11:30am). Size really matters in the UK software and IT services (SITS) marketplace, which is one reason why India-based Mastek (see Mastek – the ‘Little Indian Battler’) suffered a much tougher quarter than peer Infosys (see Infosys takes another small step forward). Indeed, Mastek’s revenues fell by 7% seq. to Rs 1.9m (c. £24m), compared to Infosys’ +3% seq. rise.

Mastek is quite unlike other India-based players as it gets the majority (though now down to 52%) of its revenues from the UK. In its last FY (to June ’09) Mastek’s revenues were close to £125m, of which just over £70m came from the UK. If you have been keeping track of Mastek through UKHotViews, you will know that the company works with a number of UK SITS companies ‘under the covers’, from BPO player Capita to tiny financial services software firm, Focus Solutions (see Focus and Mastek focus on Life and Pensions). Mastek’s biggest UK client is BT, through its work on the NPfIT ‘Spine’. However, Mastek’s BT/NHS work is now ramping down, which is part of the reason for the quarter’s revenue decline.

I met up again with Mastek UK senior executive Joe Venkataraman recently and he told me he is keen to build up their ‘direct to customer’ business in the UK. Currently some 70-75% of Mastek’s UK revenues is channelled via partners such as Capita and BT. Frankly, I think Mastek will have more success in the UK as the ‘offshore back-end’ to local SITS suppliers - and through sales of its Elixir insurance platform - as its partnering credentials with marquee players must surely stand it in good stead.