Patni – making room in the mid-tier

(By Anthony Miller – Thursday 22nd October 2009 7:45am). I have to be honest. A couple of years ago, while I was still working ‘on the dark side’ as an equity analyst, I had all but written off India-based mid-tier SI Patni as something of a basket case. Founding management were all over the shop, attrition was rampant, and business was going downhill. But over the past year or so, and particularly since the arrival of ex-Mphasis CEO Jeya Kumar to the top job at Patni earlier this year, things have been getting rather better (see Patni getting back on track).

Indeed I spent most of yesterday with Patni’s EMEA head, Brian Stones, global COO, Manish Soman, and VP Germany, Georg Wagner. We also heard from a number of Patni’s marquee UK clients, notably Cable & Wireless, Bupa and Serco. The common thread in the customer presentations was that they selected Patni precisely because they were mid-tier, and therefore a better ‘size match’ to the customer. In our view, this is what will be one of the defining factors in the future opportunity for all mid-tier IT services firms as the industry giants gradually squeeze them out from large enterprise accounts. It’s the “we’re similar size to you, Mr Customer, so you’re business is more important to us than to (fill in the blanks...)”. That, or "we have a truly differentiated proposition" – which Patni does have in some service lines, but does a pretty good job of not telling anyone about them.

But for me, the most interesting story came from Serco, where Patni is its sole applications partner among a list of well known names of IT and BPO suppliers, including ‘our very own’ Computacenter and Phoenix. The relationship with Serco, which dates back to 2003, gives Patni indirect access to the UK public sector market which they would otherwise find near-nigh impossible to approach directly.

I will be writing more about all of this in the next issue of OffshoreViews.