Anil Ready To Take On Tech Titans

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Source - http://www.telegraphindia.com/1080102/jsp/...ory_8733988.jsp

Anil ready to take on tech titans

Mumbai, Jan. 1: Infosys, Wipro and TCS had better watch out: Anil Ambani is getting ready to challenge their domination of the infotech industry.

Ambani is preparing to take on the technology titans with a cash chest of $2 billion (roughly Rs 8,000 crore) which he plans to invest in an infotech venture that is being tentatively labelled as Tech Reliance.

Initially, Tech Reliance will provide IT infrastructure management services to Ambani’s telecom, energy, utilities, financial services and entertainment businesses. Sources say the company hopes to emerge as one of the top five technology firms in the country once it starts offering IT consulting services as well.

Telecom service is fast emerging as one of the biggest moneyspinners for technology giants. For instance, the telecom vertical of Infosys earned $258 million in revenues in the six months ended September 30 out of the overall revenues of $1.41 billion — accounting for just over 18 per cent of its revenue pie. It was the second-biggest revenue earner for Infosys after financial services.

Reliance ADAG chairman Anil Ambani has been watching the IT space for over a year now and is now ready to make his move. Ambani’s push into IT is part of the group’s drive to unlock value and derive synergies from its various companies.

In recent times, telecom companies have started outsourcing their IT operations to trim costs and focus on their core operations.

In December, Vodafone outsourced all its IT operations, with the exception of network service platforms, to IBM for five years. Earlier, Bharti Tele-Ventures had outsourced its software, hardware and IT requirements to IBM for about $700 million for a 10-year period.

Market observers said Tech Reliance would do well if it remained “domestically oriented”.

“As an IT infrastructure management service, they should do very well as they will have an assured market and an anchor customer in Reliance itself. It will help them reduce their costs and be more focused on the IT playfield. As the company gathers experience, it can foray into managing other networks,” said Dipen Shah, IT analyst at Kotak Securities.

Tech Reliance will function out of the four to five development centres that are being set up across the country. Two of these will be located in Mumbai and Calcutta.

The Calcutta centre will be housed at the proposed 50-acre Dhirubhai Ambani Knowledge City at Kalyani in Nadia district.

According to Anil Ambani’s key aides, the group will give priority to infotech this year.

The Tech Reliance initiative is expected to lead the next phase of growth for the group.

Ambani has handpicked a team of IT professionals to lead this initiative. Employees working with Reliance ADAG are also part of this team. The core group of 15 members will draw up the road map for Tech Reliance.

The group is also headhunting senior management employees from leading IT companies to lead various functions at Tech Reliance.

A Reliance spokesperson refused to comment on the development. He, however, said, “The group continuously explores new avenues for growth and we seek to enhance value for our stakeholders”.

Group company Reliance Communications recently announced plans to offer high-end remote network management solutions to global telecom players and tied up with the US-based GlassHouse for the purpose. The company also plans to ride on the 65,000km undersea cable link that is managed by group subsidiary FLAG Telecom, a leading provider of international network transport and data services.