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January 6, 2004

Valtech plans offshore expansion drive

Jean-Yves Hardy, CEO of French IT consulting and services firm Valtech SA, is planning to expand his company's offshore development operation out of India during 2004 in response to growing demand for low-cost projects within the European market.

By CBR Staff Writer

Speaking to ComputerWire, Hardy said: We partnered with Hexaware in Chennai in August 2001, and have since set up our own operation where we employ 75 people. We expect this to grow to 150 by March and then 300 by the end of the year. Last November, Paris-based Valtech employed Dan Deville to head up the company’s offshore operation. Deville was formerly managing director of Wipro France.

In May 2003, Valtech formed a new alliance with Indian offshore provider Ivega Corp, in which it took an 80% stake, to create Valtech Ivega, a dedicated development center for Valtech clients based in Bangalore.

Hardy pointed out that Valtech will use the increased expansion of its offshore arm to provide services to the UK, French and German markets, where he claims Valtech’s front-end IT consulting and systems integration presence will give it the edge over its Indian competitors.

We use the offshore arm in projects where IT architecture teams in Europe subcontract work to India, he said. We tell the customer that doing this will make it cheaper, and easier and that they will not interface with the Indian team. This is good for the French and German markets.

Hardy said that established offshore providers like Tata Consultancy Services, Wipro, and Infosys Technologies will struggle to break into the continental European markets due to the language and cultural barriers.

Wipro is having very few opportunities here because the model can’t work in France or Germany. We do see Infosys as the most established in Europe, but no small Indian players can penetrate the market. The only answer is to acquire here, but they will do so at the expense of their profitability, he said.

This article is based on material originally produced by ComputerWire.

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