Ashok Vemuri, new president and CEO of California-headquartered but India-centric IT services firm iGate, is putting his stamp on the firm with the announcement at a recent investor conference that they will exit Brazil, South Africa and Dubai to concentrate on key Western markets. Vemuri joined iGate in September from Infosys (see here), since which time a number of top level executives have reportedly left the business. Vemuri also indicated that iGate would not undertake again an acquisition the size of Patni, in effect, a reverse take-over.
Both decisions make sense. The Patni acquisition was risky of course, but iGate needed scale. It still does, but iGate is now of a size (c. $1.1bn revenue run rate) where it could consider acquiring other mid-tier players as the larger party. Meanwhile, iGate is still too small to cover outlying geographies successfully. Brazil in particular is a vexatious market for all India-based players – with the possible exception of Tech Mahindra – as the offshore delivery model generally doesn’t work (see BrazilViews).
iGate has been doing pretty well of late (see iGate accelerates) and is scoring interesting wins (see Good outcome for iGATE and Markit). Of course, these are more the legacy of prior management but they give Vemuri a sound base to work from.