India's Satyam looks to Malaysia for extra staff

Indian outsourcer is setting up a 2,000-seat software development facility in Malaysia

Indian outsourcer Satyam Computer Services is setting up a 2,000-seat software development facility in Malaysia that will service its customers worldwide.

The move is in line with the company's strategy to have services centers in multiple countries, both to address regional markets and to draw on local talent.

Although staff costs in Malaysia are higher than in India, capital costs are far lower because of the country's better infrastructure, Virender Aggarwal, director and senior vice president of Satyam’s operations in the Asia Pacific and Middle East, said on Thursday.

“We don’t have to invest in captive power generation for example”, he said, referring to India’s chronic power problems.

The center is in Cyberjaya, about 50 kilometers south of Kuala Lumpur, and will have 2,000 staff over the next four years, Satyam said. The company already has a delivery center in Kuala Lumpur with 150 staff. “We have done large-scale hiring here, and we found the quality of staff to be very good,” Aggarwal said.

As the cost of engineers and staff attrition rates in India go up, Satyam’s customers are keen on the company setting up operations in new locations, according to Aggarwal. Satyam can pick the best staff in Malaysia because few other companies have services operations there, he said. The company has enough of land in Cyberjaya to expand to a 5,000 seat facility, he added.

Satyam, of Hyderabad, announced last month that it is expanding its services operations in China to about 3,000 staff by 2008, from about 400 staff today. Besides addressing local and neighborhood markets like Japan and Hong Kong, the centers in China will service clients in North America.

Other Indian outsourcing companies, like Infosys Technologies and Wipro, are also setting up operations in other countries, particularly China and Eastern Europe, with an eye to the local and neighboring markets. Satyam is positioning China as an alternative offshore location to India, as its staff requirements go up, Raghavendra Tripathi, Satyam’s country head for China, said last month.

Satyam had about 35,000 staff at the end of September, and most of these are based in India.