Evaluating Satyam's New Avatar — Mahindra Satyam

With Tech Mahindra emerging as the winning bidder, uncertainty about Satyam's ownership ends. While investigation of financial irregularities and criminal proceedings against the founder will continue for several years to come, the company moves on to its new form — Mahindra Satyam. Like any other acquisition, the road ahead for the reborn company is full of challenges. Its new management is preparing to stop the client exodus and arrest any further losses. Forrester's analysis shows that Mahindra Satyam will calm its business to keep revenues in the range of US$900 million to US$1.1 billion and create stability in its employees, especially client-facing and billable resources. But sourcing professionals at Satyam's client organizations should demand much more visibility about the acquisition and renegotiate rates and payment terms linked to extended service levels about output, productivity, and key personnel continuity.