Today in Tech: TechM-MSat's $5 Billion Ambition; IBM buys Kenexa; Lenovo to buy HCL Infosystems?

Tech Mahindra - Mahindra Satyam's $5 billion ambition Business Standard has a story on how CP Gurnani, Mahindra Satyam's CEO and Tech Mahindra's MD, plans to double the combined revenues of the firms to 5 billion by 2015. (A merger between the two is on the anvil, and it's likely that Gurnani will head the merged firm).
On paper, the plan looks good, covering all bases. It will strengthen its existing business - mine the existing clients, target new ones, aim for bigger deals. It will focus on new technologies - products and platform (similar to Infosys 3.0). Some of its growth will come from M&A - 8-10% of the $5billion. And finally, it will invest in and incubate start-ups (It has tied up with Soft Bank)

Gurnani lists volatility in global economy and ability to have local talent as key challenges. I would add the following to the list. It has to do with execution. Execution of a well thought out strategy is tough for any business, but for Mahindra, it will be tougher. Its margins are the lowest among its peers. It doesn't have the kind of cushion Infosys has in terms of cash reserves. For Infosys it's $4 billion, and for the combined Mahindra firms it's about $500 million. It's only slowly recovering from the blow Satyam got from its promoter. Even if the name Satyam is shed from the merged firm, there will be hangover.

More than articulation of strategy, it's the signs of successful execution that everyone will be looking for.

IBM buys Kenexa for $1.3 billion

IBM's acquisition of Kenexa is yet another indicator of the big change that's happening in the market - the shift from enterprise to cloud. Kenexa makes web-based software that helps companies such as Starbucks, GE, Walmart and Verizon recruit new workers and manage them with a slew of online tools. In making this acquisition, IBM has followed SAP and Oracle. Last December, SAP bought SuccessFactors for $3.4 billion. This February, Oracle bought Taleo for $1.9 billion. These are big acquisitions - not giants buying start-ups. It shows the speed of cloud adoption. Kenexa made $283 million in 2011, a 44% jump from the previous year.

Lenovo to buy HCL Infosystems: FC
Financial Chronicle says  that Lenovo is to buy out HCL Infosystems (HCLI), an IT hardware and systems integration company, from its promoters. It seems to make sense for HCL Corp, which holds over 48% stake in HCLI, to let it go. HCLI's margins are low: Last year, HCLI reported a net profit of Rs 72 crore on revenues of Rs 10,840 crore (Its financial year ends in June). In its hardware business, almost all of its revenues come from a single geography - India - where its market share is low - less than 5%. Lenovo, on the other hand, can use HCL Infosystem's service/manufacturing capabilities. Neither company confirmed the development.

Also of interest

• HCL in search of its next big idea: TOI
• With Apple V. Samsung Verdict, Innovation Wins: Fast Company
• Samsung to launch see-through displays next month: BGR
• Active in Cloud, Amazon Reshapes Computing: NYTimes
• I.B.M. Mainframe Evolves to Serve the Digital World: NYTimes
• Apple Lists Eight Samsung Products It Wants Banned: AP
• How (and why) you should enable two-step verification on your Dropbox account: NBC

The thoughts and opinions shared here are of the author.