Posted by: Bruce Einhorn on July 26, 2007
What to make of the $250 million Infosys-Philips deal? Yesterday the Bangalore-based Infosys signed a BPO contract with Philips and bought three of the Dutch company’s outsourcing offices – in India as well as Poland and Thailand. Infosys investors seem to approve: The company’s stock rose 1.6% today, compared to a 0.2% drop in the Sensex index. Michael R. Guilbault, an analyst at Technology Business Research Inc. (a market research firm based in New Hampshire) was quick to send out an email praising the deal, complete with lots of bolds and underlines: “The Philips acquisition in Thailand increases Infosys BPO’s presence outside of India to another low-cost location that is not plagued with attrition and wage hyperinflation,” he wrote. “Lower attrition and slow wage inflation in both Poland and Thailand will boost margins by decreasing training and recruiting costs and keeping salary growth in check.”
The other big news from this deal involving the Philips BPO operation in Thailand: Thailand has a BPO industry! Who knew? When people talk about Asian alternatives to India as a services outsourcing center, they usually point to the Philippines and China. But Thailand? The country of course is a big tourist destination and Southeast Asia’s hub for automaking, but it’s not exactly a tech center. In the late 1990s, after collapse of the Asia bubble but before the collapse of the Internet bubble, I spoke to government officials in Bangkok who were upbeat about building a software industry in the country. Like many other dreams of Asian governments – think Hong Kong’s Cyber-Port – Thailand’s big tech plans didn’t quite live up to the hype. But with Infosys now operating in Bangkok, maybe there’s a chance that Thailand can at least grab a bit of the business that leaves India in search of cheaper locations.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.