newsmakers CSA Holdings has come a long way since its beginnings as an integrator of
multi-vendor systems. Started in 1970, its aim was to become succcessful by
integrating for its customers servers from Sun Microsystems, networks from
Cisco Systems and storage from EMC.
It achieved this, and in 1991 became the
first IT services company to offer shares on the Singapore bourse. Further
success came when it listed two of its strongest country subsidiaries on the
Hong Kong and Malaysia stock exchanges respectively in 1997.
Much of CSA Holding's success against its bigger rivals has come from the backbone
of the three founders--Johnny Moo, Sunny Tan and Seow Chuan Bin. "We not
only have to beat the US-based companies in the region but government-linked
companies that were coming up left, right and center," Group Managing
Director Johhny Moo recalls. "We did right by going regional early because
we became more mobile than the rest."
It hasn't been all plain sailing, admits Moo, 62. For example, its
operations in the US have been a disappointment. CSA's initial success with
software tools may have been a first in Singapore then, but it couldn't hold
up against better-marketed automation software in the US market. The
marketing dollars required were greatly under-estimated.
Unlike India's renowned Infosys and Wipro, which had their IPOs in the US,
and went after the US market in a big way with the dollars generated, CSA
struggled with limited funds. It sought partners and acquired companies
instead. "But we failed miserably," said Moo, "and of all of our ventures,
only one made money for us and that was the smallest of our investments."
In February 1999, CSA surprised the market by announcing that CSC Computer
Sciences International Inc, a wholly-owned subsidiary of US-based Computer
Sciences Corporation (CSC) had acquired a major controlling interest in the
company. For the 12 months ended March 31 2001, CSC had revenues of US$10.5
billion--26 times CSA's 2000 sales of US$394 million.
Question: What is CSC's role in CSA today?
Johnny Moo: With its global multi-year contracts with large multinationals, CSC has
something which we felt was crucial to CSA's next era of business--recurring
revenue streams from outsourcing.
Our initial focus is to build essential physical infrastructure such as call
centers and data centers operating round the clock in Hong Kong, Malaysia
and Singapore. We then implement CSC's global best practices and deliver
services for CSC global clients from these centers. Our regional customers
could also benefit from these global practices as they expand their
Why is CSA attracted to the outsourcing business?
Outsourcing contracts are generally signed for a long term, and with
more reasonable margins than the systems integration business.
Outsourcing allows companies to focus on their core business, allowing them
to speed up their market reaction time, and gives them access to other
companies' branding/marketing/product development expertise.
For the past 30 years, we have built a solid base of clients with our
systems integration projects. But we were hit by the slowdown in tech
spending like everyone else. To build a long-term IT services strategy, we
have to get into the outsourcing business.
Also, I saw how the Singapore government sold some of its own IT services
arm to Singtel, and I realized that is a viable business model with a
long-term payback. I then set out to plug the holes in CSA's business and
seek out the industry's biggest independent player--CSC was the obvious
choice. They have demonstrated their prowess over the past 42 years and we
will learn from them.
The outsourcing market in the world will not happen like a big bang. It will
grow slowly as companies spin off their non-core operations.
Why didn't CSA go directly to the global clients?
In everything you do, you must know your limitations. We are successful
in Asia but not in the US. The US is the biggest economy in the world and
most of the global companies which are headquartered there--CSC has done
business with them.
On the other hand, we have a strong presence in Asia. It made sense for us
to partner each other. Currently, CSA has extensive operations in eight
Asian countries, employing approximately 2,600 employees.
After working for so many years, particularly in this industry, is there
anything that surprises you anymore?
Not too long ago in Sydney, a young geo-physicist wrote a mathematical
program that takes away the drudgery of manually calculating landscape
contours for oil exploration. He finally came up with a mathematical model
that can process the raw data collected from the field into a meaningful
When he submitted the 20-page proposal to his bosses, it somehow
found its way to the desk of the editor of Geo-Prospecting magazine and the
full formula was revealed to the whole industry. That geo-physicist was me
in my first job after graduation, and I was really thrilled then. I thought
that I was going to become famous.
Five years after I left that job, a
Professor in Melbourne University called to tell me that his graduate
students were doing research on exactly the same problem and he wanted to
question some of my assumptions. As much as I would like to help him, I told
him that after reading my paper, I couldn't understand the what and whys of
the formula written five years before!
Last month, at a pub where executives from the company usually go after
office hours to discuss things over a couple of beers, I managed to stay on
for several rounds of shooting pool with a couple of chaps from other
companies. When we were introduced, they mentioned that they knew the
company but not my name. Instead, they pointed to Sunny Tan as the boss they
recognized. That gave me a great relief and a certain thrill that the
succession of the company's business is unquestionably smooth and almost
So the future of the company is in good hands. What keeps you busy nowadays?
My association with young start-ups keeps me current with technology and
applications, so if you ask me about storage, I can tell you how it all
started from server-attached disks and how it has evolved to
network-attached storage and storage array network today because I still
enjoy learning. When I look at how a company like Brocade can challenge
incumbents like EMC and IBM, I'm really amazed. I may not be able to write
programs anymore, but I can certainly evaluate a business plan for such new
technology and application.
What is your long term view of Singapore's competitiveness?
I have a theory that there are two types of people in the world:
Immigrants and non-immigrants.
Immigrants of the world have generally done well. Those who migrated from
their countries of birth and set up homes in other countries have uprooted
themselves and have carved niches in their adopted societies. But more
importantly, they created something out of nothing--driven by sheer
determination not only to survive but to lay the foundation for future
It may sound like a sweeping statement, but societies which are stagnant
lack this immigrant instinct.
What about those whose forefathers were immigrants?
Even those whose forefathers were immigrants, after, say, the third
generation, they turn from immigrant to non-immigrant because they have
become comfortable with the adopted environment.
In today's global economy, where mobility is a given, once a society feels
comfortable, it will become complacent and lose its competitive edge. I have
seen it in some companies, where the immigrants usually run very fast just
to keep their place in the companies while the non-immigrants could be
A country like Singapore needs to create an environment that will bring in
the next generation of highly-mobile people who have the confidence and
willingness to go places and make a difference. Unless they take on the
entrepreneurial spirit of the first immigrant, they could fail.
If we want to be competitive globally, we have to be very innovative and
mobile and continue to have these survival instincts. And we will need to
work with others that can complement us and form alliances and partnerships
to go after bigger markets.