Satyam expands footprint in Malaysia

IT services giant to build its first large-scale facility outside India to cater to a wide range of customers worldwide.

SINGAPORE--Satyam Computer Services unveiled Thursday plans to build the company's large-scale development center in Asia, the first outside its home country.

Based in Cyberjaya in Putrajaya, the new campus--which is expected to be completed by mid-2008--will have an initial 2,000 square-feet facility and is likely to expand up to 5000 square feet over the next few years, Virender Aggarwal, Satyam Computer Services' head of the Asia-Pacific, Middle East, India and Africa, told ZDNet Asia in a phone interview.

Aggarwal also said that 500 people will be added to the current staff strength of 150 over the next six to seven months, with plans to expand up to 2,000 people when the new Cyberjaya facility is built a year and half later.

To be built at an initial investment cost of under US$2 million, the Cyberjaya facility will cater not only to the Malaysian market but also meet "software export and global customers' requirements". The center will also supplement Satyam's operations in India, Aggarwal added.

This announcement follows closely the launch of the company's development center in Guangzhou, China, in November, as well as the global business continuity and disaster recovery center in Singapore in September this year.

According to Aggarwal, the Singapore campus has 350 workers and serves mainly customers in the republic, while the Guangzhou campus has 50 workers and caters mostly to Hong Kong customers, global MNCs (multinational corporation) as well as Japanese MNCs.

Location matters
Key considerations for locating the center in Malaysia include the country's competitive costs, good infrastructure and strong government support, Aggarwal said.

"Malaysia as a country offers a lot of first world facilities" Aggarwal noted. He added that the country's costs are "closer to third world costs" and infrastructure is "very close to first world".

Other factors such as "rising wages in India, China and other countries have also made Malaysia look more attractive", he said.

"Apart from the wages, overall cost of doing business in Malaysia is very good," Aggarwal said.

Although the hiring costs in Malaysia are still higher than "India and China by 50 to 60 percent, other considerations such as the strong support from the Malaysian government make the country "attractive", even though the "initial salary costs will look higher".

"Despite the higher costs, the cost of putting up a center, the cost of running it, and the first world efficiency…make it an attractive destination," Aggarwal noted.

Malaysia is eyeing the outsourcing throne and is hoping to upstage outsourcing favorite India. In July, the Malaysian government organized a preview of its new IT center--MSC (Multimedia Super Corridor) Cyberport Johor--in the state of Johor, in a bid to lure IT companies to establish operations in the country.