Ayn Rand’s Fountainhead has a new protagonist in Mexican company Softtek. The IT and business-process services provider has built a virtual bridge across the Pacific, connecting Latin America with China by acquiring Chinese IT service provider I.T. United.
While the American and Indian IT companies have been setting up shop, through acquisitions or on their own, across the world, it is rare to find a Mexican company crossing the shores to go to Asia. In fact, Softtek has plans to acquire two more companies in China — watch this space for the news.
So, what prompted Softtek to go to China? Softtek Near Shore Services’ CEO Beni Lopez discussed the company’s strategy behind the move with Global Services.
One, Softtek will get a presence in the four Chinese cities of Beijing, Shanghai, Xiamen and Xi’an.
Two, it will give Softtek readymade skills and established capabilities to cater to the rapidly growing Chinese market.
Three, the “I.T. United + Softtek” entity will give Softtek a global proximity advantage.
The new company will operate under the name “I.T. United, a Softtek Company,” and Cyrill Eltschinger, Founder and CEO of I.T. United will continue in his position.
“I.T. United has a reputable brand. We want make sure that both I.T. United’s clients and employees feel comfortable about the transition,” says Lopez.
The China center will be Softtek’s eighth global delivery center; it already has four centers in Mexico, two centers in Brazil and one in Spain. The acquisition has taken the global employee strength of Softtek to 6,000 from 5,000 before the deal. Though these staff numbers are very small compared to the scale of even some of the smaller American and Indian companies, it is a big move for a Latin American company where the typical size of an IT services company hovers at a few thousand.
Interestingly, both Softtek and I.T. United are Global Services 100 companies, Global Services’ annual listing of the top 100 IT and BPO services provider across the world. While I.T. United came in fourth among the “Top 10 Leaders in the Emerging Asian Market,” Softtek was the leader in the “South of the Border” category in the 2007 listing. The outsourcing industry should now expect a leader coming out of this new Mexican-Chinese combo.
Gartner has also positioned Softtek in the “niche players” quadrant in its recently published Magic Quadrant for North American Offshore Application Services, 2007. Softtek’s CEO and President Blanca Treviño sees it as a recognition of the company’s successful nearshore delivery, strong process maturity and governance across their global delivery centers, and proven client relationship model.
