Outsourcing: Sanjay Dhawan, CEO of Symphony Services (Part 5)

Sramana Mitra: You can set up a 1,000-person operation in a certain region, especially if you run your own university. I don’t think that should be a problem.

San Dhawan: Right.

SM: There are two other topics I want to explore. One is, how do you go from a $200 million to a $1 billion company, assuming that’s your objective?

SD: Yes. We have a midpoint there. Right now we’re focused on $500 million. I was brought in as a new CEO about a year ago, and I was given three mandates by the board. The first mandate was to organically grow our business ahead of our competition. What that means is growing north of 20% growth rate. We think we’ll achieve that in 2011 and beyond.

The second mandate was to have an inorganic growth strategy as well and double the size of the company and cross $500 million in the next two to three years. We have done some acquisitions in the past, which were smaller acquisitions. But we’re focused, as a management team right now, on looking at some larger mergers, which would do two things for us. Number one, increase the scale of our operations and bring in some of the global locations that we talked about earlier. The third mandate given to me by the board was to take the company IPO and become a public company. We think we’ll be doing that next year as well.

SM: So, companies like Globant and ICT and those kinds of companies are on your radar for acquisitions?

SD: Yes. We want to do a scale acquisition. That would be companies with $150 million to $200 million plus in revenue, and global locations. Many of those companies would be on our radar.

SM: What is the organic growth strategy? What’s going on in terms of internal operational growth.

SD: There we’re focused on the trend that I just mentioned around cloud, SaaS and mobility. We have spent our R&D dollars over the last two years or so – three years – on building tools and capabilities in those areas. We’re engaging with our customers around acquiring organic growth businesses with our existing and new customers.

SM: My final set of questions concerns entrepreneurship. Based on what’s going on in the oursourcing industry in general and outsourced product development in particular where do you see opportunities for new entrepreneurs to start companies?

SD: On the services side, it would be in niche areas. In the broader OPD space, it’s well serviced by companies like us and a bunch of other names that you mentioned … and others. So, I wouldn’t advise entrepreneurs to start a brand new OPD company at this stage.

SM: Let me push back on that. I’ll tell you exactly why. I run the One Million by One Million Initiative, and we have companies that are very early stage companies. These are companies that you would not consider developing products for because their needs are small. The size of the deals is much smaller. But within One Million by One Million, I see a lot of services companies from India that is doing product development work for other companies within the community. The reason I’m pushing back on your point is that I think that is an area where there is plenty of opportunity for companies to play, because nobody really works with these little companies.

SD: Well, my view would be to focus on certain niche areas. For example, you’ll see some small OPD companies, but very focused on Android-based product development and bringing the Red Hat model to the Android space. That’s exactly what I meant by niche areas where [a company] still can be considered as an OPD company. But [it] would not focus on the normal OPD life cycles and technologies. [It’ll] focus on a niche space and start with that in mind.

SM: Yes and no. You can do vertical niches. I think this is how Globant came into market and created a different shaded positioning. They came after you guys started, you and Persistent and Global Logic. They managed to get on the bandwagon of a new technology, this mobile, gaming, and social application area. They have that niche expertise, but other than that, they follow the entire OPD life cycle. They do exactly what you guys do.

SD: Yes. They have achieved a scale now.

This segment is part 5 in the series : Outsourcing: Sanjay Dhawan, CEO of Symphony Services
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