Infosys set to acquire local Telstra contractor

Infosys set to acquire local Telstra contractor

Indian services giant Infosys will acquire Melbourne-based developer of Telstra applications, Expert Information Services, the companies will announce this afternoon.

ARN learned of the deal from a source within Expert, and a company spokesperson said CEO Gary Ebeyan will make "a major announcement" at around 4.30pm today.

The spokesperson refused to offer any detail of the announcement, but refused to deny that Infosys will announce the acquisition of Expert.

An Infosys-Expert acquisition would have ramifications for both Telstra and Expert staff. Expert staff total around 350 people.

The source said the Telstra Sales Transaction Solution Front of House CRM development and support contract had been a driving factor in the acquisition.

Expert, which has held the contract for five years, was asked around the middle of this year to re-tender, the source said.

ARN believes the Telstra contract has been a prime factor in Infosys' interest in Expert.

"Infosys cannot win the tender unless it can demonstrate that it is making further investment in Australia which would deflect some of the criticism that might otherwise be generated," the source said.

Expert staff, particularly code-cutters, were concerned about what would happen to their jobs if employed by a company the size of Infosys, the source told ARN.

Unions, politicians and local services companies have previously criticised Telstra for deals with Indian companies Infosys and Satyam that have seen the loss of local IT jobs. Such a deal could deliver further cost reductions to Telstra's IT operations - the service provider would have the option of shipping more application development work offshore to the lower-cost sub-continent while still dealing with a local company.

Infosys were unavailable for comment.

Know your enemy

The chief executive of Expert Information Services, Gary Ebeyan, runs a company that is finding itself in competition with some large and formidable competitors for IT services and software.

Ebeyan has previously said that Australian companies need to embrace the offshore model to remain competitive.

In November 2002, the ABC interviewed Ebeyan alongside Infosys Australia manager, Ananda Rao, in support of finding new ways to be competitive.

"What we need to do is explore low-cost options, whether India or not, to utilise those low-cost opportunities and options for us, and couple that with a high-value capability that Australia has," said Ebeyan.

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