The former president of IBM India and now the chairman and CEO of Steria India, an European IT firm?Mukesh Aghi masters the art of finding prospects out of challenging situations. Analysing the present scenario, when companies are shying away from even entering the European market, Aghi aspires to go deeper into it for a higher market share. Aghi took charge as president of IBM India in 1995 and was later shifted to Singapore, when he was asked to manage the strategic outsourcing for IBM. In his 22 years of experience across geographies, he served companies like Ariba and J.D.Edwards & Co, apart from IBM and right now is also a member of the Prime Ministers? IT Task Force. In an interaction with Diksha Dutta, he discusses his perspective on the IT services trends across geographies, his business strategies for the company and the game plan for Steria?s newly announced entrance into the Indian market. Excerpts:

Steria has a huge dependence on the European market. What is the reason for slow expansion into other geographies?

This is by design. We draw $2-2.5 billion revenue on an annual basis, which is less than 5% of the European market. So we still have a scope to go for more market share in the European environment. It comes naturally because we have been here for 41 years, we are trusted, there is more intimacy and the customers know us well. It is an easier transition for us to expand into Europe than stepping into the US market.

Also, the European market is a very fragmented market. The largest share is by IBM which is 11%. So, we will stay focused in Europe and try to go deeper. We feel that we are still a very small segment of the European market.

What opportunities do you see in the emerging markets for software solutions?

I believe there is a huge potential in the Indian market. We acquired Xansa in 2007 and then it made natural sense for us to go after the domestic market. In India, the BPO market is growing 32% year on year. The IT market is growing at 16%. We thought of leveraging this market, and thus we launched our plan in early part of this year.

Now we are looking at expanding in the rest of Asia Pacific by providing services from India . We do have a small presence in Singapore with around 60 -70 people. But the next big market for us is going to be Australia. This makes sense because when Europe is closed, Australia is opening. Or when Australia is shutting down, Europe is opening. So you can switch the same assets twice.

Also, Australia is very similar to UK?the police system, the health system, laws are very similar. In UK , we have revenues worth 600 million euro on an annual basis. So we can take the same software solutions, IP, BPO services and probably emulate in the Australian market.

Which verticals do you believe will drive the growth in India?

There are immense opportunities in this region. The Planning Commission goals for the next five years and their objective is phenomenal. They are investing a trillion dollar on the infrastructure. There is no other economy on the planet which is talking of such huge numbers in the next five years. All of this require some part of the IT solutions and we do very well in this segment.

For example, we have a solution in the airport environment. We have strong traffic management and tunnel security systems. We have very good shipping port management systems. India has issues with home land security. It also has threats of terrorism or crime.

We manage almost 40% of the UK police? backoffice work. Thus, our strength is biometrics and border security solutions.

In a nutshell, we have a solution based strategy in the Indian market. In the government sector, we are trying everything from going to the state level police, down to the central railway board. There are multiple areas that we are concentrating on. Even digitisation of land records and courts records looks like a big opportunity.

Is the European crisis big concern for you?

Well I think it is a crisis but also an opportunity. Lets take an example of UK, the region has decided to balance the budget. They are certain to brutally cut their budget by 25% in the next three years. So when you cut your budget, there is an impact on the services and the quality. We step in and say: we can offer you both?lower cost and better services. A few weeks ago, we won a UK deal for 230 million pounds?in providing backoffice services to a large chunk of the UK police. This is like privatisation of the police force. The same law applies in land registry. Thus I feel this an opportunity to provide better services at a lower cost by bringing more efficiency. I do not see it as a crisis.

Considering your business model, that offers IT and BPO services both, what is the split in terms of business?

Both the businesses?IT and BPO are equally important for us. BPO is 50% of our business. Our UK backoffice business is very strong. A lot of developments and uptake is happening in the continental Europe. It is interesting to see that even the Indian BPO market is on fire and is very attractive for us. The Indian customers are demanding world class solutions and services.

What future do you see of emerging technologies like the cloud and their impact on revenues?

I think the IT industry is trying to be innovative and efficient to customers by providing cloud as a service. The whole concept of cloud computing is going to revolutionalise the buying of hardware by customers, as you will pay only when you use. On the software side?the companies are not going to pay $5-10 million for the software and another $5-10 million for its implementation. It is going to be integrated and used as a service. That is why companies like Salesforce.com have taken up and companies like SAP have gone down. Consumers are getting more intelligent. So we believe that we can provide integrated services and customers do not need to buy hardware and software separately.