Earlier this year, MphasiS, the bangalore based software services player, unveiled its new logo with great fanfare. The logo had a new visual appeal, with the subtext ‘Unleash the Next’, in place of ‘An HP Company’ earlier. Speaking on the occasion, Ganesh Ayyar, the affable CEO of MphasiS, said the bigger purpose behind the rebranding exercise was to convey the company’s focus on ‘new age solutions’ in the digital marketplace and cloud. On a prouder note, he announced that MphasiS had achieved the billion-dollar mark in revenues, setting the stage for its next phase of growth.
Then things started going downhill. HP started squeezing MphasiS’s margins. As its single-largest customer and its majority owner, HP had a disproportionate say in what MphasiS did and how. Sanchit Vir Gogia, chief analyst and CEO of IT outsourcing advisory firm Greyhound Research, says: “HP has completely mismanaged MphasiS. In global deals where MphasiS is a part of its offering, HP structures them in such a way that MphasiS gets squeezed. HP’s internal business which it gives to MphasiS are at low margins.”
According to Gogia, “HP unfortunately has not been a good steward of the company. The more MphasiS diversifies its business away from HP, the better it will be for the company and its minority shareholders. All this would not have mattered if MphasiS was a mere inhouse captive of HP, but the interests of minority shareholders needs to be protected.”
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