SA-based international technology giant Datatec announced its entry into the thriving Indian market with the acquisition of Inflow Technologies.
Datatec said yesterday it had bought a controlling stake of 50,01percent in the Indian IT distribution business for an undisclosed amount.
It was the group's first step into India which has the biggest call centre market and one of the biggest telecommunications industries in the world.
Jens Montana, Datatec group chief executive, called India a very large and fast growing market. "It offers strong prospects in our sector with lower costs of entry compared to many other developing markets and potentially higher returns and greater organic investment opportunities."
Montana said the investment marked an important step in Datatec's increasing exposure to emerging markets.
The group already has operations in more than 20 countries through its main subsidiaries Westcon, Logicalis and Analysis Mason.
In its 2008 annual report Datatec reported a 27percent increase in revenue to $4 billion (R33 billion).
Inflow achieved revenue of R264million in its latest financial year.
Byju Pillai, chief of Inflow Technologies, said: "This investment along with access to global best practices of Datatec in value added distribution gives us greater ability to grow our market share, make alliances with new technology vendors and expand into new geographies."
Frost & Sullivan IT services analyst Letticia Nkumbula said IT markets in emerging countries were growing faster than those in developed nations.
"Datatec has been looking at emerging markets as part of their business focus," she said. "The company's biggest growth was from Westcon with a contribution of around 70percent. Inflow operates in the same space of networking and security, so the investment there will create some significant growth."
Nkumbula said she expected Datatec to continue to acquire companies, particularly in Asia. "Competition is heating up in these areas, but opportunities are there regardless," she said.