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Satyam still risky a year after fraud revealed: Forrester

Over a year after Indian outsourcer Satyam Computer Services reported a major financial fraud at the company, research firm Forrester still cautions customers doing business with it.

Satyam has a new owner, Tech Mahindra, which took over the management from the middle of last year.

But clients should keep an eye on Satyam's ongoing problems such as high attrition, cultural differences between the new management and old Satyam staffers, and risks arising from the unavailability of the company's audited financials, Forrester said in a report.

The company, which spent most of last year fighting for survival and defending its client base after the fraud broke out, did not invest in new technologies such as cloud-based delivery of services, Sudin Apte , a principal analyst at Forrester, said on Monday.

Many other analysts also believe that Satyam's turnaround is far from complete.

"Satyam does not figure for most clients planning to outsource to India," said an analyst on condition of anonymity, as his company does not publicly discuss individual providers. Satyam may still be losing customers, he added.

The company is typically not considered for new deals of a value of above US$100 million, Apte said. The customers that it has added recently are for small deals of $5 million to $7 million, he added. Most of these have been attracted by the basement prices offered by Satyam, which have lowered the company's margins, Apte said.