Paul Hermelin (CEO, Capgemini) : "We expect to join the top 10 in the US soon"

Antoine Crochet-Damais on Tuesday June 28, 2011 09:00:57 AM

Paul Hermelin (CEO, Capgemini) :

Interview of Paul Hermelin, Chief executive officer (CEO) of Capgemini.
Capgemini is the first European software engineering company.

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Are there some differences between your activities in Europe and North America ?

There are obviously some differences. In the US, we are seventeenth. By comparison, we are number one in France or in Holland. That's doesn't mean we are behind in all segments of the US market. On ERP integration, for instance on SAP or Oracle, we are probably number three or number four. We never are number one or number two, but we are a significant player in this area.

In the US, we are a multi-segment player. But, we are not a general player. More generally, we are very good on retail, energy, utilities and telecoms.

Our strategy is to increase our presence in the US with selective acquisitions and to add new domains of excellence. So, we have just acquired a company in business intelligence, and we will invest further there. We also bought also a small company and we intend to be a significant player in mobility for SAP. We expect to join the top 10 soon, by adding domains of excellence.

In France we do everything, in US we can't. So, we have to be focused on domains of excellence and have some priority.

Why is Brazil so important for you ?

I don't think the growth will come from Europe. It will be an area of modest growth. So we rebalance our portfolio with what we call fast growing economies. People instantly think about China or India. But, we should think that Latin America is supposed to grow rapidly.

We paid attention to the Brazilian market. We had the opportunity to buy the biggest IT company in Brazil : CPM Braxis. The interesting thing is that we bought 55% of this entity, and the owners kept 45%. So, they all remain involved and support us during this transition. Our first results are very solid. It's a market that is quite buoyant, so we intend to grow there.

What is unique about our positioning in Brazil is that we are very focused on infrastructure services, less than on applications. The group is usually better on applications. So, we will try to grow this activity organically.

Does India remain a priority in offshore areas ?

What is unique about India is the volume of young graduates every year. So today in India, with now close to 35 000 people, we can grow more than 30% a year and find the talents we need. This is pretty unique. We built a small platform in Morocco. We will get close to 500 people, and we are not sure we can grow beyond that, because of the scarcity of graduates.

In addition to India, we would like to find the same abundance of skills in other areas. Everybody can think of China of course, but there could be other Asian countries. We settle in Vietnam, but there are not that many graduates there, but we will grow there. We also try to grow in Argentina, because this country benefits from being in a time zone that is somewhat convenient for our US customers.

So today, India has no competitor. About China, we are considering some options. We have some assets there, but the use of English is minor in China. Young Chinese students learn English when they are in universities. But as soon as they get out, there is nothing that make them practice their English. They tend to forget English, and we need people who practice English.