HiSoft charts Asia South growth from Singapore
By Khoo Boo Leong 07-May-2012
Dalian-based HiSoft Technology International Limited, a provider of outsourced IT and R&D services, has gained International Headquarters (IHQ) status in Singapore. The base will be the company's springboard for expansion into the ASEAN and Oceania markets, the region it calls Asia South.
"Last year, ASEAN made up 5% of our revenues with the main bulk of the business from Singapore," said Loh Tiak Koon, CEO of HiSoft. "Over the next 2 to 3 years, we aspire to grow Asia South to 10% of our business. We should increase the headcount in the region to 1,500 people in 3 years."
"International financial services companies make up one-third of our business," said Liu Chu Tzer, managing director of HiSoft Singapore Pte Ltd. "The other segment is the technology area with household names like the HPs, Microsofts and Googles of the world. Together, those segments make up 80% of our business. In China, we are also focused on the Internet and telecom industries."
Meanwhile, demand for data center capacity in Singapore is expected to grow 50% from 2.4 million square feet in 2010 to 3.6 million square feet in 2015, according to Broadgroup, a data center consulting practice.
"This reflects surging demand from companies such as Savvis and Equinix, who have already located their regional cloud computing data centers in Singapore for enterprise customers," said Tan Choon Shian, deputy managing director of the Singapore Economic Development Board at the investiture ceremony for HiSoft's headquarters.
More recently, Google invested US$120 million to build an environmentally friendly data center to serve the Asia Pacific region from Singapore while NTT Communications Corp opened its S$190 million tier III+ data center to serve companies in the financial, IT and manufacturing sectors. Companies such as HP and IBM have also set up cloud labs for customers across different industry verticals.
"Our cloud technologies and assets are around provisioning, allowing infrastructure-intensive cloud providers to enable their services to the end user and making it simple to use," said Liu. "Essentially, it is deemed as platform-as-a-service."
Strategically, HiSoft will be close to its key technology and business partners that are among the 7,000 MNCs operating in Singapore. More than 60% of them have located their regional headquarters there.
HiSoft has invested US$15 million in the last three years to build up various facilities and to acquire assets. It currently employs 500 staff locally to provide IT consulting and technology services in business applications development, quality assurance and testing as well as R&D related hardware and software applications development and testing.
Specifically, these include solutions template and cloud computing middleware development. An example of HiSoft's cloud services is its cloud middleware that coordinates the provisioning of cloud infrastructure requirements or virtual data center resources such as virtual machine, storage and network.
HiSoft's international footprint covers 20 regional offices and delivery centers in China, Japan, Spain, the US and Singapore. Net revenues were US$219 million for its fiscal year ended December 31, 2011, up 49.4% from a year ago.
With its IHQ status, HiSoft will enjoy concessionary tax rates of 15% or lower on incremental qualifying income from abroad for three years. If the service provider continues to satisfy the IHQ minimum requirements by the third year, it will enjoy concessionary tax rates for an additional 2 years on qualifying income.