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Virtusa Deepens its BFSI Testing Capabilities with Polaris Acquisition

Earlier this year Virtusa acquired Polaris, now rebranded as VirtusaPolaris. Polaris was a mid-sized (~$300m revenue) ADM pure-play (it had spun off its Intellect software product unit in 2014) specializing in BFSI sectors (95% of revenues, NelsonHall estimate), in particular treasury and capital markets (~52% of revenues in Q4 FY 2016, the period ending March 31, 2016), corporate banking (~19%) and retail banking (~16%).

Polaris doubled Virtusa’s revenues from BFSI sectors (of Virtusa’s $555m revenues in CY 2015, ~50% were from BFSI, ~38% from Communications & Technology, and ~11% from Media & Information). Polaris also brought to VirtusaPolaris a client base outside of the U.S. and Europe, mostly in Canada and Australia.

With Polaris, VirtusaPolaris now has a headcount of 19k and revenues of ~$850m.

Focusing on the testing business, Polaris’ testing organization had ~1.2k career testers embedded in the vertical delivery organizations, rather than being a horizontal practice (the model that Virtusa had adopted with its testing practice, and is now prevailing in the extended Virtusa). With this vertical-led approach, Polaris had developed sub-vertical domain expertise in particular in banking (e.g. payments & cards, corporate banking and treasury & capital markets) and also in P&C insurance. This complemented Virtusa’s own domain expertise in retail banking and asset & wealth management.

A feature of this sub-vertical domain knowledge is Polaris’ Reusable Test Repository (RTR), which Polaris had been developing systematically, module by module, with the intent of complementing test cases already owned by the client. RTR now has scale: the enlarged testing practice now has ~50k test cases in retail & corporate banking, and ~60k in capital & wealth management.

Polaris also brought in testing capabilities on the Intellect platform (for which VirtusaPolaris still provides software product testing services). Since the Intellect spin-off, Polaris had also developed testing capabilities around other COTS, notably Oracle Flexcube and Temenos T24. It also has capital market capabilities around Calypso, and around Murex.

Following the acquisition, VirtusaPolaris’ testing practice now has ~4k career testers, representing 23% of VirtusaPolaris’ headcount. It continues to focus on its core market on BFSI sectors (including healthcare and life science, and insurance) and the telecoms and media sectors. BFSI accounts for ~40% of software testing spending globally and still offers service portfolio expansion opportunities for VirtusaPolaris’ testing practice.

Looking ahead, VirtusaPolaris’ testing practice will continue to focus on BFSI, extending its domain knowledge and developing more accelerators. In addition and in common with the market trend, it will be introducing further accelerators and IPs, and focusing on DevOps and RPA, and also AI, for analyzing logs in servers and defect management tools, to aid root cause analysis.

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