Sri Lanka’s software revolution on English soil

Have you tried running a Google search on ‘information technology’? The results are fascinating: 80 pages of entries – and those are just the relevant ones.

What’s equally fascinating is how Sri Lanka’s IT industry has infiltrated the UK market, especially in the past five to seven years. From software architecture for large- to medium-sized companies to acquisitions by the London Stock exchange, Sri Lanka’s IT industry has seen it all.

The Sri Lankan IT industry could be divided into three main segments: the application product market, software services and off-shore development services/centres. Since the early 1990s, this industry has been steadily developing, snowballing in growth and sophistication, and making its mark in this still burgeoning global sphere.

There are several factors that make Sri Lanka a prime candidate for development in this industry. The country has impressive technical literacy statistics. A 2009 survey by the Department of Census and Statistics revealed that the 15 to 19 age group topped the technical literacy ratio with 47.6 per cent followed by the 20-24 age group 40.6 per cent. The least literate was the 60-69 age group with 2.8 per cent.

Overall technical literacy showed an appreciable growth from 16.1 per cent in 2006-2007 to 20.3 in 2009. Sri Lanka produces technical engineers of a very high calibre who can (and do) hold their own in many an international forum and develop and adopt new technologies.

A favourable environment created by the Government of Sri Lanka is another contributing factor. The President named 2009 the year of IT and English, giving a boost to two areas essential for progress today. A healthy investment climate for the establishment of off-shore development centres is another aspect of this support, helping Sri Lanka to make global strides in the IT industry.

In 2010, the Sri Lanka Association of Software and Service Companies (SLASSCOM) said in a statement it was focusing on providing financial and accounting services, investment research, engineering services and UK-based legal services. In an official statement released at the time, Ashique M. Ali, Director of SLASSCOM, said: “We are focusing on UK and Europe as one of our strategic markets to promote the Sri Lanka IT/BPO industry. The growing IT-BPO industry in Sri Lanka offers small and medium enterprises (SME) in UK access to a high quality talent pool.”

Several Sri Lankan companies have definitely made an impact, especially in the UK. One, in fact, is a member of the London Stock Exchange (LSE) Group. Founded in 1996, MillenniumIT started its journey as a systems integrator in Sri Lanka but soon moved into the field of application software design and development. A systems integration contract from the Colombo Stock Exchange (CSE) was reinterpreted as an opportunity to design and install a processing system for the exchange. This solution became the basis for MillenniumIT’s suite of capital markets software products that followed. Today, MillenniumIT is a multi-million-dollar company with offices and facilities in Sri Lanka, Boston, New Jersey, London and Mumbai.

MillenniumIT’s initial entry to the UK market was through a client who was based in

the US, with operations in the UK. Their first UK client, a market leader in trading fixed income securities, went live in October 2005.  Subsequently, the London Metal Exchange migrated to MillenniumIT technology in July 2009. Most recently, the London Stock Exchange’s UK cash markets migrated to the company’s ultra-low latency Millennium Exchange trading platform.

In September 2009, the LSE acquired MillenniumIT for US$ 30 million (£ 18 million). MillenniumIT now provides the LSE with a highly scalable and very low latency in-house developed trading system with multi-asset class functionality and quicker product speed to market.   

Tony Weeresinghe, CEO of MillenniumIT, said, “MillenniumIT’s innovative trading technology is used by exchange businesses around the world, including a number of blue-chip clients in the UK.  As the world’s leading international financial centre, with a long history of global trade, we have always found the UK a very open and welcoming place to do business.”

Another Sri Lankan-born company with offices in London and Berkshire is Virtusa Corporation. The NASDAQ listed organisation defines itself as a “global information technology (IT) services company providing IT consulting, technology and outsourcing services.” Also founded in 1996, the company is now headquartered in Massachusetts, with a client base including Global 2000 companies.

Virtusa launched its UK operation in July of 2004 with Adrian Holcombe as the Country Manager and Head of UK. Its first UK-based client was VISTA International (now Publishing Technology), which provides software solutions to the publishing industry.  Its UK client base today includes one of the UK’s leading insurance providers, a global leader in online CFD and spread betting services, a leading financial communications provider and the UK’s main operator of rail infrastructure. Its UK operations have grown from strength to strength, with more than 650 consultants from Virtusa’s Technology Centres being deployed to work with its largest client, based in the UK.

That the UK is one of the most attractive destinations for FDI into Europe is a fact that has clearly been recognised by Sri Lankan IT companies like MillenniumIT and Virtusa. The IT sector is one of the top areas for investment, given the strength of IT infrastructure, the openness to new technology and the opportunities for further development and innovation.

MillenniumIT and Virtusa are making their mark in the UK… When will other Sri Lankan companies join to taste similar success?