Luxoft: The “rising star” in banking IT services?
In 2015, I had a couple of talks with Luxoft, a software development and IT services provider. The company is headquartered in Switzerland but does business internationally. One of their focus industries is banking and capital markets. And one of their biggest clients is Deutsche Bank.
Has anybody heard of Luxoft? I have to admit that I have only had them on my radar since last year. Which is good because they are on the way to becoming a major IT services player for the banking industry.
From the talks I learned that Luxoft grew quite fast during the last few years. Established as recently as 2000, the company generated more than USD500m in the past financial year (ending March 2015) and expects strong growth in FY 2016 again. The headcount exceeds 10,000 employees. Most of them are located nearshore/offshore, mainly in the Ukraine, Russia, Poland and Romania, but also in the UK, USA, etc. Luxoft is also present in Germany and opened its second local office in Munich only recently.
But it was not the company's growth track that attracted my attention in the first place, but their focus on quite sophisticated, industry-specific services and solutions for banks and their ability to establish close relationships with some of the largest financial institutions in Europe. As mentioned, Deutsche Bank is a key client, and many providers know how demanding Deutsche Bank can be. Luxoft does not shy away from complex enquiries, which their clients have rewarded by giving them further business. With the Horizon Visualization Framework, Luxoft has its own banking-specific IP, and even if the company only generates a minor revenue share with it, it still can be considered an asset.
So, inspired by the BCG matrix, I would certainly position Luxoft as a rising star in IT services for banks and capital markets in 2015. And I am curious to see what will happen in 2016. IoT, for instance, is one of their push topics for 2016. Only recently, Luxoft co-announced a partnership with QNX Software Systems, a unit of troubled BlackBerry, to develop semiautonomous driving. It will certainly be interesting to follow up on this some time from now.