The Indian Information Technology sector these days claims that it has finally attained enough maturity and expertise to rub shoulders with the global giants on the multimillion dollar deals. The Netherlands based ABN Amro Banks outsourcing contracts, it considered a watershed proves that local Information Technology companies still have not really moved beyond bagging bread crumbs compared to the global giants. In the biggest outsourcing deal ever to come out of Europe the ABN Amro Bank awarded a US$2.2 billion outsourcing contract to IBM and two Indian companies. The TCS and Infosys, the contract will not only save ABN Amro $335 million yearly, but also enable it to shed excess flab to the extent of the 3,200 jobs, 2000 of which could be transfered to the vendors in India with which it has signed the deal. The ABN Amro has also retained IBM, Accenture, TCS, Infosys and Patni Computers for the application development work, the monetary value of which has not been revealed.
If the client is satisfied, the deal size goes up a bit, but over an extended period, more than the total size of the deal and the number of the workers that ABN Amro gets to shed as a result of the deal, what is the important from the Indian point of the view is that the two local Information Technology biggies, TCS and Infosys have respectively got $260 million and $140 million of the total outsourcing order each being the largest single deal bagged by them individually. The Indian Information Technology companies generally get contracts worth $25-30 million. The client is satisfied, the deal size goes up a bit, but over an extended period.
The TCS will provide application support and the enhancement service for the bank’s operations in the Netherlands and Brazil as well as its private client business in the South America while the Infosys will provide application support for the banks operations in North America, the part of the Europe and new growth markets such as Hong Kong, Taiwan and Singapore. The deal reinforces that the fact that Indian Information Technology firms have arrived in the large direct offshoring deals. The CEOs of both TCS and Infosys have said it clearly indicates that large offshore players like them have a competitive business models to deliver large, global, multi-year contracts.
The local Information Technology sector rejoices on their latest feat, the question has the country’s outsourcing sector really been able to overcome the competition from the multinational Information Technology companies that are beginning to make a larger dent on the operations of established Indian Information Technology players. The IBM is still gets the lion’s share IBM has been entrusted to look after the entire information technology infrastructure of the bank for which it gets to keep $1.8 billion of the $2.2 billion contract.
REFERENCE:
http://www.pcworld.com/businesscenter/article/218444/indias_outsourcing_revenue_buoyant_says_nasscom.html
