After a period of pause, the IT services industry is experiencing a rise in multi-billion dollar deals. These deals involve taking over assets and personnel from customers with the objective of reducing costs. The top four Indian IT firms – TCS, Infosys, Wipro, and HCLTech – collectively secured deals worth nearly $20 billion in the June quarter, with TCS accounting for approximately half of that amount. Many of these deals are considered large in scale. The managements of these top IT companies have highlighted several mega deals in recent weeks.
Infosys has expanded its partnership with global telecom company Liberty Global in a deal worth 1.5 billion euros for the initial five-year term, and up to 2.3 billion euros if the contract extends to eight years. The collaboration is expected to result in more than 100 million euros in annual savings for Liberty Global. Additionally, over 400 Liberty Global employees will be joining Infosys.
Before the Liberty deal, Infosys secured a contract from an existing strategic client to provide AI and automation-led development, modernization, and maintenance services. The total client spend over the next five years is estimated to be around $2 billion.
TCS has won a contract from Nest, the UK’s largest workplace pension scheme, which helped offset concerns arising from the company’s recent loss of part of a deal with Transamerica worth over $2 billion. The Nest contract is valued at 840 million pounds for an initial period of 10 years, with the option to extend for an additional eight years.
HCLTech also recently secured a $2.1 billion deal with Verizon Business, which includes the deployment of managed network services for enterprise customers. Prominent deals like these are beneficial for companies as they provide long-term customer commitment. However, analysts note that decision-making timelines are still longer than usual due to global macroeconomic concerns, and it remains uncertain how much revenue from these deals will be realized in the immediate future.
