Data from HFS Research shows Infosys won a $3.2 billion deal from Daimler and $1.5 billion from Vanguard. TCS Won a $1.5 billion deal from US retail and wholesale pharmacy major Walgreens Boots Alliance (WBA), and most recently a $2.3 billion deal from US consumer research firm Nielsen. Wipro Won a $700 million contract from German wholesaler Metro.
Phil Fersh, CEO of HFS Research, said consolidation deals are typically contract renewals where services are consolidated under a smaller number of providers. Many customers are moving away from a long tail of service providers to accelerate service offerings and responsiveness, moreover relying on IT partners who can extract dollars from the run-the-business side, and convert cost savings into new ones. in digital initiatives.
Mega deals are often margin weak initially, but Indian IT firms have cost optimization and operational levers to make it margin boosting over the long tenure of the deal.
TCS is said to have further solidified its business in MetLife recently, garnering a big pie from other IT companies, which also hold a portion of Cognizant’s business. When TOI contacted Cognizant, it said, “MetLife remains a valuable, long-standing Cognizant client.”
TCS CEO Rajesh gopinathan Commentary for the June quarter said it won two $400 million deals in the quarter, and both deals largely resulted from a consolidation exercise. Both deals have a very strong transformation component, and an equally strong customization component. Gopinathan recently told TOI in an interview that the latter is feeding the investment needed for the former.
TCS’s Walgreens deal spans ten years. The company is implementing a new IT operating model that will enable the US retailer to accelerate its digitization programme. Wipro’s five-year Metro deal was CEO Thierry Delaporte’s biggest ever, and analysts believe it has the potential to go up to $1 billion.