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SummaryThe coveted $100-million plus accounts are back in the IT sector in larger numbers. Tata Consultancy Services (TCS) and Infosys have shown a sharp rise in the number of such accounts.

The coveted $100-million plus accounts are back in the IT sector in larger numbers. Tata Consultancy Services (TCS) and Infosys have shown a sharp rise in the number of such accounts. At the end of the first quarter of FY14, Infosys’ $100-million plus customer accounts reached 15 against 12 a quarter ago. TCS added two more such clients taking its total tally to 19.

Indian IT companies have traditionally been strong in mining more business from the existing set of customers and this reflected in the high percentage of repeat business. At the end of the first quarter, the repeat business of Infosys stood at 99%, which shows that it was able to deepen its relationships with its clients.

Sid Pai, president, ISG, Asia Pacific, an outsourcing advisory firm, said, “Indian service providers have traditionally used ‘land and expand’ strategy with great effect.” This involves picking up a small account initially, before deepening the engagement and building it into a large deal.

Pradeep Mukherji, president and managing partner, Avasant, an IT-BPO advisory firm, said, “While TCS was better prepared for large wins as most of these deals were integrated contracts across services like IT infrastructure, data centre, cloud and BPO services, Infosys took advantage of having better play in newer areas like cloud, big data, retail and healthcare services.”

During the April-June stretch, TCS closed 10 large deals spanning across industry verticals as well as geographies. TCS pointed out that of the total 10 accounts added in the June quarter, seven were from North America. While announcing the Q1 earnings last week, TCS indicated that the deal pipeline is robust for services such as application development and maintenance (ADM), infrastructure management, consulting, enterprise services and products.

The rise in $100-million plus account also reflects the growing buoyancy and revival in the outsourcing market.

Pai said he expects the second half of this year to be stronger in terms of deal pipeline, adding that market share shifts across both new and renewal opportunities. “A large proportion of these deals are coming from the renewal market. We expect 886 renewal deals with value of over $21 billion to enter the marketplace this year,” he added.

A record 901 outsourcing contracts expired in 2012, an increase of 27% from the previous year. Expiring contracts were valued collectively at $25 billion in 2012. Mukherji felt that the uptick in large-value deals had more to do with the pent-up demand during the

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