Tata Consultancy Services must surely be wondering what all this talk of slowdown is about. Having won a $2.2 billion (billion, not million my friends) outsourcing contract, India?s largest IT exporter has punched a big hole in the slowdown-in-IT theory. The 15-year order from British financial services company Friends Life has been a jaw dropping one. Infosys and Wipro?eat your heart out.
Indian IT firms have been talking incessantly about a break in business momentum spurred by the Eurozone crisis and the slowdown in US, but the TCS deal should shut everyone up for a while. This is TCS? biggest ever deal since it pocketed a $2.5 billion contract from Citigroup, back in 2008. The deal is in line with TCS? strategy of raising revenues non-linearly. As part of the contract, it will offer technology infrastructure and services to the clients of Friends Life, which is primarily a provider of pension, investment and insurance services.
TCS had first entered the life insurance and pension segment in 2005, with a 486 million pound outsourcing deal with UK based Pearl Group. Since it has been a very profitable domain for them. With this contract, TCS will now manage some eight million policies in UK using the same platform, increasing the company?s share of revenues earned without having to hire more employees. Nearly 1,900 employees of Friends Life will get transferred to TCS? payroll as part of this transaction. Analysts have said that the deal implies $146 million incremental revenues on a yearly basis.
The deal should now put Wipro and Infosys in a more competitive mode. Next quarter should see an even bitter battle for big contracts.
No Flash in the pan
Adobe has laid down its arms. The company has said that it will stop developing its software Flash for mobile devices, probably underlining Steve Jobs? theory on the product. Jobs never wanted to support it on iPhone or iPad and instead backed an open standard called HTML5. Adobe now says it will support HTML5. That?s quite a turn around.
Jobs had once called Flash unreliable and the right fit for mobile devices. Adobe responded by putting out advertisements in newspapers challenging the statement. Analysts feel the development could be a reversal for Apple?s competitors who support Flash, including HTC, Google, Motorola, Research in Motion Ltd and Samsung.
Jobs continues to hold centre stage, even after his death. He was no flash in the pan.
Dell?s increasing India focus
Dell recently celebrated the 10th anniversary of its India research and development centre in Bangalore. The firm now plans to make India a hub for development of enterprise products such as servers, storage and software. Brad Anderson, senior vice-president, Enterprise Product Group, Dell, said the company today has its strongest-ever portfolio of solutions, intellectual property and differentiated products, in its India team, serving local and global markets. ?We will continue to build capacity and further invest in India on research and next generation products,? he promised.
Dell increasingly has been looking to India for research and not without reason. Its R&D centre here has been a vital source of strength for the firm, even as it looks to develop new solutions and offer varied services.