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Software cos focus on global
alliances for big deals
New Delhi: Indian software services
companies are increasingly embracing global alliances to grab large contracts
right under the noses of foreign tech powerhouses such as IBM, Accenture and Hewlett-Packard.
Last month, Infosys Technologies
bagged a three-year, $100-million contract to manage the internal systems of
Microsoft in partnership with US-based Unisys Corp. Rival HCL Technologies won
a series of service contracts from Nokia, Xerox and Electrolux by partnering
global tech companies such as SunGard, CompuCom, Infocare, Interxion and Sun
ITS.
India’s largest software exporter, Tata
Consultancy Services, has business solutions partners, including Tibco,
Netezza, Informatica and Ingres, spanning global systems integration to
consulting projects. Likewise, Wipro Technologies delivers services across the
globe by allying with foreign companies such as Worldwide TechServices, Phoenix
IT Services, CompuCom, Getronics, SunGard and CTC.
Such tie-ups, which marry
technology and logistics as well as negate the pervasive reach of an IT
multinational, provide a glimpse into the future of India’s $60-billion outsourcing
industry.
“Partnerships will be the key for
Indian companies, as it’s difficult to build competencies in all areas,” says
Zinnov Management Consulting CEO Pari Natarajan. Partners expand the ambit of
Indian tech providers and reduce the time to market. Indeed, an easier option
than building a global footprint organically. “Some of the global vendors have
been around for 3-4 decades and have built a global delivery capability. For
us, global and regional partners help bridge that gap,” says Infosys
Technologies vice-president and infrastructure management services head Anand
Nataraj.
Infosys, the country’s
second-largest IT company, has nearly 15 alliances with global technology
providers like Unisys, BMC, VMware and Tibco.
It has a similar number of ‘team
agreements’ with regional players such as Colt for hosting services like web hosting
in Europe and KVH for infrastructure
management services in Japan. These partners are critical for
onsite desk-side support and multi-lingual services.
In the Microsoft contract too,
Unisys plays a key role. Infy operates in only 40-odd countries, but the tie-up
with Unisys raises its presence to 405 locations in 104 countries. When
Microsoft invited bids for the contract about a year ago, Infosys was one among
the many vendors with less than 10% of the work. Now, the complete internal
systems maintenance rests with Infosys, thanks to its alliance with Unisys. The
company will rely on Unisys for desk-side support, or onsite work.
“As Indian majors look to increase
the number of large deals, they may need to pitch in with a partner,” says
Gartner India principal research analyst
Diptarup Chakraborti.
Infy’s rival Wipro needs no
prompting. The company is in the process of expanding alliances in the US and European markets to emerging
markets such as Latin America, Asia-Pacific and the Middle East.
Wipro clearly understands the value
of global tie-ups. Of its partners, CompuCom has a strong presence in North America, Infocare in Europe and Sun ITS in Asia-Pacific while
SunGard is a global leader in data centres and disaster recovery systems.
US-based WWTS offers onsite support for servers to networks in more than 50
countries.
“Global delivery alliances
complement our strengths (read, low-cost, high-skill global delivery model).
Partners give us hands and field support,” says Wipro Technologies senior vice-president
& global head of technology infrastructure services Deepak Jain.
Vendor partnerships are not a fresh
concept for Indian tech companies, however. Global IT majors such as Oracle,
Microsoft and SAP have been developing solutions for customers by collaborating
with Indian companies for many years.
Even so, the difference in recent
years is that these alliances are stretching beyond core technologies like
procurement on the SAP platform or Microsoft’s cloud computing offering, Azure.
Also, deal sizes in the earlier
days hovered in the $1-billion range for a tenure of up to 10 years. Today, the
average big deal size has risen to up to $200 million while the tenure has been
cut short to around five years.
For Indian companies chasing large
contracts, fleet-footed marketing is key rather than building delivery
capability organically. Analysts say the partnership model will gain further
currency as Indian majors continue to dent the hegemony of global IT majors in
large global contracts.
Indian companies typically face few
problems in sewing up a global alliance. “Partners also gain, as they get
additional business in their markets,” says HCL Technologies infrastructure
services president Anant Gupta.
Such partnerships also help
companies delink revenues and manpower. “You don’t need to add more bodies for
the work. The partner shares them,” says Mr Natarajan.
 Copyright © 2010, Bennett, Coleman &
Co. Ltd. All Rights Reserved. 
Disclaimer:
This information has been collected through secondary research and the Embassy is not
responsible for any errors in the same.
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