Leading IT Firms Pay Huge To Win Big Contracts

By siliconindia   |   Thursday, 31 July 2014, 09:05 Hrs
cmt right
Comment Right
cmt right
cmt right
Printer Print Email Email

BANGALORE: Today, it has become a trend in the industry where all the software exporters are using their power for getting the information technology contracts, for instance they are either paying money upfront or buying assets, reports Varun Sood of The Economic Times.

Some industry executives and experts believe that this trend will gain grip in a year that has 3.3 lakh crore of contracts up for renewal. Country’s largest IT firms, like TCS and Wipro are also not untouched from this trend.

TK Kurien, Chief Executive Officer, Wipro, said "Any deal you do, there will be a certain level of structuring that goes in," after TCS paid about $200 million to buy the IT subsidiary of Canadian utility Atco as part of its single-largest outsourcing deal worth $1.2-billion, reports ET.

TCS merged its Japanese subsidiary with IT Frontier Corp (ITF), a unit of Mitsubishi by signing an agreement with Mitsubishi in April this year. In the deal TCS holds 51 percent in the new entity.

Sid Pai, who heads the Indian arm of outsourcing advisory TPI said, "It's very much a trend. As deal economics move inexorably toward usage based models to include the adoption of cloud technology, service providers will have to absorb an ever increasing portfolio of client hardware and software and human resource assets."

READ MORE: Tata Group To Invest $35 Billion In 3 Yrs As Part Of Its Vision 2025

SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..