TCS & SAP Sign 5 Year Deal to Modernize Cloud and AI Systems

By siliconindia | Friday, 28 November 2025, 05:19 Hrs

TCS to modernize SAP’s cloud and AI operations over five years
Deal focuses on streamlining IT and boosting AI-led innovation
Aims to cut costs, speed development, and align IT with business needs

Tata Consultancy Services (TCS) has entered a five-year agreement with global software giant SAP to modernize its enterprise-wide cloud and generative AI operations. The deal, considered one of SAP’s major internal tech transformation efforts, will help the company simplify its IT landscape and accelerate innovation. While the contract value has not been revealed, analysts believe such large-scale modernization programs often run into hundreds of millions of dollars.

Under the partnership, TCS will work to streamline SAP’s IT systems, improve operational efficiency, and strengthen AI-driven capabilities. The initiative is expected to deliver faster development cycles, lower total ownership costs, and tighter alignment between SAP’s IT and business functions.

Over the next five years, TCS will reshape SAP’s internal IT setup to support more responsive, cloud-first and AI-enabled operations. The collaboration aims to help SAP unlock new revenue opportunities, support business growth, and offer improved experiences to enterprises and customers worldwide.

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Industry experts say the deal stands out because it focuses on transforming SAP’s own internal systems, not those of its clients. According to Phil Fersht, founder of HfS Research, SAP is modernizing its IT the same way many global enterprises do by simplifying systems, deepening cloud adoption, and investing in AI. Bringing in TCS signals SAP’s commitment to rebuilding its core technology foundation.

TCS will also assist SAP with end-to-end application lifecycle services through a unified, AI-powered model. The partnership will be supported by four centers of excellence focused on GenAI, business technology platforms, business data cloud, and customer experience.