The India’s fifth biggest Information Technology company has been awarded a $500 million Information Technology outsourcing deal from the Merck Sharp and Dhome based in the US. The contracts with the one of the drug making giant is indicative of the comeback of the large scale agreements within the Information Technology sector particularly in India. The big deals totaling the $300 million or more were more or less nonexistent in the wake of the global recession stemming from the subprime debacle in the US. The contract with the one of the drug making giant is the indicative of the comeback of the large scale agreements within the Information Technology sector.
Some of the highest bids for the contracts that come close to the HCL-Merck agreement include Citibank’s 2.5 million dollar agreement with the TCS in 2005, TCS $848 million contract with the Pearl Group based in the UK in 2008 and the ABN Amro’s $4000 TCS in 2005. The HCL Technologies shares went up to 52 week highs to approximately $10 after announcing the deal during the market hours and the closed at $9 on India’s benchmark. The TPI India Partner is a consultant on the large Information Technology restructuring deals. It is not the biggest but one of the mega deals that they have seen in the recent times. The deal indicated that a shift towards more outsourcing contracts than offshoring. The clients seem to look at the leveraging the global delivery capabilities of the vendors.
The consolidation on the pharmaceutical space along with the challenges that they face on the patents front, the coupled with a push from the Healthcare reforms in the US presents an exciting opportunity for the Indian IT services providers. Noida based HCL planning to offer the BPO services enterprise application development, the remote infrastructure management. The deal is expected to carry over into the next five years. The revenue from the Merck deal is expected to flow in from the present quarter. The revenues from the healthcare and the lifesciences made up 8 percent of the total $685 milliom revenue for the HCL. The other Indian Information Technology service providers like the TCS, HCL, Wipro and Infosys are already offering their services to the multinational pharmaceutical majors. The outsourcing industry has been growing steadily at a 2-3 percent rate in the wake of the recession, one of the few world combine to the contribute a whopping $47 billion outsourcing opportunity that is being tapped by nearshoring,onshoring and offshoring companies. The IT BPO spending by the pharma firms that have been adding at a growth rate of more than 20 percent.
REFERENCE:
http://outsourceportfolio.com/hcl-bags-billion-dollar-contract-merck-sign-mega-deals/
