Moulishree Srivastava| Livemint
In an attempt to tap new revenue opportunities and widen customer base, HCL Technologies Ltd has formed a strategic partnership with US-based information technology (IT) services company Computer Sciences Corp. (CSC) to help clients to upgrade their IT systems and transition to cloud computing.
The alliance is likely to enable HCL to win contracts in the US in the public and government domain, in which CSC has a significant presence. The partnership entails sharing costs, resources and revenue.
HCL and CSC will create an application modernization delivery network to enable clients to shift from old technologies to cloud-enabled platforms.
The first delivery centres will be in Bangalore and Chennai. The delivery centres will lower the risks and costs for clients making transition to the cloud.
“This is the new emerging market opportunity where we will be creating new businesses for both the companies,” said Mike Lawrie, president and chief executive of CSC, adding that the two companies will continue to compete in other areas.
According to technology market research firm Gartner’s 2014 market forecast, the global market for applications services is $210 billion in 2014.
Anant Gupta, president and chief executive of HCL Technologies, estimated the market the two companies will target under the alliance is worth around $8-12 billion a year. “A lot of money is involved in making such solutions; thus we need partnership with other companies to pool in resources.
It’s difficult for a company to pursue it alone,” said Gupta. HCL and CSC have been rivals in many IT segments, but the tie-up doesn’t come as a surprise, an analyst said. “By and large, many of these big IT companies will compete in many segments in many markets, but it is not unusual that the rival companies will work together on projects,” said a Mumbai-based analyst, who didn’t want to be named because he isn’t authorized to speak with the media. The alliance would help HCL “in terms of getting access to US government and public market”, the analyst said.
HCL has seen relatively small growth at a time when the IT market is seeing signs of revival. Analysts say that while HCL is focusing on infrastructure management services for growth, it needs to tap other opportunities to earn incremental revenue.
HCL and CSC will focus on sectors including banking and telecom. AT&T Inc. is the first signed and billed client for which both the companies will work together.
