IT firms battle for cloud deals

Technology services companies are witnessing intensive competition to win large cloud migration and digital transformation deals in an environment where customers are looking to consolidate vendors in the aftermath of the Covid-19 pandemic. That’s often leading to “either win big or go home” situations for these companies, say analysts.While there is a ‘significant modernisation movement’ with firms planning to move large portions of their legacy operations into the Cloud (remotely located server); there are more strategic deals leading to consolidation of vendors, said Peter Bendor-Samuel, chief executive, Everest Group, IT advisory and research firm,. “Every big firm has a lot of needs as they emerge from the pandemic,” he said.This means more competition.“The resulting contracts are much bigger than before and this puts the vendors or service providers into a win big or go home situation. These win big or go home situations are very competitive as firms not only are competing for large books of business, they also risk losing existing business,” said Bendor-Samuel.Companies such as Infosys, Tata Consultancy Services, Accenture, Wipro and HCL Tech have bagged many large cloud and digital transformation deals, thereby ensuring a strong growth outlook for the next few quarters.“(In) the last nine months, we have had $12 billion in large deals. Previous full year was very strong but less than $12 billion...The pipeline has come back already to a good level post couple of these big deals,” said Salil Parekh, chief executive officer (CEO) and managing director, Infosys, in a virtual analyst conference by Kotak last month. He added that the ‘digital and cloud part would continue to do well’ and Infosys has been building cloud assets for the past three years.Traditional companies that hosted their applications on their own servers and had little flexibility for employees and partners to access them when the pandemic-induced lockdown was imposed globally, struggled in their business as their clients shifted their work to more nimble cloud native companies.This also resulted in chief executives of the majority of the global companies taking decisions to shift to cloud and court vendors such as TCS, Infosys, HCL and Wipro to execute these projects.

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