Infosys, Wipro clinch bn-dollar deals with German companies2 min read . Updated: 23 Dec 2020, 06:46 AM IST
- Deals with Germany’s Daimler AG and Metro AG involve absorbing clients’ employees and will require regulatory approval
Infosys Ltd and Wipro Ltd on Tuesday said they have bagged billion-dollar, multi-year technology contracts from Germany’s Daimler AG and Metro AG, respectively.
Both deals involve absorbing clients’ employees and will require regulatory approval, the Indian software services companies said.
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While Infosys didn’t disclose financial details of the contract with Daimler, a person familiar with the development said the outsourcing deal is worth more than a billion dollars.
Cross-town rival Wipro said it estimates its contract with Metro to generate $700 million in revenue in the first five years. The company has the option to extend the contract by four more years, leading to potential spending of more than $1 billion, it said in a statement.
Bengaluru-based Infosys will help Daimler upgrade its IT operating model and infrastructure across workplace services, service desk, data centre, networks and SAP (systems applications and products).
As part of this partnership, automotive IT infrastructure experts based out of Germany, Europe, the US and the Asia-Pacific region will be transferred from Daimler to Infosys. The transfer will also allow Infosys to bolster its automotive business.
“Infosys has deep expertise in helping clients across the globe navigate digital journeys, and as a part of this strategic partnership, we look forward to setting a new standard for the automotive industry," said Salil Parekh, chief executive officer, Infosys.
The pandemic has accelerated the adoption of digital technologies and demand for cloud, artificial intelligence-based offerings and cybersecurity, which are critical areas of growth for companies such as Wipro and Infosys.
In July, Infosys won a multi-year digital transformation deal from US investment firm Vanguard. The deal, pegged at about $1.5 billion, is one of the largest-ever for the company and an indication that digital technology spending is on the rise.
Wipro said its takeover deal with Metro is expected to generate revenue of more than ₹1,000 crore annually for the company. The Indian company will absorb more than 1,300 employees of the German wholesaler.
As a part of the transaction, Wipro will also take over the IT units of Metro—Metro-NOM Gmbh in Germany and Metro Systems Romania SRL.
Wipro will deliver a technology, engineering and solutions transformation programme for Metro as it positions itself as a wholesale 360-degree provider in the hotel, restaurant and catering food industry fuelled by quality, focus and flexibility.
The programme will encompass cloud, data centre services, workplace and network services, along with application development and operations to help drive Metro’s transformation agenda.
Thierry Delaporte, chief executive and managing director of Wipro, said, “Like us, Metro AG is focused on leveraging digital transformation for competitive advantage. Wipro’s role is to make that transformation efficient and effective."
The takeover is expected to close before the end of Apri next year.
Infosys’s deal momentum has been steady and strong in the three months to 31 December, Parekh said at an event last week.
The December quarter is considered a seasonally weak period due to the holiday season in key markets such as the US and Europe.
Infosys’s digital business has grown 25.4% since last year and contributed 47.3% to the revenue in the September quarter. Parekh said the contribution could increase to 50% in the next few quarters.