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TMCNet:  Rivals HCL, CSC to tie up for infra services [Mumbai] [Times of India]

[January 17, 2014]

Rivals HCL, CSC to tie up for infra services [Mumbai] [Times of India]

(Times of India Via Acquire Media NewsEdge) BANGALORE: Nasdaq-listed IT services firm Computer Sciences Corporation (CSC) is entering into a strategic tie-up with HCL Technologies to leverage the latter's offshore delivery capabilities especially in infrastructure management services (IMS), said sources familiar with the development. The alliance represents a coming together of rivals and signals a trend of partnerships and consolidation in IT. The two are said to have been in talks for a partnership for several months and it is this perhaps that generated speculation about a possible acquisition of HCL Tech by one of the top global IT services companies. The announcement is expected on Wednesday, coinciding with CSC CEO John Michael Lawrie's visit to India. An email sent to CSC and HCL Technologies did not elicit any response. "HCL will get access to large transformation deals in the US, especially those from the public sector and government that now goes to American companies like IBM, Unisys and CSC. CSC gets access to the excellent delivery capabilities in infrastructure management services that HCL has and which is crucial to large transformation deals," a source close to the development said. CSC has around 6,000 people in infrastructure services and HCL over 20,000. This is expected to give CSC scale and access to a low-cost structure that would improve its profitability. Based in Virginia, US, CSC has 81,000 professionals in more than 70 countries. It had revenue of $15 billion for the 12 months ended September 27, 2013. CSC India, which has its service portfolio across application service, IT infrastructure service and BPO, operates across seven locations-but mainly in Noida and Chennai-and employs over 24,000 people. Most of its employees came in with the acquisition of Covansys in 2007. Infrastructure management services contracts involve data centre operations and may also include services such as help desk support, desktop management, local and wide area network operations management, and disaster recovery services. For HCL, infrastructure is now an over $1 billion business and has for long been its fastest growing vertical. CSC's global infrastructure services revenue for the September quarter was $1.2 billion, which was 35% of its revenue in the quarter. CSC's tie-up with HCL will coincide with another significant announcement about its leadership in India. The company has appointed Sashi Kumar, VP and MD of global delivery at SAP Consulting Services, as the managing director of CSC India, sources privy to the development said. Kumar was formerly the MD of Microsoft's global technical support centre in India. He succeeds Neeraj Nityanand who quit the company a few months back. CSC has had four CEOs in India in the last seven years including the latest inductee. Sources say this reflected the lack of a clear vision about India's place in CSC's larger strategy. "Lawrie is trying to change that. He has experience with India since his IBM and Misys days and he's very serious about engaging India," one source said.


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