The Hindu Business Line : TCS sees infrastructure services as engine of growth

Bangalore, Sept. 19 Tata Consultancy Services said it has seen a significant increase in the deal size of its infrastructure management services contracts, and added it expects strong growth in the business, which would drive revenue for the company.

During the next three years, the company expects the business to have a year-on-year growth of 60-70 per cent, said Mr P.R. Krishnan, Vice-President, Global Head of Infrastructure Service Practice, TCS. He said compared to fiscal 2006, when deals were less than $10 million, it varies between $15 million and $150 million at present.

Key sectors

The growth would predominantly come from the retail and manufacturing sectors, said Mr Krishnan. Most of the Indian IT vendors now expect the two sectors to drive growth, given the crisis in the banking and financial sector.

Mr Krishnan said the business has grown to more than $400 million at present, compared with $40 million in fiscal 2004 when it was formally launched. “It would be the growth engine for the rest of the company,” he added.

TCS said about 50 per cent of the growth would be from existing customers. This is largely because the company is focussed on cross-selling its infrastructure services to its application development and management customers.

clients’ behaviour

Also, the clients’ behaviour has changed over the last 18 months and they are comfortable with end-to-end outsourcing, said Mr Krishnan. Earlier, they would out-task either server management or desktop support to a vendor, but now they want to outsource the entire thing to one vendor. This has led to bigger-sized deals, he added.

Mr Krishnan said some companies split the entire work they want to outsource into smaller contracts and give them to various vendors because it allows the companies to negotiate a better rate. So, different processes like application development and management or infrastructure management are given to different vendors. This has also helped TCS to win more deals, he added.

In the first-quarter, infrastructure services contributed 7.7 per cent to total revenue, compared with 5.7 per cent in the year-ago quarter. For the period, the company reported revenue of Rs 6,411 crore.

More Stories on : Outlook | Tata Consultancy Services Ltd | Software

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
RBI sets limits for single, daily transactions thru mobile phones

DoT mulls spectrum sharing

‘Tax sops can help IT sector spread into smaller towns’

Nasscom says IT export target on track for now

Revert us to Govt, demand BSNL staff

Satyam office in Holland

‘Knowledge replacing capital in every sector’

TCS sees infrastructure services as engine of growth