Holcim’s data centre consolidation drive may benefit Indian IT firms

Swiss cement giant Holcim may consolidate its global data centre infrastructure in a move that presents a $200-million revenue opportunity for home-bred information technology companies.

It is reliably learnt that IBM, Tata Consultancy Services, Infosys, Wipro and NIIT Technologies are in the fray for a five-year contract to assist the cement maker reduce its global data centres to 4 from the current 10.

The selected vendor would also be responsible for refreshing applications and technology infrastructure around Holcim’s data centres, sources close to the development said.

In response to a BusinessLine questionnaire, a spokesperson for Holcim said: “As a matter of principle we do not comment on this kind of detail.’’

Sources added that a final decision on the project was expected to be taken in the next four weeks.

Holcim is expected to save over $20 million annually by consolidating data centres, which are facilities that house computer systems and associated components such as telecommunications and storage systems.

The cost-cutting angle assumes significance in the backdrop of Holcim’s proposed $50-billion merger with French counterpart Lafarge, which could reshape the global buildings material industry, when completed.

“Holcim has been on a leadership journey for several years with the aim to improve its financial and operational performance. Improving the efficiency and effectiveness of its IT systems, including data and shared services centre consolidation in Europe and around the world, are key focus areas of this operational excellence program,” said Peter Schumacher, Founder and Chief Executive Officer of Value Leadership Group, a management consulting firm.

Eventually, Holcim would have a global data centre each in Europe, North America and Asia Pacific, according to a senior official with one of the bidding companies.

Data centre consolidation lends itself to virtualisation and more services around infrastructure management, a domain which is increasingly becoming the strength of companies such as TCS, HCL Tech, Wipro and others. It is estimated that by 2020, remote infrastructure management services can contribute more than a third of total IT service revenues for India.

Sources said that a successful IT vendor would work with a consortium because of the significant hardware play involved in the deal. The entire endeavour would help Holcim, which owns ACC and Ambuja Cement in India, optimise its technology infrastructure and reduce the cost per application.

Holcim has been one of the early European adopters of the IT outsourcing model with ongoing projects in different parts of the world. TCS, NIIT Tech and IBM are empanelled with Holcim and are part of its current supplier list, sources added.

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