July 26, 2022
Between 2020 and 2022, the total estimated deal valuation was over US$ 29 billion
The largest deal happened between Landmark Group with Verizon and Ericsson at US$ 8.3 billion
Companies are favouring consolidated deals
Indian Information Technology (IT) firms are implementing new operating models to accelerate their digitisation programmes
Indian IT firms have bagged half of the sector’s top global deals since 2020, according to an industry report. Such activities indicate an acceleration in the willingness to adopt digitization globally, and India is playing a major role to cater to that change.
Between 2020 and 2022, the total estimated valuation of these deals was over US$ 29 billion. The largest deal happened between Landmark Group with Verizon and Ericsson at US$ 8.3 billion, followed by Siemens with Atos, and Infosys with Daimler, at US$ 3.5 billion and US$ 3.2 billion, respectively.
According to experts, consolidation deals are usually contract renewals, where services are consolidated between a smaller number of providers. Companies are moving away from making deals with a larger pool of providers to a smaller one so that service offerings and accountability can be greatly narrowed down, helping the process become more convenient. This also helps the companies to save more money, which can be invested in new digital initiatives.
Though mega deals are margin-dilutive in the beginning, Indian IT firms offer cost optimisation and operational benefits, which make them profitable over long tenures.
Indian IT firms are implementing new operating models to accelerate their digitisation programmes.
Analysts are saying that some deals priced at millions have the potential to reach over US$ 1 billion over the next few years.