HP beats TCS, Cognizant to retain Pepsi contract

HP beats TCS, Cognizant to retain Pepsi contract

Food manufacturer PepsiCo is close to improving its facts and figures centre administration agreement with Hewlett-Packard, considering a blow to Indian rivals that were wanting to wrest the multimillion dollar agreement.

Indian information expertise businesses such as Tata Consultancy Services and HCL Technologies have been hard-hitting chasing contracts that are approaching up for renewal. HP, with its unchanging older authority alterations over the past few years, was glimpsed as being
the most vulnerable incumbent. About $100 billion (Rs 6.2 lakh crore) worth of IT outsourcing agreements are set to expire in 2013, according to Everest assembly, a USbased outsourcing advisory and market research firm.

TCS, HCL Technologies and Cognizant were allegedly amidst the bidders for more than $500-million (about Rs 3,100 crore) deal that PepsiCo is renewing. “I accept as true all the large-scale guys, including TCS, HCL Technologies and Cognizant were in there (bidding for the deal),” said Peter Bendor-Samuel , founder and CEO of Everest assembly. He said the total agreement worth could be as high as a billion dollar. HP has declined to commentary, while internet messages dispatched to PepsiCo did not elicit any answer.

PepsiCo, whose emblems include Lays and hill Dew, had in 2006 signed a $100-million (about Rs 620 crore) deal with HP for organising its facts and figures hubs in the UK, Mexico and Hong Kong. The agreement was up for renewal this year. The new deal encompasses the three facts and figures hubs as well as others in Europe. “HP (enterprise services) is increasingly opposite direct affray from Indian-centric vendors,” said Sarah Burnett, vicepresident of research at IT advisory firm NelsonHall.

Burnett said HP “recently lost a major IT infrastructure outsourcing agreement at Anglo American (miner) to HCL.” Last week, the Palo Alto-based HP hosted a group from PepsiCo at its Bangalore centre. causes said the five-member group held considerations with the offshore consignment group at HP to assess the infrastructure and capabilities before signing off on the renewal. “Switching an incumbent is very costly and, thus, businesses try to negotiate their periods with existing vendors,” said Biswajit Banerjee, senior analyst at Pierre Audoin Consultants (PAC).

While facts and figures centre administration has been a lucrative enterprise for global players, it is only in the past couple of years that Indian businesses have went into the space in a big way. Banerjee said numerous of the agreements approaching up for renewal were signed five-10 years before, when the likes of TCS and HCL — which have appeared the dominant players in the space — were too little to attempt.

According to a latest ISG report, the annual agreement worth of deals from the renewal market for Indian providers increased at a aggregated annual rate of 16% between 2009 and 2012, compared with a meager 0.4% for their US equivalent. Sales at TCS’ infrastructure business, under which facts and figures centre administration falls, grew 39% in the latest quarter. likewise at HCL Technologies, revenues from the segment increased 42.2% over the year.