As the Global Economy Gained Some Traction, the Outsourcing Demand Picked up Resulting in Many Large Strategic Deals. Indian

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Smita Vasudevan [email protected] IT’s a Deal! As the global economy gained some traction, the outsourcing demand picked up resulting in many large strategic deals. Indian start up ecosystem got a boost as well with acquisitions from global biggies, and the country’s e-commerce funding touched record highs

| A CyberMedia Publication www.dqindia.com August 15, 2014 | 73 Top 20 IT Deals

Type: Strategic IT Services Deals Bharti Airtel and IBM harti Airtel, known to be India’s largest telecom services pro- Bvider, renewed its outsourcing contract with IBM for five years, reducing the order size by more than half. According to industry sources, the deal was estimated to be worth around `3,000 crore. As part of the deal IBM will offer infrastructure and applications services to the Indian Telecom major for the next five years. Bharti Airtel had signed a 10-years contract with IBM in 2004 which was in the range of $2.5 to $3 bn. With the renewal, the deal size has been cut down significantly. The company also indicated that it will be looking at developing in- Wipro will be required to set up an house capabilities and partnerships Citigroup & Wipro offshore delivery center in Bengaluru. with other technology vendors. On ipro Technologies, won It was a tough fight for Wipro as those lines, a part of the work was a whopping `2,900 crore Indian competitors like TCS, HCL, handed over to TCS and Tech Ma- Wworth outsourcing contract Infosys and foreign players like hindra. Industry sources were of the from Citigroup. The large-sized deal IBM, Accenture, Dell and the likes opinion that while Bharti Airtel didn’t brought some sigh of relief for the were vying for the contract. Wipro plan to pull out of the contract, it outsourcing company that has been and TCS seemed to have an edge wanted more cost efficiency and a on a rough patch for some time. as they already had ongoing large multi-vendor experience based on As part of the contract, Wipro will outsourcing deal with the company. niche specialities. be providing infrastructure services In 2008, Wipro had reportedly ac- The deal is considered to be a stra- and application development and quired City Technology Services tegic shift for Bharti Airtel in the out- maintenance for Citigroup’s global for around `775 crore. In 2010, it sourcing arena. operations. It was indicated that signed an agreement with Citibank to take over the operations and management of Citi’s data center in Meerbusch, Germany. This being Wipro’s first datacenter facil- ity in Europe, enabled it to offer a complete portfolio of infrastructure management solutions to global clients. The IT service provider is said to be eying large deals and is optimis- tic about more business coming from the financial services space.

74 | August 15, 2014 www.dqindia.com A CyberMedia Publication | services. The deal was valued at over `600 crore. The company had already completed a ten-year partnership with MetLife providing services across America, EMEA and Asia-Pacific. The additional deal will further strengthen the relationship and will include providing complex and mission critical services. Post the ALICO acquisition, MetLife has been looking at simplify- ing operations to realize the benefits of its global footprint and reduce op- erating costs. As part of the Contract, IGATE will work on bringing in greater efficiency and flexibility, in order to drive lower costs and increase business agility for the company. IGATE’s Senior Vice President Ganesh Iyer had indicated that through the contract it will enable TCS and HCL. The large sized con- MetLife to transform its service de- RBS & Infosys tract hence brought some good news livery framework from a resource and nfosys and IBM together bagged for the company. capacity based model to a scope and a massive outsourcing contract service level based one. I worth around `2,535 crore to de- MetLife’s decision to strike an ad- velop the computer system for the ditional deal with the service pro- UK-based bank, Williams & Glyn’s. MetLife & IGATE vider in a way indicated that it was Williams & Glyn’s, which was dor- T services provider, IGATE Cor- happy with the service offered by mant for about 30 years, is being re- poration, bagged a five-year IGATE over the last 10 years. vived by UK-based lender the Royal I contract from insurance Bank of Scotland Group (RBSG). The player MetLife for pro- bank is part of the RBS Group and viding global in- is scheduled to launch operations by frastruc- 2015. It was reported that as part of t u r e the contract Infosys and IBM will be building new banking system for Wil- liams & Glyn’s based on RBS’s existing core banking platform. RBS had earlier confirmed that it would be divesting 49% stake in the bank to a private equity con- sortium led by US buy-out firm Corsair Capital. With this, IT services major Info- sys added another large contract in its kitty in fiscal year 2014. The company’s profit margin has been under pressure and it’s been facing tough competition from its counterparts like

| A CyberMedia Publication www.dqindia.com August 15, 2014 | 75 Present ESDM Investors’ Meet 2014 Enabling Investment, Growth & Prosperity through Electronics august 26, new delhi

India’s “sunshine state” emerges as a key business and industry destination what’s going for rajasthan…

Strategic Location (Ease of Access): Close proximity to (and comprising 23% of) the Delhi National Capital Region (Delhi NCR), the second largest urban agglomeration of the world. Quality Infrastructure (Low Set-up Cost): Approx 1,500 km Dedicated Freight Corridor (DFC) in alignment with the Delhi-Mumbai Industrial Corridor (DMIC), of which 46% area lies within Rajasthan. Skills (Competitive Manpower Costs): Home to a number of medicine, technology and management institutions. Healthy Industrial Climate (Stable Policy Environment and Good Labour Relations): SEZs, IT Parks and Industrial Estates of Rajasthan host the “Who’s-Who” of industry from around the globe – BASF, BMW, Honda, TTK Healthcare, Federal Mogul, Lincoln Electric, Cap Gemini, Infosys, Mastek, Wipro Technologies and many others. High Share of India GDP (Captive Market): Rs. 513,688 crore in terms of nominal GDP during FY 2013-14, making Rajasthan 8th largest among India’s “Top 10 States” (Source: Planning Commission of India). Population of nearly 70 million (Census 2011), with a per capita GDP of Rs. 53,735 in FY 2011-12 – an attractive consumer market in its own right.

reGister at http://cmrindia.com/esdm-investors-meet-2014_register/, if electronics is a strategic element of your business growth and expansion strategy. alternately, please write to [email protected] to block your seat.

RIICO - ELCINA Electronics Manufacturing Print and online Media Partners Cluster Bhiwadi - Mahindra World City Jaipur Present ESDM Investors’ Meet 2014 Enabling Investment, Growth & Prosperity through Electronics august 26, new delhi

India’s “sunshine state” emerges as a key business and industry destination what’s going for rajasthan…

RIICO - ELCINA Electronics Manufacturing Print and online Media Partners Cluster Bhiwadi - Mahindra World City Jaipur

| A CyberMedia Publication www.dqindia.com August 15, 2014 | 155 Top 20 IT Deals

TNT Express & TNT reportedly said that it was invest- ing $200 mn in infra- Infosys structure and IT de- t was a year of significant deal ployments through to wins for Infosys. The company 2015, with the aim to I won another multi-year outsourc- automate its depots ing contract from Netherland-based and hubs. The plan courier delivery service TNT Ex- included a new online press. The deal size was estimated booking and payment to be around `600 crore. As part of platform to enhance customer expe- responsible for mobile site upgrades, the contract, the IT services major rience. maintenance, incident handling, site will provide application development construction and data centre main- and maintenance (ADM) services, ex- tenance for multi-vendor 2G/3G and panding its existing scope of work for LTE networks. TNT Express. BASE Company & BASE Company will retain owner- It was reported that TNT Express, ship of the network and of the strategic which focuses on Europe and con- Tech Mahindra network planning and development. necting Europe is eying a target of ASE Company, the subsidi- CEO of BASE Company, Jos Don- $220 mn in savings by 2015 through ary of KPN Group, and Tech vil had indicated that transferring the consolidating services, optimizing in- B Mahindra signed a five-year day-to-day network operations to frastructure, increasing productivity managed service agreement for the Tech Mahindra will enable the com- and cutting down indirect costs. operations and roll out of the BASE pany to reinforce its focus on provid- The company is looking at reshap- network in Belgium. According to in- ing an excellent customer experience. ing its portfolio, divesting its domes- dustry sources the deal size was in tic operations in China and Brazil and the range of `300-1800 crore. With reducing exposure to intercontinental this agreement BASE Company is fixed air capacity. The focus is on broadened its partnership with Tech Airports Authority more attractive areas like international Mahindra. and special services products, small BASE has the aim to cover the ma- of India & NIIT and medium enterprise customers, jority of the country with LTE by end IIT Technologies bagged a higher weight parcels and palletized of 2014. BASE and Tech Mahindra multi-year contract with the freight. partnership will work on the expan- N Airports Authority of India (AAI) sion and improvement of the for the implementation of Airport Op- network and achievement erations Control Centers (AOCC), in of daily operational ex- partnership with SITA, the global air cellence in its net- transport IT and communication spe- work systems. cialist. The deal was said to be worth Tech Mahin- nearly `344 crore. This is said to be dra will be the first multi airport project in Asia which will cover AAI, its customer airlines, and its other stake-holders across 10 cities. As part of the contract, NIIT will implement and integrate the airport management system and resource management system. This will help improve airport management by consolidating multiple sets of information and providing accurate real-time data from just one source.

78 | August 15, 2014 www.dqindia.com A CyberMedia Publication | contract term will be of four to five tract from the Volvo Car Corporation. years. As part of it, IBM will provide Industry sources estimated the con- infrastructure management as well as tract to be worth around `240 crore. application development and mainte- The partnership was aimed at nance services. providing Volvo Cars with a serv- HP and Wipro were also in the race ice to maintain and develop a wide for the contract which is said to be range of applications across the one of the largest domestic outsourc- business and to develop and imple- ing deals in recent years. ment new applications as part of its According to IDC estimates, the drive to increase efficiency and re- domestic IT services market is duce costs. expected to grow by 8% As part of the contract, Tech Ma- in 2014. This is not hindra will provide Volvo Cars with much of an improve- application maintenance and devel- ment from the 7.5% growth in first half and 6.5% in the second half of 2013. Indian enterpris- es have been cutting down The project is a key initiative or deferring their IT spending undertaken by Civil Aviation min- and investment in infrastruc- istry towards modernization of In- ture segments like server, dian airports to improve capacity storage and networking utilization, passenger throughput equipment has been on enhancement, stakeholder man- the lower side for some agement and process standardi- time. zation. It will be executed within A grim economic scenar- the next 15 months at the airports io and subsequent tighten- in Chennai, Kolkata, Ahmedabad, ing of IT budgets have resulted Pune, Thiruchirapalli, Thiruvanan- in falling demand for IT services thapuram, Calicut, Mangalore, Gu- across verticals. In that scenario, wahati, and Jaipur. large outsourcing deals like this offer The project has a provision for ex- a sigh of relief. tending the solution to additional 25 opment across multiple domains, airports in India. including manufacturing, product development, marketing, sales and Volvo Car reporting. Commenting on the develop- Adani Group & IBM Corporation & ment, Vikram Nair, head, Europe, BM won a large IT outsourcing Tech Mahindra had said that the deal from Indian business con- Tech Mahindra company was selected for its prov- I glomerate Adani Group estimated Tech Mahindra won an application en track record of delivering large to be worth around `300 crore. The maintenance and development con- scale application maintenance and development and for its global reach and scale. He added that the contract will be an opportunity for the IT service provider to develop its business in Europe and the company will be looking at proactive investment and recruitment from both local universities and the local business domain pool.

| A CyberMedia Publication www.dqindia.com August 15, 2014 | 79 Top 20 IT Deals

DNB & TCS CS also won a six-year, multi- million euro deal from DNB, a Tlarge financial services group in Norway. The exact deal size was not known, but the deal was considered to be one of strategic significance. As part of the deal, TCS will drive the company’s strategic transformation by leveraging Information Tech- nology (IT). The managed services contract covered delivery of application maintenance and development services across DNB’s IT portfolio, spanning channels, core-banking and master data areas. Liv Fiksdahl, Head, IT & Opera- tions, DNB had said that selecting TCS as IT partner was an impor- tant and concrete step in DNB’s transformation process. It will lead of fiscal 2014 based on DQ estimates to increased stability in IT opera- was around `18,330 crore and the tions, high degree of efficiency and Type: M&A & VC total employee strength was 90,000. easy access to competencies and With the merger, Tech Mahindra skills across the entire IT area, which Funding deals has been able to expand its reach spans various technologies used in and better compete with its rivals in DNB’s business units. the IT services landscape. The parent DNB was in search of the right long- Tech Mahindra company has been heavily skewed term partnership that could help in ef- towards telecom, so the new entity fectively delivering future solutions to Merger with brought in an element of diversifica- customers. And TCS was selected for tion. Its scalability has got enhanced its capability and experience. and the company is now in a posi- Amit Bajaj, Head, TCS North Eu- Mahindra Satyam tion to compete for large contracts rope, indicated that TCS will be work- pecialist IT service provider to from other verticals like BFSI, retail, ing with DNB in its transformational the Telecom industry, Tech Ma- etc. The manufacturing and BFSI journey towards becoming Europe’s Shindra completed the merger of verticals have been showing good most efficient digital bank. Mahindra Satyam with itself, making traction and the combined synergies TCS’s scale of Nordic operations is the Satyam brand a history. Valued at seem to be working out well. said to have doubled since 2010 with around `5,150 crore, it was touted as a significant increase in local hiring. one of the biggest mergers in IT industry in recent times. The merger happened four years after the acquisition Hitachi Acquires of Satyam Computer Services by Ma- hindra Group after the infamous scam by its founder Ramalinga Raju. Prizm Payment The merger materialized after a prolonged legal battle with some Services creditors and stake holders who op- apanese firm Hitachi gained posed the union. presence in the Indian payment The combined revenue at the end Jmarket with the acquisition of 80 | August 15, 2014 www.dqindia.com A CyberMedia Publication | nounced its plans to position the new company as a core production base for expanding its T&D business in In- dia and the global market, alongside its other bases in Japan, China, Bra- zil, Russia, and Southeast Asia. Commenting on the development, Takeshi Yokota, Corporate Vice Pres- ident, Toshiba, had said that the acquisition is necessary for the company’s global T&D strategy, and Vijai’s products and sales channel provide it with an ideal fit for its T&D business in India and beyond. He added that the acquisition will support the company not only in the Indian market, where it aims to secure a 20% market share within five years, but in reinforcing its position in the global market, by strengthening its worldwide network.

Prizm Payment Services. The deal market. By leveraging Prizm Payment size was estimated to be over `1,500 Services’ robust customer base of TCS Acquires crore. major financial institutions, and know- Prizm Payment Services is known how of payment systems, cash oper- to be a leading provider of payment ations and management systems for ALTI SA services using ATMs and POS sys- financial institutions, and other exper- ata Consultancy Services ac- tems to banks and financial institu- tise, Hitachi will step up development quired French enterprise so- tions in India. of IT services business in India and Tlutions provider, ALTI SA, for Hitachi entered into a share trans- globally. around Rs585cr. This is said to be fer agreement with the company’s TCS’s biggest acquisition deal in Eu- shareholders, including Winvest Hold- rope so far. The privately-held com- ings (India) Private Limited, Sequoia pany was integrated into TCS’ opera- Capital, Axis Bank and other minority Toshiba Acquired tions in France. shareholders. Alti SA is said to be one of the top In the previous year, Hitachi ac- five system integrators of SAP solu- quired eBworx Berhad, a Malaysia- Vijay Electrical headquartered financial IT solutions oshiba Corporation acquired a company, which has an extensive major part of Vijay Electrical’s track record in Internet and mobile Ttransmission and distribution banking systems, credit management business for around a whopping systems and other systems, mainly `1,200 crore. for major banks in Malaysia and Sin- Toshiba indicated that it gapore. will establish a new com- Hitachi decided to acquire Prizm pany that will absorb the Payment Services with the aim of ac- acquired business, and celerating global development of IT also integrate Toshiba’s services businesses targeting finan- design and manufactur- cial institutions, including ATMs where ing technologies for T&D it has the top share in the Japanese systems. The company an-

| A CyberMedia Publication www.dqindia.com August 15, 2014 | 81 Top 20 IT Deals

especially in Europe where Cambric had a strong presence. The acquisition also enhanced its strength in the global construction and heavy equipment sector. For Cambric, it expanded access to the Asia Pacific region and to the au- tomotive sector. Cambric had three development centers in Romania with a team of around 450 engineers, and had a rich clientele from areas like heavy ma- chinery, agricultural, off-highway and au- tomotive. At the end of De- cember 2012, its tions in France. The company has a revenue stood at $25 mn, majority of rich clientele of large French corpo- Tata Technologies it coming from the construction and rations in the banking, financial serv- heavy equipment sector. ices, luxury, manufacturing, and utili- Acquires Cambric Commenting on the acquisition, ties sectors. Patrick McGoldrick, Managing Direc- The World Economic Forum has ata Technologies, the engi- tor and CEO, Tata Technologies had recognized France as an innovation- neering services and manufac- said that Cambric acquisition gives driven economy. The country also Tturing enterprise IT provider, it access to specialists in the Con- boasts of a rich IT talent pool and announced the ac- solid infrastructure. quisition of US-based With the strategic acquisition, TCS engineering services aimed at leveraging the strong engi- company, Cambric neering talent in the country for the Corporation. The benefit of its customers in France company reportedly and other markets globally. The IT paid approximately services provider also unveiled plans `195 crore for the to further activate the capabilities acquisition of the pri- and the talent pool it has acquired, by vately-held company. setting up a new TCS SAP Innovation The partner- Center. ship was aimed at N Chandrasekaran, CEO and Man- strengthening Tata aging Director, TCS had indicated Technologies’ glo- that the move will set the platform for bal footprint and its future growth in the region. The domain capabilities synergies between the two compa- in the engineering nies will add to its strength. services landscape,

82 | August 15, 2014 www.dqindia.com A CyberMedia Publication | struction, Heavy Equipment and Auto The new company called OnMobile sector, and also to its powertrain ex- Live is a 100% subsidiary of OnMo- pertise. Additionally, Cambric’s cus- bile, US and focuses on high value tomers will have access to Tata Tech- subscriber segment. nologies’ footprint in Asia Pacific. Mouli Raman, CEO and Co-founder, OnMobile, had pointed out that the acquisition will help the company establish a strong presence in North Onmobile Acquires America. Also, integration of services of both the companies can create a ance of the company’s apps. stronger proposition to telecom op- Industry analysts were convinced Livewire erators and consumers worldwide. that the move is in line with Face- engaluru-based, telecom Value Although the financial reports for book’s mobile strategy that was lag- Added Service (VAS) provider, fiscal 2014 states that the compa- ging behind competitors despite the BOnMobile Global acquired ny faced some headwinds with its fact that a significant number of its Livewire Mobile, a mobile entertain- Livewire acquisition and it will take worldwide users access the social ment services company for over some time for it to break even. networking site on their mobile de- `100crore. The move was aimed at vices. expanding its mobile entertainment It also brought good news for the portfolio in North America. startup ecosystem in India that is OnMobile already have expertise in Facebook Acquires coming up in a big way and is being providing music services to telecom recognized globally. The fact that a operators in Asia, Latin America, Af- global giant like Facebook was ready rica and Europe. With the Livewire Little Eye Labs to take over just about an year old acquisition it has expanded its reach acebook’s taking over of Ben- startup was quite indicative of the to operators in North America. galuru-based startup, Little Eye level of innovation being displayed by As part of the purchase agreement, FLabs marked the social network- small Indian tech companies. OnMobile got access to LiveWire’s ing giant’s first acquisition in India. business assets and some liabilities The startup was maker of a software and stocks of Fonestarz Media. tool that helps Android developers to measure, analyze Google Acquires and optimize their app’s perform- ance. The deal size Impermium was said to be in ust about two weeks after the the range of `60- news of Facebook acquiring 90 crore. JBengaluru-based startup Lit- It was reported tle Eye Labs broke out, Google an- that with the ac- nounced its first ever acquisition in quisition, the Lit- India. The Internet giant’s move of tle Eye Labs team acquiring the three year old cyber se- would move to curity startup, Impermium, was quite Facebook’s head- surprising considering the fact that quarters in Menlo the company has had 141 acquisi- Park, California. tions abroad but not one in India be- The startup would fore this. The deal size was reported get access to Fa- to be around `54 crore. cebook’s world- The entire Impermium team was class infrastructure said to be joining Google’s security and would work on team. The company was founded by improving perform- Vish Ramarao, Naveen Jamal and

| A CyberMedia Publication www.dqindia.com August 15, 2014 | 83 Top 20 IT Deals

ing investors in a fresh round Snapdeal Scoops of funding that happened in July 2013. More Funds The inves- nother famous ecommerce play- tors included er Snapdeal scooped $133 mn Naspers, Tiger A(around `800 crore) in a funding Global, Accel round led by its existing investor eBay Partners and Inc. The company had earlier bagged ICONIQ Capi- funds worth $50 mn (`300 crore) in an- tal. other funding round led by eBay, Russian Nearly three Venture, Saama Capital and the likes. months later, Online shopping player eBay had Mark Risher who were earlier col- the company raised another $160mn entered the Indian market with the ac- leagues at Yahoo!. (around `960crore), which took the quisition of online site Bazee.com. The Impermium’s clients included Tum- total invest- blr, Pinterest, CNN, Washington Post ment in the and so on. round to $360 Impermium’s CEO and Co-Founder, mn. This is Mark Risher, had stated on the com- reportedly the pany website that it was founded single larg- with the mission to help rid the web est amount of spam, fraud and abuse. And the bagged by an company had worked hard to de- Indian inter- fend some of the largest and fastest net business growing sites. He added that by join- till now. Most ing Google, the team will merge with of the funding some of the best abuse fighters in the in the second world. round came The Bitzer acquisition was another ex- from new investors that included company has been facing tough com- ample of the growing popularity of Indian Dragoneer Investment Group, Mor- petition from domestic ecommerce start-ups in the global technology land- gan Stanley Investment Management, players like Flipkart. It is also known to scape. After Facebook and Google other Sofina and Vulcan Capital and so on. have made standalone investments in biggies could soon be catching up. Flipkart’s CEO Sachin Bansal in- digital commerce firms like Quikr. dicated that the fresh capital will Jay Lee, Senior Vice President and allow Flipkart to strengthen its lead- APAC Managing Director, eBay had in- ership position and will be used to dicated that the company will be looking Flipkart Raises enhance its technology and supply at accelerating growth in India and other chain capabilities, talent pool and emerging markets as part of its core user experience. strategy for driving global leadership. Massive Funding By roping in additional funds, Flip- For Snapdeal, the fresh investment ndia’s top ecommerce player, Flip- kart will be having an edge over its would offer more strength to com- kart, saw a whopping $200mn competitors in the Indian market pete with its competitors in the Indian I(`1,200 crore) coming in from exist- and also the likes of Amazon that ecommerce space. Its competitor Flip- are looking at beefing up their India kart has been raising huge investments presence. from existing and new investors, so the With its recent acquisition of additional funds would probably help Myntra, Flipkart has added a lot the company to catch up in the race. more diversity and strength to Note: The deal sizes are DQ estimates based on its business. industry sources

84 | August 15, 2014 www.dqindia.com A CyberMedia Publication |