News: TCS in race for $2 b deal

(ACERC 18/05/2007) Mumbai - Tata Consultancy Services (TCS) is chasing the biggest IT deal worth $2 billion from Britain's Prudential Insurance. However the race is not yet over with IBM and Accenture also chasing the deal along with TCS. The bids originally started with 24 bidders but the field has narrowed down to three and a decision is expected by July this year. The Prudential project will last for seven years.

TCS is bidding through its UK BPO arm Diligenta which had executed the Pearl deal worth $800 million recently. TCS management would not comment on the deal but told NDTV that they are expecting large deals from Diligenta and at least 10 deals worth $50 million each are in the pipeline. "Large deals are the order of the day, TCS is a large volume player and will look for big deals," said Jignesh Shah, Head of Equities, ABN Amro private banking.

TCS has focused strategically on UK to reduce its dependence on the US market. The revenues from Europe grew from 37 per cent to 45 per cent (YoY) in 2006-07.

The percentage growth from the US was down from 35-30 per cent in the same period given the relatively lower base in Europe. Currently the revenue from Europe is about 30 per cent and US accounts for 60 per cent, with big deals kicking in from UK this could soon change.

TCS is logging in the big league where its global peers like IBM, Accenture and EDS dominated till a year ago. Last year it made waves with deals from Bank of China, Quantas and Sommerfield the one from Prudential could just be the mother of all deals for TCS. At a time when multi vendor contracts seems to be the norm, bagging a $2 billion order will be quite an achievement for any Information Technology giant.