The news should boost the IT services industry, which is struggling with declining demand as clients put off less important projects.
On Monday, Cognizant made an announcement that it was extending its IT service agreement with Gilead Sciences for an additional $800 million in estimated value over the following five years, continuing the current pattern of software giants landing huge deals.
Tata Consultancy Services (TCS) won a $1 billion deal from UK company Nest in June; as a result, Infosys signed a $454 million agreement with Danske Bank to work together on digital transformation and bought the bank’s IT center in India.
The news should boost the IT services industry, which is struggling with declining demand as clients put off less important projects. According to Wipro CFO Jatin Dalal, IT giants are seeking to close deals in the cloud and AI sectors. The collaboration with Danske Bank envisions the usage of AI, especially generative AI, according to Infosys CEO and MD Salil Parekh.
Although management has emphasized that clients are being cautious about discretionary spending, total contract values (TCV) for IT players have been fairly positive in the June quarter. Because clients were cutting back on discretionary spending, deals were smaller and lasted less time, according to management opinion.
Given this, experts find it encouraging that TCS’ deal with Nest, the largest workplace pension plan in the UK, has an initial 10-year term. In addition, the deal between Infosys and Danske has a five-year term with a three-time option to extend it by another year.
Cognizant will work with Gilead to improve its operations so that it can bring numerous medications for deadly illnesses including cancer, viral hepatitis, and HIV to market more quickly.
In Q1FY23, Cognizant earned nearly $1.4 billion from the health sciences. For more than three years, Gilead and Cognizant have worked together to implement cutting-edge technologies that are intended to improve business outcomes.
