United States: IBM, HP shortlisted for $700 million Microsoft deal.

Byline: Mamta03

Multinational outsourcing firms IBM and HP have been shortlisted for around $700-million contract for managing Microsoft s global network of desktops, servers and other IT infrastructure, as the world s biggest software maker seeks to lower its operational costs and focus better on its core business.

India s top outsourcing vendors had also bid for this contract, but they lost out to the multinational rivals who have better global footprints and are even ready to take over assets, including Microsoft s staff.

This was one contract where most of us were bidding hard, especially given the kind of customer we are talking about, but global service providers seem to have taken a lead, said a senior executive at one of the tech firms involved during the early-stage of bidding.

Another person based in the US and familiar with this contract said, Microsoft had issued a global request for proposal (RFP) few months ago for this contract. Officials at Microsoft India did not respond to an e-mail query sent by ET.

The global IT infrastructure market has been growing exponentially over the past few years. The top-15 vendors, analysed by Forrester in a recent report, provided remote and onsite services for about 16.7 million desktops, 1.7 million servers and 23.4 million users globally. These vendors, including IBM, HP-EDS, CSC and some Indian tech firms, delivered $83.9 billion worth of infrastructure services past year.

Some clients clearly will require the scope only an IBM or HP can deliver, but many don t, said Paul Roehrig, principal analyst at Forrester Research. All of the India-centric firms, included in the study Cognizant, HCL Technologies, Infosys, TCS, and Wipro have excellent forward-looking strategies for the infrastructure business, he added.

On their part, Indian tech firms, such as TCS, Infosys and Wipro, have made substantial progress in gaining market share when it comes to application development, maintenance and back-office outsourcing, however, outsourcing of computer hardware maintenance is an area where multinational rivals still lead.

In areas where infrastructure can be managed remotely, Indian vendors are as good as anybody else, however, there are certain pieces of infrastructure management, such as end user computing, where they do not have enough global resources, said Siddharth Pai, managing director of outsourcing advisory firm TPI India. Indeed, when HCL recently won over $350 million infrastructure from Reader s Digest Association in March this year, it involved remote management of the publisher s desktops and servers.

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