Summary
The list of solution providers lining up to snag a huge IT contract from oil company BP reads like a Who's Who of the top integrators. Tata Consultancy Services and Infosys Technologies are competing against other top U.S. and India-based integrators for the contract, which is worth up to $1 billion, according to The Economic Times.
Analysis
Wipro, India's No. 3 IT firm, and Mahindra Satyam are competing along with IBM (NYSE:IBM) and Accenture for the contract to be awarded in August, the newspaper reported.
BP outsources most of its application development, system integration and infrastructure management work. Its list of suppliers includes roughly 30 firms, including IBM, Accenture, Mahindra Satyam and Infosys. However, BP reportedly is interested in reducing its number of vendors.
A BP spokesman told The Economic Times that the company was reviewing its IT service providers and the process was nearing an end, but did not confirm numbers of current or future technology service providers.
The news is a bright spot for India in an otherwise bleak global economic picture. According to TPI, a global sourcing advisory firm in Houston, the total contract value of new outsourcing contracts fell 22 percentglobally in the first half of 2009 to approximately $19 billion -- the lowest level since 2001.
"In addition, over the past six months, companies have been more tentative and tactical about making sourcing decisions as they try to navigate these challenging economic times. Nonetheless, recently we have seen some very early signs of stabilization in ITO markets, especially in the United States, which gives us some encouragement that we may be seeing a bottom to the current slump," said Mark Mayo, partner and president of TPI Global Resources Management, in a press release.
According to TPI, the declines resulted from a reduction in megadeals in Europe as well as lower spending globally on business process outsourcing.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
