Hewlett-Packard's recently acquired EDS services unit is close to buying Fidelity's India-based IT operations for $150 million plus a long-term outsourcing deal from Fidelity, the world's biggest mutual-fund company. IBM had the inside track earlier this year, and Infosys, which has 3,000 people on the Fidelity account, could lose one of its largest clients.If the deal goes through, the 2,000 employees of Fidelity Management Research India in Bangalore and Chennai would play a central role in a reported $500 million, multiyear outsourcing deal that is being rolled into the overall transaction, according to a report in the Economic Times of India.

The deal would become the latest in a series that has seen global financial-services companies sell the India-based back-office IT operations they've built in recent years. In each case, the transactions have also included long-term outsourcing deals between the seller and buyer, and also in each case the seller has said its rationale in making the deal was a desire to return its focus to its core business.

The Economic Times article cites other recent deals fitting the same pattern:

--Six months ago, Wipro acquired Citigroup's Citi Technology Services for $127 million plus an outsourcing contract that could reach a value of $1 billion over six years. --Eight months ago, TCS bought Citibank's India-based BPO unit for more than $500 million plus a massive outsourcing agreement that could reach $2.5 billion over nine years. --And in early 2008, London-based insurance powerhouse Aviva sold its India IT operation to WNS for $228 million and an 8-year outsourcing deal valued at $1 billion.

Earlier this year when Fidelity and IBM were said to be close to locking down a deal for the Indian IT unit, Global CIO offered this perspective: "In a further sign that the Indian IT services industry remains a powerful force in global business, Infosys is competing against IBM to acquire the India-based IT unit of the largest mutual fund company in the world, Fidelity Investments. It's also interesting to note that Fidelity will reportedly retain control over high-value services such as business analytics and BPO while unloading primarily back-office functions."

That distinction between core business function such as business analytics and vital business processes, versus certain back-office functions that have over the years declined in status from strategic to tactical, underscores the need for CIOs to regularly re-evaluate what parts of their businesses are unquestionably strategic, and which are becoming so heavily automated that they're being reclassified as back-office.