HP Looking To Buy Fidelity India IT Unit Over IBM, Infosys - InformationWeek
IoT
IoT
IT Leadership // CIO Insights & Innovation
Commentary
5/6/2009
08:25 AM
Bob Evans
Bob Evans
Commentary
50%
50%
RELATED EVENTS
Moving UEBA Beyond the Ground Floor
Sep 20, 2017
This webinar will provide the details you need about UEBA so you can make the decisions on how bes ...Read More>>

HP Looking To Buy Fidelity India IT Unit Over IBM, Infosys

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.

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.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
IT Strategies to Conquer the Cloud
Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.
Video
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll