IT giants shift to shorter partnerships amid cancellations
MUMBAI, INDIA — Industry experts believe that major IT firms are shifting their strategy towards shorter, staggered deals amid a rise in tech deal cancellations and economic uncertainty.
Infosys and Tata Consultancy Services (TCS) are among those adjusting their approach, focusing on partnerships with shorter durations with potential for future expansion.
Outsourcing expert Pareekh Jain notes that long-term deals typically come with aggressive discounts, with margin benefits materializing later in the deal’s lifespan.
Given the uncertain spending environment, he advises vendors to be cautious about such commitments.
S&P Global Ratings Analyst Spencer Ng expects most changes to occur with smaller deals, possibly leading to revenue losses for vendors as clients concentrate on consolidation.
However, despite the current climate, large deals are still emerging. Companies are encouraged to forge tech-enabled partnerships to secure a “piece of the pie.”
Constellation Research Founder Ray Wang added that Indian IT majors would likely benefit from the demand for technologies like generative AI in large deals, mirroring the positive shift in market share seen when digital demand surged five years ago.
