Microsoft signs outsourcing pact with Indian giant Infosys

Computerworld - Microsoft today said it has signed a deal with Indian outsourcer Infosys Technologies Ltd. to manage key parts of worldwide internal IT operations -- and hopefully cut IT costs.

The agreement calls for Infosys to take over responsibility for managing Microsoft's IT help desk and desk-side services operations, as well as servicing the company's applications, devices and databases in more than 100 countries.

Microsoft, not a newcomer to outsourcing, said the deal with Infosys "is simply a consolidation of work that used to be provided by multiple vendors to a single provider, Infosys." The statement added that "Microsoft has had a concentrated effort to be more efficient and save money. This was a major area where we could do this."

Although such agreements often lead to layoffs and/or the transfer of employees to the outsourcer, Microsoft said that "this new contract will not impact internal resources."

Infosys said it is looking for the three-year agreement to provide its engineers with early access to and experience using new Microsoft tools and applications when they are rolled out internally.

"We will get the first opportunities to build competencies in newer Microsoft technologies," said Anand Nataraj, vice president and unit head infrastructure management services at Infosys. Under the pact, Infosys will function as a prime contractor, and will be work some of Microsoft's existing service providers, said Nataraj.

Nataraj said Infosys can help Microsoft quickly reduce IT support costs by improving service management and support operations. The outsourcer plans to automate some lower level support activities, as well work to address support issues before they are elevated to an engineer and more expensive levels of service.

Infosys said the agreement will create a unified service management operation at Microsoft, and help the software giant adopt ISO 20000 IT service management standards.

Peter Bendor-Samuel, CEO of Everest Group, a Dallas-based outsourcing consulting and research group, called the deal a "real nice win for Infosys," that will boost the credibility of the outsourcing giant's infrastructure offerings.

Bendor-Samuel said that it is unclear how much technical advantage Infosys may get from this agreement as Microsoft shares its product development with a wide range of partners. However, he added that "it is clear is they will get marketing advantage."

The value of the contract wasn't disclosed though Bendor-Samuel projected its worth at more than $100 million.

Infosys timed its Microsoft announcement with the release of its latest quarterly financial figures. The company said that revenue for the quarter ended March 31 was $1.3 billion, up 15.6% from the same quarter a year ago.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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