Microsoft-Infosys Contract Woth Over $100 Million

15 April 2010 No Comment

Software Giant Microsoft have outsourced some of the internal IT services to Outsourcing Giant Infosys. This three year outsourcing contract is worth over $100 Million.

According to this contract Infosys will manage the internal information technology services, including help-desk support, for Microsoft from centers across 104 countries.

Infosys, a longtime Microsoft partner, says it will streamline implementation processes, simplify support and service, and lower enterprise costs by using the latest Microsoft products, including Windows 7.

“This is a huge deal for two reasons,” said Marc Harrison, president of Silicon East, a Microsoft solution provider in Manalapan, N.J. “First, obviously Microsoft bypassed all of their U.S.-based partners and chose Infosys. Second, this will give Infosys a tremendous competitive advantage globally.”

Having early access to Microsoft technologies will allow Infosys not only to be months ahead of everyone else at product launch, it’ll also enable the company to help shape the feature sets of future Microsoft offerings, according to Harrison.

What’s interesting is that Infosys was the only party that issued a press release about the deal, and it isn’t talking about how much money is involved. As noted elsewhere, Microsoft is downplaying the significance of the deal and insisted that it doesn’t change the ratio of its internal and outsourced support.

“This deal is simply a consolidation of work [IT support services] that used to be provided by multiple providers to a single provider, Infosys,” a Microsoft spokesperson said in an e-mail. “Microsoft has had a concentrated effort to be more efficient and save money and this was a major area where we could do this. This new contract will not impact internal resources.”

Microsoft has been outsourcing some of its internal IT support and operations tasks for years, but it has maintained an advanced Help Desk that provides support to internal employees, says Rennie Sawade, communications chair for WashTech, a union-affiliated organization formed by Microsoft contractors in 1998 to advocate for tech workers. This group could be targeted in future layoffs, according to Sawade.

What’s ironic is that cost savings is a huge focus in Microsoft’s product marketing. In the run-up to Windows 7′s launch last year, Microsoft said Windows 7, when deployed in conjunction with System Center Operations Manager and System Center Configuration Manager, would greatly reduce a company’s user support costs.

Likewise, in touting the benefits of Windows Server 2008 R2, Microsoft said its virtualization features would not only significantly reduce the cost of data center hardware provisioning and management, they’d also let customers leverage existing investments in infrastructure tools and internal Windows server expertise.