Infosys wins $1.6-billion deal from Liberty Global
Infosys, an Indian IT services company, has secured a significant deal worth €1.5 billion ($1.6 billion) from Liberty Global, a digital communications firm. This deal involves building and expanding entertainment and connectivity platforms for Liberty Global. The announcement was made on August 15. This marks the third major agreement that Infosys has entered into this year.
Despite this positive development, it’s noted that Infosys has reduced its revenue guidance for the current financial year due to challenging macroeconomic conditions. This indicates that while the company is securing substantial deals, it is still navigating difficulties in the broader economic environment.
Infosys plans to leverage its technology offerings, including “Infosys Topaz” which enables AI-first capabilities, and “Infosys Cobalt” which is a cloud-first digital foundation, to enhance the services it provides to Liberty Global. Salil Parekh, the CEO of Infosys, expressed enthusiasm about the collaboration and the potential for transformative capabilities.
“Infosys Topaz” is a collection of services, solutions, and platforms that utilize generative AI technologies. This indicates that Infosys will be leveraging artificial intelligence capabilities to enhance and innovate the services they offer to Liberty Global.
Furthermore, the agreement between Infosys and Liberty Global has an initial contract duration of five years. However, there is an option to extend the agreement to a total duration of eight years.
This potential extension would result in an increase in the overall value of the deal from €1.5 billion ($1.6 billion) to €2.3 billion ($2.5 billion). The specifics of this extension option provide both companies with the opportunity to continue their collaboration and expand their partnership over a longer period.
As a component of the agreement between Infosys and Liberty Global, Infosys has stated that it will enable Liberty Global, a company engaged in converged video, broadband, and communications services, to achieve run-rate savings exceeding €100 million per year. These savings encompass various areas including operational efficiencies, cost reductions, and investments in technology.
It’s worth noting that Liberty Global has been a client of Infosys since February 2020. The new agreement will involve Infosys taking over the responsibility for both building and operating Liberty Global’s Horizon entertainment and connectivity platforms. This means that Infosys will be involved in designing, developing, and maintaining the technology infrastructure that supports Liberty Global’s services in the realm of entertainment and connectivity.
This partnership showcases the continuation and expansion of the business relationship between Infosys and Liberty Global, with a focus on enhancing operational effectiveness and leveraging technology for mutual benefit.
In the collaboration between Infosys and Liberty Global, Infosys intends to leverage its scale, technological expertise, and advanced offerings such as the Infosys Topaz AI solution. This expanded partnership is aimed at ensuring sustained operational excellence for Liberty Global. Additionally, Infosys will contribute a highly scalable development framework for the creation of new features and capabilities within the platforms, leading to improved efficiencies for Liberty Global’s operations.
Furthermore, as part of the arrangement, Liberty Global will license the platforms it collaborates on with Infosys. This licensing approach will allow Infosys to offer these platforms to new operators and expand into new markets. This strategic move permits Infosys to extend its digital services to a wider range of clients and regions.
It’s noteworthy that while Infosys takes on a significant role in developing and operating the platforms, Liberty Global will still retain control over the product roadmaps. This means that Liberty Global will continue to steer the strategic direction of the development of its Horizon entertainment and connectivity platforms. Additionally, Liberty Global will retain full ownership of the intellectual property associated with these platforms.
The collaboration underscores a multifaceted partnership where both companies play to their strengths to create value and advance their technological offerings in the digital communications and entertainment sector.
As a part of the agreements between Infosys and Liberty Global, around 400 employees from Liberty Global will be joining Infosys. These employees primarily come from various senior executive roles and technology teams within Liberty Global’s Product, Technology Development Service Delivery Group, Network & Shared Operations, and Security Groups.
The transition of these employees to Infosys signifies a strategic move aimed at leveraging their expertise and experience within the communications, media, and entertainment sectors. This influx of talent will provide Infosys with a skilled workforce that is well-versed in the specific domain of digital communications and entertainment platforms.
By joining Infosys, these employees will have the opportunity to gain exposure to a global business environment, benefit from the scale of Infosys’ operations, and access broader career advancement prospects. They will also play a crucial role in shaping the trajectory of Infosys’ communications, media, and entertainment business. Their addition to Infosys is expected to significantly enhance the company’s engineering capabilities in this sector.
This talent integration highlights the strategic alignment between the two companies, fostering knowledge transfer and promoting collaborative innovation within the digital communications and entertainment domain.
Infosys CEO Salil Parekh’s statement reflects the company’s anticipation of integrating the incoming talent and innovation teams from Liberty Global into Infosys. This signifies Infosys’ commitment to continuing the strong working relationship and trust that has been established with Liberty Global.
In addition to the Liberty Global deal, Infosys has secured other significant agreements this year. These include a $1.5-billion deal with bp (British Petroleum) and a $454-million deal with Danske Bank. These developments highlight Infosys’ continued success in securing substantial contracts across diverse sectors.
Furthermore, it’s noted that in recent times, Infosys’ rival, HCL Technologies, has also secured a significant contract. HCLTech’s deal involves a $2.1-billion contract from Verizon, a prominent telecommunications company. This highlights the competitive landscape within the IT services industry, with various companies securing large contracts and expanding their portfolios.
