New Delhi: Cognizant announced on Monday that it is expanding its IT service contract with Gilead Sciences for a total projected value of $800 million over the next five years, continuing the recent trend of software giants snagging large deals.
Tata Consultancy Services (TCS) won a $1 billion deal from UK company Nest in June; as a result, Infosys signed a $454 million agreement with Danske Bank to work together on digital transformation and bought the bank’s IT centre in India.
The news should boost the IT services industry, struggling with declining demand as clients put off less critical projects. According to Wipro CFO Jatin Dalal, IT giants seek to close deals in the cloud and AI sectors. According to Infosys CEO and MD Salil Parekh, the collaboration with Danske Bank envisions the usage of AI, incredibly generative AI.
Although management has emphasised that clients are cautious about discretionary spending, total contract values (TCV) for IT players have been fairly positive in the June quarter. Because clients were cutting back on discretionary spending, deals were smaller and lasted less time, according to management opinion.
Given this, experts find it encouraging that TCS’ deal with Nest, the largest workplace pension plan in the UK, has an initial 10-year term. In addition, the agreement between Infosys and Danske has a five-year period with a three-time option to extend it by another year.
Cognizant will work with Gilead to improve its operations to bring numerous medications for deadly illnesses, including cancer, viral hepatitis, and HIV, to market more quickly.
In Q1FY23, Cognizant earned nearly $1.4 billion from the health sciences. For over three years, Gilead and Cognizant have worked together to implement cutting-edge technologies to improve business outcomes.