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By Mel Duvall
Microsoft has signed a three-year outsourcing deal with Infosys Technologies that will see the Indian firm take over internal IT services for the software giant.
The agreement appears to have an added bonus for Infosys in that it will provide the company with access to emerging Microsoft technologies. Infosys can then market its expertise in running Microsoft systems and applications to other potential customers.
"Infosys demonstrated that it understood our transformation goals by introducing a flexible and innovative end-to-end approach to manage our support infrastructure," Jim DuBois, Microsoft's general manager of service management, said in a statement.
Under the terms of the deal, Infosys will provide Microsoft with IT help desk, desk-side services and infrastructure and application support from multiple global centers. Infosys said it will manage Microsoft's internal IT services for applications, devices and databases in 450 locations, across 104 countries.
Financial terms were not disclosed, but Microsoft said it expects the outsourcing deal will result in lower IT costs and add flexibility to its operations. Infosys is delivering the services on an "outcome-based pricing model," which would essentially provide incentives based on how much money it can save Microsoft or on an improved level of service basis.
For its part, Infosys said the agreement provides the company with an opportunity to partner with Microsoft IT and gain deep and early expertise in the implementation and management of the latest Microsoft technologies. This is likely to include a wide range of cloud-based services planned by Microsoft.
The deal came as Infosys reported its fourth-quarter and annual earnings, which showed gains in a difficult year. For the quarter ending March 31, revenues were $1.29 billion, up 15.6 percent from the same period a year ago. Infosys said it added 47 customers in the quarter and almost 4,000 employees.
For fiscal 2010, revenues were $4.8 billion, up from $4.66 billion a year earlier. Looking ahead, Infosys predicted revenues would increase in the range of 18.5 percent to 19.4 percent in the quarter ending June 30, and for fiscal year 2011, revenues are projected to increase 16 percent to 18 percent.
"We have been able to take advantage of the opportunities in the market and grow faster due to our investments in capacity and capability building even during the economic downturn," CEO S. Gopalakrishnan said in releasing the results. "Though the economic environment continues to be challenging, businesses are investing in growth for building a better future."
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