News

Microsoft Outsources IT To Infosys

Microsoft is outsourcing its IT help desk, PC, infrastructure and application support to Bangalore, India-based Infosys in a three-year deal that involves 450 Microsoft locations in 104 countries.

Terms of the deal, announced today by Infosys, were not disclosed but in an interview, Anand Nataraj, Infosys VP and unit head of infrastructure management services suggested the deal was substantial. "It's a fairly large deal," he said. "It's a major win."

Nataraj said Microsoft has tapped Infosys to implement ISO 20000 and ITSM Processes -- a set of best practices aimed at providing effective IT service management and meeting customer requirements.

The pact will involve the transition of work now performed by other partners and is not intended at displacing work done by Microsoft, according to Nataraj. "There is no job loss for Microsoft per se," he said. Microsoft for years has used offshore service providers to manage its infrastructure, applications, help desk and desktop support.

Infosys is subcontracting the PC support to Unisys. A Unisys spokesman said the company has been tapped to provide support for 120,000 employees worldwide. "This is a pretty large deal for us in terms of scope and the number of end users we are supporting," the spokesman said.

While Infosys had already been doing some work for Microsoft, Nataraj said 90 percent of the business is new to the company.

For Infosys, business is on the rise: the company today said revenues for the quarter ended on March 31 generated $1.3 billion -- a 5.2 percent increase over the same period last year and a 15 percent increase over the prior quarter. Net income of $349 million for the quarter reflected a year-over-year increase of 8.7 percent, Infosys said.

"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," said Infosys CEO and managing director S. Gopalakrishnan in a statement.

Infosys is forecasting that its revenues will grow from 16 to 18 percent for the year and for 18.5 to 19.4 percent for the current quarter, year-over-year.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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Reader Comments:

Tue, Apr 20, 2010 Matt Ohio

You guys are missing the point here I think. Read the article. These were already outsourced jobs, among various companies.

These are not U.S. based jobs, they probably have not been for a very long time. Would we all like them back in the U.S., I'm sure we would, but you can't work for $3/hr, and I bet you wouldn't given the option.

You won't see MS pay $9/hr for these services, more or less the 10-15 it'd probably get, so you want them to expend a 300-400% increase in costs in order to keep jobs here?

Closing the borders and trying to keep companies in here, and their jobs in here is self defeating. Look at GE and see what shenanigans they pulled on how to screw the system here in the states. Get used to this, this scenario won't change.
I'd even go as far to say as our system encourages these types of things, not discourages it

Mon, Apr 19, 2010

You know, India made a low-risk gamble a quite a few years' ago, putting many of it then-dear resources into educational, but not into academic rigours, but with more of a vocational posture. The US instead as a population, largely avoided the tech careers, seeing it as "busy-work", maybe a bit too blue collar. But India which has more respect for engineering, even if what they do might be a step-down form true engineering, has paid off for them in spades. Great gamble for them, and they have tons of US-based resources selling offshoring solutions to US-based clients, and they're making great margings. Now that the economy has softened, they'll make another wave if inroads because the US-based firms have their budgets compressed, and will look for serious ways to save some money, allowing them to still operate at the same level, on paper at least. In reality, there needs to be serious CBA of these offshore and onshore/offshore approaches, but I suspect they actually save nothing in the long-run because of the poor skills in customer/vendor interaction, and frustrate the clients.

Mon, Apr 19, 2010

Good job Balmer and company. This is just penny-wise, pound-foolish stuff. Just thinking of the next quarter's earnings. Everyone I know, including myself, who has to deal with offshore resources typically just come away from the interaction with a unbeneficial conversation where they just walk through a script, and nothing is accomplich. But from an accounting perspeective, it looks great. All you have to do is look at how sideways MS stock has been moving for the past 10 years to see how short-sighted vision portends for long-term success. Apple rolled its offshore support, which it did for a while as an experiment, but captured metrics on its success, and wisely reeled it back in. We all know how Apple is doing. Almost no customers appreciate or find to be a value-add to have to deal with a guy bogusly named "Chad", whose location we cannot be revealed...

Mon, Apr 19, 2010 Europe

Good morning America. This is called globalisation. While invading, sorry liberating countries for oil, wasting the environment, not spending money for education or social insurance we now have to realize all our western countries and ideals are just there to make shareholders happy and rich people richer. Don't blame MS. This is what we vote for every day. A company is only seen successful if revenue increases every year by a two digit percentage.

Mon, Apr 19, 2010

This whole offshoring thing is pretty sad. It's difficult to see how (based on wages alone) the US can compete with places such as India. In the US there's a minimum wage plus other reqts for employers. While this a good thing, it does 'seemingly' prevents us from being competitive (at least on the surface). Even if people are willing to work for less our system prevents it. What can we do...

Thu, Apr 15, 2010 Helen

The comapying and their CEO's that are outsourcing our jobs are traitors. The could care less about their country. They are selling our country for cash. I pary and hope for the day when will not be able to send a single job offshore. If they decide to move the company offshore let them. We will have to do what we have to do and not buy or use their prodcuts even if it means to lower our standard of living.

Thu, Apr 15, 2010 KE California

Network security... is this the best idea to outsource to countries with so much terrorist activity? Isn't the best threat to the US ... software invasion? When are US companies going to get wise?

Wed, Apr 14, 2010

Yup, I agree,, seems this country's just about had it. Once everything of any significance is outsourced where will our economy be? Oh wait, we're just about there, stay tuned for the final chapter...

Wed, Apr 14, 2010 john

What bugs me more than anything is that, like anyone who offshores to China or India, the cost of Microsoft products will not be cheaper. On the one hand we're too expensive to employ, on the other hand we live in the U.S. and are paying a premium for goods and services. Well, we may be seeing the last of the great experiment we call the U.S.A.

Wed, Apr 14, 2010 Bob

C'mon Microsoft - use US-based workers. No wonder no one wants to go into the tech field. Even Microsoft drinks the outsourcing Kool-Aid.

Wed, Apr 14, 2010

We are all talking about tech education in this country yet the public sector seems to outsource more and more jobs. Why would attend tech schools if jobs are not here!?! That's the question that leaders in Washington must ask when talk about kids dropping from school or not following tech careers.

Wed, Apr 14, 2010 Mike USA

Image how many US people could be employeed to do this. No wonder our economy is in the toilet!

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