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Are rival partnerships the future of IT outsourcing?

Stephanie Overby | Jan. 24, 2014
HCL and CSC, companies that have often competed for customers, have teamed to focus on legacy application modernization and cloud hosting. Could partnerships formed by rivals prove more valuable than mega-acquisitions as IT outsourcing providers respond to changing market dynamics?

Despite the importance of CSC's proprietary cloud offering to the arrangement, HCL says it will remain vendor-agnostic with regard to platforms. "We will continue to leverage CSC BizCloud, AWS, Azure, Force.com, and ServiceNow among others as part of our cloud ecosystem," says Steve Cardell, HCL's president of enterprise services and diversified industries. "We work closely with our customers to develop use cases based on application characteristics and [on that basis] we make decisions on the type of cloud to be leveraged. As we move forward, the use cases will evolve and so will the [cloud] offerings."

Time will tell how enterprise buyers respond to this alliance and whether the two rivals will be successful in scaling up their collective services. "The next year or so will say how well this partnership will work," Iyengar says.

"This partnership could serve as a highly effective model for providers seeking to address the new emerging marketplace defined by deep industry knowledge coupled with vertically-focused technology platform solutions," adds Fersht. "Mega-mergers and acquisitions in IT services have become far, far too costly and unrealistic in today's environment. Partnerships like this could signal the way forward for many ambitious service providers."

 

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