In keeping with the recent trend of software majors bagging big deals, Cognizant on Monday said it is expanding its IT service partnership with Gilead Sciences for a total expected value of $800 million over the next five years.
In June, Tata Consultancy Services (TCS) pulled of a $1 billion deal win from UK’s Nest, following which Infosys inked a $454mn digital transformational collaboration with Danske Bank and acquired its IT centre in India.
The announcements should help bring cheer to the IT Services sector, which is grappling with weakening demand as clients defer non-critical projects. IT majors are working on deal wins in the AI and cloud space as Jatin Dalal, CFO, Wipro told FE. Salil Parekh, CEO and MD, Infosys, had also noted the collaboration with Dankse Bank envisages the use of AI, including generative AI.
Total contract values (TCV) in the June quarter have been reasonably good for IT players, though managements have reiterated that clients are being cautious on discretionary spends. Management commentary indicated that deals were smaller and shorter in tenure owing to cuts in discretionary spends by clients.
Given this, analysts say it is heartening that TCS’ contract, with the UK’s largest workplace pension scheme Nest, runs for an initial tenure of 10 years. Moreover, Infosys’ contract with Danske is spread across a period of five years with an option to renew it for an additional year, as many as three times.
Cognizant will help Gilead streamline its business to help it go to market faster with various medicines for life-threatening diseases, like HIV, viral hepatitis, and cancer.
Cognizant derived about $1.4 billion revenue from health sciences in Q1FY23. Gilead has already partnered with Cognizant for more than three years to adopt cutting-edge technologies designed to drive better business outcomes.
