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CIO - Last week, HCL Technologies and CSC announced a new partnership in the application modernization space, targeting corporate IT customers who want to move their legacy applications to the cloud.
The move was a surprise to some IT outsourcing industry watchers since $4.8 billion dollar HCL had long pitched itself as a cost-effective alternative to the likes of the $13.5 billion CSC. "These two companies have often gone head-to-head for major contracts," says Hansa Iyengar, sourcing and vendor management analyst with Forrester Research.
But changing market dynamics have brought the two together. Together, the companies will first focus on the financial services industry, building a joint banking center of excellence with delivery centers in Bangalore and Chennai, India.
HCL Joins Forces With CSC to Deliver Value-based Low-Cost Services
Noida, India-based HCL, which has focused on infrastructure services, gets access to a larger customer base, CSC's BizCloud private cloud offering, and a stronger foothold in the applications space. Falls Church, Va.-based CSC will get a new channel for its cloud platform and access to cheaper resources offshore, the lack of which has long been a competitive disadvantage for the largely onshore-focused provider. And both companies will seemingly increase their opportunities to cross-sell their products and services.
"The data center game is headed for the lowest common denominator of commoditization. With players like Amazon in the game, it's all about the lowest cost for the most grunt. It'll be as common as selecting a provider of electricity soon," says Phil Fersht, president of outsourcing analyst firm HfS Research. "The only feasible way to find new thresholds of growth and value for providers in this space is to deliver value-based services combined with low-cost, reliable, and highly scalable computing availability."