Infosys risks losing $150 mn a year from Daimler, one of its largest clients

spending.

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Infosys had signed a $3.2 bn, eight-year IT deal with Daimler.

(MINT)

“It is unlikely that Infosys will see meaningful incremental revenue from Daimler in the near term,” said Phil Ferht, CEO of HFS Research, a Massachusetts-based IT research and consulting firm. “Even where renewals occur, pricing pressure and scope rationalization typically offset any expansion. The focus is more on retaining relevance in strategic digital, engineering, and core platform areas rather than growing total contract value.”

In December 2020, Infosys signed a $3.2 billion, eight-year IT transformation deal with Daimler. Under the terms, Infosys agreed to provide services across six business divisions, including network services, cybersecurity, SAP software, data centres, after-sales call services, and workplace solutions or the IT procurement business-the biggest of the six arms.

Daimler had split into Mercedes-Benz Group and Daimler Trucks in December 2021, but both units retained Infosys for IT services work.”

“Workplace solutions was supposed to be renewed last year but we are now waiting for June to get a clearer picture. We had floated an RFP (request for proposal) but that was not agreed upon by the client,” said the first of the two people quoted earlier.