IT firms see shift to shorter deal cycles

DEAL CYCLES IN India's IT services sector are becoming shorter, even for large contracts—a trend analysts expect to continue in the coming quarters.

- PADMINI DHRUVARAJ

DEAL CYCLES IN India's IT services sector are becoming shorter, even for large contracts—a trend analysts expect to continue in the coming quarters. This shift reflects rapid technological advancements and evolving client priorities, pushing companies to prioritize flexibility and agility over long-term commitments.

HCLTech CEO and managing director C Vijayakumar noted during a post-earnings press conference, "We're seeing the average duration of signed deals getting shorter, which naturally leads to a moderated total contract value (TCV). However, the more important metric here is annual contract value (ACV), which remains strong". HCLTech reported a slight sequential decline in deal wins, with its TCV at $2.1 billion for the December quarter compared to $2.2 billion in the previous quarter.