Recently, the contract renewal negotiations between Indian IT service giant Infosys and German automaker Daimler have become the focus of industry attention. The two parties are discussing a $3 billion contract renewal, and plan to extend the cooperation period beyond 2028. The core highlight of this contract renewal is that Infosys plans to incorporate artificial intelligence (AI) technology into the new agreement to inject new growth momentum into its service portfolio.
The contract, called the "Double Speedup Program", was originally signed in December 2020 for eight years, covering six major service areas including network management, security services, SAP infrastructure, data centers, workplaces and operational support. Under the terms of the contract, Infosys can earn about $400 million in revenue each year, of which data center services contribute $160 million and software and hardware services contribute $240 million in revenue.
It is reported that Infosys plans to join AI technology in the new request for proposal (RFP), an innovative move that is expected to further boost its annual revenue from Daimler. At present, the discussion between the two sides is still in its initial stages, but it is expected that the agreement will be reached next year.
After Daimler split into Mercedes-Benz Group and Daimler Trucks in 2021, it is still one of Infosys' important customers, ranking among its three major customers. The other two major customers are Apple and JPMorgan Chase & Co. It is worth mentioning that Infosys, led by current CEO Salil Parekh, signed a 10-year, $1.89 billion contract with Vanguard, becoming one of its largest deals in recent years.
At present, large-scale contracts in the Indian IT industry are gradually decreasing, especially super-large agreements with over $1 billion are even rare. In addition to the $2.5 billion contract signed by TCS and Aviva last year, similar large-scale cooperation in the market is rare. Therefore, Infosys hopes to integrate AI technology into services through its cooperation with Daimler, open up new market opportunities and increase revenue.
The renewal negotiations not only reflect Infosys' strategic layout in technological innovation, but also reflect Daimler's emphasis on digital and intelligent transformation. With the introduction of AI technology, the cooperation between the two parties is expected to achieve more efficient service delivery and a wider range of application scenarios in the next few years.
Key points: Infosys plans to renew a $3 billion contract with Daimler in advance and join AI technology; the new agreement is expected to increase annual revenue; Daimler is still one of Infosys' three major customers, and discussions between the two parties are still in progress.