Microsoft Outsources IT to Infosys

The deal calls for Infosys to manage all Microsoft’s IT services worldwide, with a caveat: pay is tied to outcomes.

CIO.com, by: Beth Bacheldor in News, BLOG: Inside IT Outsourcing

I’m sure the Internet’s tongues are a-wagging. Microsoft is outsourcing all its internal IT support to Infosys. You can read about it here.

Under terms of the three-year deal, Infosys will manage the internal IT services for Microsoft worldwide, including IT help desk, desktop management, and infrastructure and application support, from multiple Infosys centers. The deal covers applications, devices, and databases in 450 Microsoft locations across 104 countries.

That’s a big deal, literally and figuratively. No one’s talking financial terms, but clearly it is a lot. (Anyone out there want to wager a guess?)

Anyway, whether you are for or against Microsoft’s decision, whether you think it’s yet another death knell for American businesses and more dramatically the American economy and way of life, Microsoft did do something right.

They tied the cost of the deal to its outcome. The financing is structured in what Infosys refers to as an “outcome-based pricing model,” meaning Infosys’ fees will be based on how successful the gig is, and how much money it manages to save Microsoft.

And it is definitely more than just a straight outsourcing deal, because it’s got all the flavor of a partnership. According to Infosys, the Indian outsourcer will establish a dedicated Service Excellence Office to help Microsoft implement ISO 20000 and ITSM Processes, and provides Infosys with an opportunity to become experts in the implementation and management of the latest Microsoft technologies. Whatever for? So it can then be more equipped to provide outsourcing services to other customers that are using Microsoft.

As Infosys’ Sanjay Jalona, VP and head of manufacturing North America, says in the press release, “This managed services agreement will further strengthen the Infosys – Microsoft partnership, and is a significant milestone in the multi-faceted relationship."

For Microsoft’s part, the software giant expects the deal “will help us enhance how we deliver end-user computing services to our internal employees and partners while leveraging the innovation and investments we make in developing new technologies,” according to Microsoft’s Jim DuBois, GM of Service Management, who is also quoted in Infosys’ press release.

By the way, Infosys had other positive (at least from its perspective) business news to share… it also reported today that revenue for the quarter ended March 31 was US $1.3 billion, up 15.6 percent from the same quarter a year ago, the company said on Tuesday. Net profit grew by 8.7 percent to $349 million (you can read about that here).