Indian IT services giant Infosys is actively negotiating with German automaker Daimler to accelerate the renewal of a $3 billion contract, aiming to extend their partnership beyond 2028 under the current deal, Mint reported.
One of the most notable aspects of this renewal is Infosys' plan to integrate artificial intelligence (AI) technology into the contract, supplementing its existing service offerings with a new revenue stream.
Within Infosys, the Daimler project, known as the 'Twice as Fast' programme focuses on delivering solutions in six key areas: network, security, SAP foundation, data centre, workspace, and operations. According to sources, the deal guarantees an average annual revenue of $400 million.
The data centre segment contributes $160 million in annual revenue, while the remaining $240 million comes from hardware and software components.
Infosys is seeking to extend the contract by at least a year, from 2028 to 2029, while renegotiating and strengthening the hardware and software business. The company also plans to introduce AI as a seventh revenue stream in the new arrangement with Daimler.
The Contract
Signed in 2020, the deal is expected to be worth $3.2 billion and was reportedly the biggest deal Daimler had ever given to Infosys. The Infosys and Daimler AG deal is much larger than the $1.5 billion Vanguard deal, which was completed in August of this year.
The new multibillion-dollar deal between Daimler and Infosys calls for renovating the infrastructure and switching to a hybrid cloud environment. The deal will boost Daimler's core engineering and digital capabilities while raising Infosys' profile in the automotive industry.
Along with Apple and JPMorgan Chase & Co, Daimler remains one of Infosys' top three clients. One of the company's largest deals under CEO Salil Parekh was a 10-year, $1.89 billion contract with Vanguard in 2020.
The push for AI integration comes at a time when the Indian IT industry is witnessing a scarcity of $1 billion+ megadeals. Apart from TCS’s $2.5 billion outsourcing deal with Aviva last year, there have been few large-scale contracts in the sector.
