India will likely hang on to its reputation for the reason that the world’s biggest outsourcer, but China should not be underestimated in the long run

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Infosys Technologies and IBM are locked in a battle to acquire the Indian IT captive unit of the world’s largest mutual fund company, Fidelity Investments.

The deal may involve $150-180 mn upfront transaction in return for an assured multi-year outsourcing contract, at least two people involved with the matter declared.

A older official at human being of the companies bid-ding for Fidelity’s back-office business said, “IBM has offered to pay around $150 mn for the unit while Infosys has indicated that it could pay up to $180 million,” he said, requesting anonymity. Though Wipro is still left in the fray, the tussle is between IBM and Infy as of at this time, a one involved in the negotiations before-mentioned.

Fidelity outsources around $50 mn value of projects to Infosys every year. For IBM, Fidelity is an over $200-million customer. Officials at Infosys and IBM did not offer a single one comments in response to an e-mail consider questionable sent by the agency of ET on Thursday. When contacted, a Fidelity spokesperson reported: “We can assure that as part of our global trade transformation strategy, we are exploring options to optimise our Technology Delivery Model.

We are evaluating sourcing options with leading global technology good providers to maximise the value we can offer our stakeholders, including employees. It is too premature in the process to talk about especial details and anything else is purely speculation at this stage.”

Banking sources said other bidders such as Capgemini, Accenture and HP-EDS desire dropped out of the children. Tier-II Indian firms of that kind as iGate explored the contingency of bidding, but did not constitution abundant advance with Fidelity laying from a high to a low position stiff conditions to enter the race.

Fidelity’s IT captive is part of the India-based Fidelity Management & Research (FMR), with centres in Bangalore and Chennai employing nearly 2,000 people. Accenture is believed to have forswear the fray after indicating that it may not absorb the entire employee count, but this could not have existence verified independently.

An outsourcing expert, who did not wish to be quoted, told ET put on Thursday that IBM could score upper Infosys because of its over two-decade old relationship with Fidelity. “Around 15-20 years ago, Fidelity and IBM had come together to form Fidelity Employee Services Company, or FESCO - so, IBM has much deeper relationship with Fidelity,” he reasoned.

While Infosys brings pure off-shore expertise, IBM derives three times the sort of the Indian giant gets from serving Fidelity globally. In the past time six months, US financial behemoth Citigroup and UK security against loss giant Aviva sold their prisoner back-office operations.

WNS Holding paid Aviva $228 million upfront ready money and received $1-billion outsourcing contract spread above 8 years season Tata Consultancy Services (TCS) acquired Citigroup’s BPO arm for $505 mn in return for business worth $2.5 bn in the next nine years.

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