Thursday, August 09, 2007

Outsourcing Shifting to Full Service

Outsourcing firms that once focused solely on providing IT and software development services at a lower cost are increasingly reforming themselves as end-to-end IT infrastructure management firms.

The latest evidence of this trend came this week with the announcement of yet another outsourcing partnership. Through its $600 million acquisition of the infrastructure management services provider, Infocrossing, based in Leonia, N.J., the outsourcer Wipro Technologies hopes to expand its presence in the U.S. and position itself as a full-scale IT services provider.

At $18.70 per share, the deal announced Aug. 6, adds five data centers and approximately 900 employees to the Indian outsourcer, which considers global infrastructure services an important driver of its future growth.

"This acquisition of an industry leader broadens the data center and mainframe capabilities of Wipro Technologies to uniquely position us in the remote infrastructure management space… Infocrossing also brings in significant expertise in health plan and payer management segments," Sudip Banerjee, president of enterprise solutions for Wipro said in a statement.

IT outsourcing and infrastructure services for Wipro, which is headquartered in Bangalore, grew 75 percent in the past year, and the company believes this acquisition will bring in larger orders. The all-cash transaction is expected to be completed by the end of March 2008.