Q3 throws focus on deal cycle, tenure for India's biggest IT service providers
Subscribe to enjoy similar stories. Bengaluru: Shorter deal tenures, more frequent renewals—that is the scenario India’s top software services companies are likely to face going forward. Independent experts said the shorter tenures are a result of economic uncertainty in advanced markets and the fast-changing nature of modern technologies, and could pose challenges to the IT services companies.
Mumbai-based Tata Consultancy Services Ltd, the country’s largest IT services company, even saw some clients taking lesser time in awarding contracts, with its top executive remarking that the company has seen deal cycles falling by a few weeks. “We looked at deals that are more than $20 million and above, there is a deal cycle reduction also, which also shows that the decision-making is also improving largely," K. Krithivasan, the company’s CEO and managing director, said in a post-earnings interaction with analysts on 9 January.
Pointing out that TCS reported deal cycles shortening in the December quarter compared to the September quarter, Keith Bachman, analyst at BMO Capital Markets, said, “We think this is encouraging with regard to CY25 growth improvement vs CY24." CY refers to calendar year (January-December). Also read | Mid-sized Indian IT companies lead AI charge with new investments TCS’s total contract value or TCV expanded 18.6% sequentially to $10.2 billion for the quarter ended December 2024. This includes existing contracts and new projects.
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