PepsiCo signs $500 million IT deal with HCL Technologies, dumping HP

Beverages vendor PepsiCo has signed a $500 million IT outsourcing deal with HCL Technologies, dumping HP.

The fourth-largest Indian IT services firm has confirmed the seven-year IT deal. But it does not want to share more details including the size of the contract.

HP is not available for comments.

PepsiCo says changes to its global IT organization will enable the beverages firm to stay competitive while meeting the needs of its business.

PepsiCo had signed a $100 million deal with IT service provider HP in 2006 for managing its data center operations. The contract, which came up for renewal last year, was pursued by the country’s largest IT firm TCS and Cognizant, according to a Times of India report.

PepsiCo taps HCL Technologies
PepsiCo has had long-term engagements with a host of IT service providers in the past. It signed a deal with IBM in 2011 for finance and accounting. It had also signed up with The Portland Group for procurement, Kuehne and Nagel for BPO services and Hewitt largely for HR, the report said.

HCL’s infrastructure services grew 5.1 percent sequentially in Jan-March quarter, riding on the pent-up demand for rebids or renewals.

IT advisory firm ISG said $114 billion worth of IT contracts are set to expire in 2014, up 4 percent from 2013 and up 19 percent from 2012. A large number of deals are infrastructure-only contracts with a total value of $48.6 billion this year alone.

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