HCL Tech seals $2.1 bn deal with Verizon Business

HCL Technologies Ltd has announced a $2.1 billion tie-up with Verizon Business to offer managed network services to the latter’s global enterprise customers.

“We expect this deal to have a positive revenue impact over the next six years, beginning November,” HCL Tech in a note to the exchanges on Thursday.

The partnership combines Verizon’s “networking power, solutioning, and scale” with HCLTech’s “market leading managed service capabilities to usher in a new era of large-scale wireline service delivery for enterprise customers,” Verizon said in a statement.

Verizon Business (formerly Verizon Enterprise Solutions) is a unit of New Jersey-based Verizon Communications that provides services and products for business and government clients of the communication technology firm.

“Our data-driven service delivery, advanced network capabilities and frictionless customer interfaces, combined with the unique strengths and resiliency of the Verizon network, will enable enterprises to drive better business outcomes and time to market,” C. Vijayakumar, HCL Tech’s managing director and chief executive officer, said.

Shares of HCL Technologies rallied about 4% on BSE in intraday trading on Friday.

While Verizon Business will continue to lead all customer acquisition, sales, and overall planning and development with its customers, HCL Tech will lead the post-sale implementation and ongoing support, the companies said.

To execute the tightly coordinated balance of responsibilities at the enterprise scale, a select group of Verizon Business global customer operations staff will transition to HCLTech, they added.

The Verizon deal is likely to come as a shot in the arm for India’s third-largest IT services firm, following a subdued April-June quarter. It had managed to sign deals worth $1.56 billion in the June quarter against the $2 billion-plus orders that is signed in each of the past seven quarters.

“With their (HCL Tech’s) IT service expertise and ongoing support of our enterprise networking deployments, Verizon Business can modernize our service delivery and simultaneously heighten our focus on helping customers incorporate next-generation technology such as 5G, SD-WAN, and SASE into their operations and their own customer offerings,” said Kyle Malady, chief executive officer, Verizon Business.

SD-WAN, or software-defined wide area network, is a technology for directing and optimizing traffic across an organization’s network, while SASE, or secure access service edge, does the same thing as SD-WAN but with a focus on security.

“IT/OT (information technology/operational technology) convergence is the future of data-centric business operations, and with the fast-accelerating pace of digitalization, customers need a well-coordinated delivery framework to realize that future,” Malady said.