Small Contracts Are A Big Deal For IT

IT firms may see a shift to smaller deals from large ones earlier, as clients engage more vendors to execute digital projects, analysts said. The average timelines and values of large deals, too, have shrunk, they said. While the timeframe has reduced to three years from five before, deal sizes have also fallen to $15 million from $30 million a few years ago, they said.

Companies like IBM, which did not compete in the mid-market segment, are now aggressively betting on it, said Sanchit Vir Gogia, CEO of Greyhound Research, a technology advisory firm. “IBM signed up 1,050 customers in one year alone in India, these are mostly midmarket customers,” he said. 

Automation, in terms of integration and maintenance of applications, has increased, and consequently, clients require less money to manage applications. “Any deal above $50-100 million then becomes the first to be cut down, sliced and diced,” Vir Gogia said.

[Economic Times]


Analyst:

Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.

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