HCL results reflect a customer drive towards IT efficiency

The Indian IT supplier has reported strong global sales growth.

Indian IT service provider HCL Technologies has reported strong global sales growth in the last three months with Europe growing fastest.

Globally HCL increased its sales in the third quarter by 33.5% to $915m compared with the same quarter last year. This was 5.8% higher than sales in the previous quarter.

In Europe, sales for the quarter increased 34.9% compared with last year and 7.3% in comparison with the previous three months.

Rajeev Sawhney (pictured), head of Europe at HCL, says most of the increased demand is for products and services that help run the business better rather than those that help change the business.

To this end Sawhney says businesses are consolidating services such as application support and maintenance, SAP maintenance and infrastructure services. "Many customers are consolidating these services with one supplier to lower costs and increase service levels," he said.

He says it is too early to say when spending on IT services that change the business will increase.

Lee Ayling, head of the UK Technology Sourcing Team at KPMG, agrees. "IT and outsourcing is a huge component of what companies do to improve how a company is run."

He said he is working on projects with clients to establish where outsourcing and offshoring can make them more efficient. "We are not seeing large-scale system replacements," added Ayling.

He said there are some core system replacement projects under way but these are because the businesses involved have no choice. "These are reactive projects and we are not seeing proactive work."

Read more on IT strategy