Nordic industrial giants continue to choose Indian suppliers for digital transformation

HCL signs new deals with Volvo Cars and Equinor as India-based IT services suppliers continue to grow in the Nordic region

Two deals have been signed between Noida, India-based HCL and major corporations in Sweden and Norway, providing further evidence that Indian IT suppliers are forging ahead in Nordic markets.

In fact, these deals are expansions and extensions to existing contracts, demonstrating that the Indian IT supplier’s successes are not one-off wins, but stable, ongoing partnership-type arrangements.

The first new deal is between HCL and Equinor, which is based in Stavanger, Norway. Equinor is the largest supplier of oil and gas in the Nordic energy market and the biggest offshore operator in the world. It was originally known as Den Norske Stats Oljeselskap AS-Statoil (the Norwegian State Oil Company), but changed its name to Equinor in 2018.

The deal with HCL incorporates the renewal of an existing IT operations and transformation agreement. The multimillion-dollar deal covers IT infrastructure and cloud services, with the aim of helping Equinor to maintain an efficient workplace and reliable IT operations while supporting the company’s cloud initiatives.

Manoj Chandra Jha, analyst at technology research firm ISG, has followed the HCL-Equinor relationship closely. He said: “HCL and Equinor have a seven-year-old relationship and, during this tenure, HCL has built a credible position with deeper understanding of the oil and gas industry in the Nordics market. This contract is a significant move on the HCL-Equinor relationship and also validates HCL's understanding of the Equinor business.”

Jha added: “As part of the strategic deal, HCL is expected to focus on IT infrastructure and cloud services, which will help Equinor in enabling an efficient workplace, consistent IT operations and support its various digital initiatives. Under the next-generation services, HCL is likely to support Equinor’s digital transformation initiatives by accelerating its cloud journey and elevate the personalised user experience.

“As the two organisations have been strengthening their relationship over the years, HCL is expected to continue identifying new working models to bring more agility and offer a robust platform for digital transformation initiatives.”

The second recent deal for HCL is with Volvo Cars of Gothenburg, Sweden. Again, this is the renewal and expansion of an existing contract, rather than all-new business. HCL will supply end-to-end IT services, including provision of part of Volvo’s digital transformation programme. The existing collaboration between the two organisations will expand to include various elements of digital transformation, including product orientation, DevOps and application integration.

Read more about IT services in the Nordic countries

  • Norway’s biggest bank has outsourced IT operations to Indian service provider HCL in a seven-year deal worth $400m.
  • Wipro, one of India’s big four IT services providers, is to expand its workforce in Scandinavia and has appointed a local executive to lead its operations in the region.
  • HCL has established a team in the Nordic region, one to cover Germany, Austria and Germany, another for France, a team to look after the Benelux, as well as an Italian outfit.

Commenting on the deal, ISG’s Jha said: “HCL and Volvo Cars have been successfully working together on IT transformation since 2016. The two organisations are expanding to include numerous aspects of digital transformation initiative programmes, including DevOps and application integration. Volvo Cars selected HCL as one of its IT service providers for its ongoing digital transformation initiative.”  

Jha added: “The core objective of the large-scale transformation programme initiatives includes organisation-wide technology shifts that will help Volvo Cars to capitalise on new opportunities to improve internal business processes and customer experiences. It will be interesting to see how HCL will enable Volvo Cars to drive its digital transformation ambitions. As HCL offers strong automotive domain experience and digital capabilities, the two organisations are expected to continue strengthening their relationship in the future.”

HCL has been active in the Nordics for many years. In common with other India-based IT suppliers, such as TCS, and suppliers that are making use of Indian expertise and resources, such as Capgemini, HCL continues to make significant inroads into the Nordic markets. As reported in a previous article, this growth is not necessarily at the direct expense of local Nordic IT suppliers, many of which continue to grow or at least stabilise their own revenue.

However, the overall market is expanding and Indian suppliers appear to account for most of that growth. In real terms, the market share of Nordic suppliers is falling back in Nordic countries when compared with the market share of Indian suppliers.

The HCL deals with Volvo and Equinor illustrate further consolidation in this respect. Both companies could have selected local suppliers to fulfil their IT requirements, but both chose to stay with an Indian firm, leaving executives at Nordic IT suppliers wondering what they need to do to remain competitive.

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