TCS Will No Longer Be World’s 3rd Biggest IT Firm Because Of This Surprise Reason!

Many speculations about Tata Consultancy Services (TCS) losing its status as the third-largest IT services player in the world are going on due to the surface of this latest merger.

Expected Merger Between Atos And DXC Technology

Last week, French IT services giant Atos announced a ‘friendly’ merger with US-based DXC Technology. 

If these majors plan to go ahead with the deal then it could overtake both IBM Services and TCS to become the world’s second-largest global IT service provider (behind Accenture) by the end of the year.

Last week, Atos informed that it has approached DXC for a deal to create a digital services leader benefiting from global scale, talent and innovation.

TCS Retaining Its Position

Out of the two firms, Atos had annual revenue of €12 billion (about $14.6 billion), on the other hand, DXC’s stood at $19.58 billion.

After the success of this deal, Accenture will be the number one player followed by Atos in the second spot.

This will mostly impact TCS, as considering the current revenues, TCS will reduce to the fourth position in the pecking order after IBM.

Although, market analysts are suggesting the possibility of TCS overtaking IBM (after the US firm’s Global Technology spin-off) by the end of the year to retain third place.

What Does The Expert Say?

The Atos-DXC transaction could form the world’s second-largest global IT services vendor, closer to the size of Accenture ($45 billion revenue in 2020) and larger than TCS ($22 billion revenue in 2020), according to Elitsa Bakalova, Senior Analyst at research firm Technology Business Research, Inc.

Further, Atos has scaled up by making larger-scale acquisitions. 

Prior to this, it has acquired Siemens IT Solutions and Services (roughly 26,300 employees), Xerox’s ITO business (9,600 employees) and Syntel (23,500 employees, with most of them in India).

With the addition of DXC Technology, it will further gain scale in the US.

This is something the company has been pursuing in fits and starts over the last five years, mostly through acquisitions and changes in leadership in North America, Bakalova said.