Liberty Global has agreed a €1.5bn outsourcing contract which will see Infosys take over the operation and development of its core entertainment and connectivity software platform for the next five years.
This adds to an existing three-year relationship with Infosys covering core operational IT services.
The deal will also mean Infosys can license the Liberty Global software platform, known as Horizon, to other customers. Telcos and companies in the sector can get licences to use Liberty Global’s connectivity and entertainment software through Infosys with the Indian supplier packaging services around it.
More than 400 Liberty Global IT staff will move to Infosys in a contract which includes an option to extent the five-year deal by another three, which would take the deal value to €2.3bn. Workers are in locations including the Netherlands and the UK.
Enrique Rodriguez, chief technology officer at Liberty Global, said the company currently runs “end to end the development, operation and definition of the roadmaps of its platforms”.
He heads up a team of about 1,000 people working on writing, defining and operating the code, but the new agreement will see this change, with Infosys taking over the development and operation of the software, while Liberty Global’s team will retain control of roadmaps.
“What we have done with the deal is retain the roadmap definition, defining what the product does and how it does it, and we have outsourced the development and operation of the platforms to Infosys,” he said.
The decision to outsource these services to Infosys was made to increase scale, improve efficiency and enable Liberty Global’s IT team to focus on emerging technology that can benefit the business, according to Rodriguez.
“We think that in order to continue innovating we need access to more scalable development and operations,” he said. “Today we do all that work in-house, and while that provides flexibility, it creates restrictions, because I cannot change the size of that team as fast as I would like. Through Infosys, we gain access to a bigger team that we can use to continue to bring innovation to the platform. Infosys also gives us a bigger global footprint and do the work with better efficiency, and we will achieve cost improvements as a result.”
Meanwhile, the deal will allow the business to focus on other more advanced areas of technology growth, such as artificial intelligence, said Rodriguez.
He described the licensing agreement with Infosys as being “very important”. “We currently develop our platforms such as Horizon only for Liberty Global operating companies such as Virgin Media and Telenet, and only these companies use them,” said Rodriguez. “Part of the agreement with Infosys is that they will have the ability to sell these platforms to other companies.”
Liberty Global will get the licensing fees and Infosys will offer services around them.
Liberty Global expects to save €100m a year as a result of the outsourcing contract. Part of this will be from the transfer of staff to Infosys. A smaller previous deal with Infosys in 2020 saw 200 of Liberty Global’s staff move to the IT supplier.
“What we have seen is that these technical employees now have the ability to not only work on the Liberty Global contact but to be used by Infosys to offer their technical skills to other clients,” said Rodriguez. “This has led to significant career opportunities for these folks, and when we look at the retention rate of employees that went to Infosys, they are better than the people that stayed at Liberty Global.”