Cheaper SAP deals pledged

It will now hit the market promising deep discounts compared with traditional players

The market for installing German software firm SAP's complex enterprise products has long been known as one fraught with cost and implementation time blowouts.

Describing the $US23 billion global SAP services market as "overstated and overcharged", HCL CEO Vineet Nayar said the Axon/HCL entity would offer prices at least 20 per cent lower than had been normal so far.

He would also offer fixed-price implementation contracts and risk/reward plans where Axon/HCL would take a share of cost savings.

"We see an opportunity for a new company coming into the SAP services market and offering more transparency and more skin in the game," he said.

The new entity, the result of the largest overseas acquisition so far by an Indian IT outsource firm, would hit the market almost immediately.

"We do not plan to integrate Axon into HCL. This is a diverse merger. We have merged the HCL SAP practice under the Axon leadership, so it will roll from day one."

Mr Nayar said there were about 200 Axon employees in Australia and he expected that number to increase, despite the economic crisis.

About 80 per cent of Axon/HCL SAP work for Australian firms would be done in Australia and 20 per cent offshore.

He said Australia was HCL's fastest-growing market and it had had cut three major SAP deals here in the last two months. Mr Nayar would not give details of those.

While HCL had been in talks to buy Axon for months, its Bangalore-based rival Infosys offered $US753 million in cash for Axon a month before HCL went public with its bid in September.

The Infosys all-cash bid gave the deal the credibility HCL needed to get funding from banks that had been hesitant to support HCL.