The AIM-listed IT solutions provider said that the move will result in an immediate 40% rise in revenue from the client as part of a growing shift towards adoption of its SaaS offering.
Instem said the 40% increase was a typical outcome of companies transitioning to the SaaS model from on-site installations.
The group added that the shift towards the SaaS-based revenue model will ultimately deliver an expansion to operating margins in-line with similar cloud-based delivery models.
For the 12 months to 30 June 2017, Instem reported £3.4mln of SaaS revenue and £9.6mln of non-SaaS revenue.
Instem chief executive Phil Reason said: "The transition to SaaS across the regulatory life sciences industry has been quickening in recent months after initial concerns over data security and the generally conservative nature of the participants.
He added: “However, both existing clients and new prospects are now fully recognising Instem's leadership in this area and with GDPR coming into effect in May of this year we anticipate strong growth in SaaS revenue."