Riding The Next Wave Of Digital Growth
Indian IT services companies are realizing that ‘digital’ is the way to go. They are investing in new technologies such as cloud computing, mobile technologies, data analytics among other and bagging high-margin outsourcing contracts to respond to the growing competition. In an exclusive interaction with CXOtoday, Sanchit Vir Gogia, Chief Analyst and Group CEO, Greyhound Research, discusses the latest digital trends, challenges and opportunities in the IT services space.
Which among the Indian IT service providers according to you (TCS, Infosys, Wipro, MindTree) are at the forefront in terms of their digital strategy and how?
The digital footprint of each of the IT providers is enormously vast. TCS has recently announced their Digital Software and Solutions services offerings which focuses on technologies such as analytics, cloud, mobile and social - is winning larger size contracts and should bring in a ‘few billion dollars worth of revenue’ in the next few years. TCS is grounds-up when it comes to cross industry offerings complimented by a strong portfolio in both applications and infrastructure services.
Infosys on the other hand has a strong application portfolio with a weak backing in infrastructure portfolio. Wipro has been bagging good outsourcing deals; however, their digital offerings are quite weak.
When it comes to mid-sized IT providers, companies such as Mindtree is more focused on tier 2 regions with a focus on a few chosen regions and industries.
What is the “digital” opportunity and how can IT services companies tap this opportunity?
Every Enterprise organisation wants their customer, employee, stakeholders to be a part of this phenomenon of digital. All IT services companies are in the process of acquiring a strategy or specialised skills to expand their digital skills.
The addressable Cloud market in India is expected to hit the USD one billion mark by 2015. This massive growth is being driven by the advent of social, mobile, analytics, and cloud (SMAC) and its quick transition from being a mere buzzword to impacting the delivery of business outcomes for enterprises. Small players that are coming up with specialised products are being acquired by the IT giants.
Greyhound Research recommendations to IT companies is that they should be careful in not spreading themselves too thin. SMAC as a market in emerging markets is massively untapped. The market needs to nurture to reap the desired results and profits.
What are the deal sizes and durations in the “digital” space? From which industry verticals are they coming from?
Enterprises are catching up with the next wave of digital era from analysing individual behaviour to running targeted campaigns there’s a high frame of workload required to process information and results.
In the SMAC stack, do you see any one particular technology which will pick up more than the others?
SMAC – Social, Mobility, Analytics and Cloud, a very common keyword which when broken into individual technologies is just a plain technology that has been there for a while and is being implemented to provide to companies insights about their users / customers. However, if we club them together and run it efficiently, the results are likely to be more insightful, engaging and can help companies customise their products and services.
We are at digital era, where the entire stack compliments each of the technology. Yet, individually, Mobility, Analytics and Cloud are growing stronger.
How do you see digital/ SMAC impact the revenue of Indian IT services companies?
It’s small revenue that’s coming in at present. Once the market matures, Digital will contribute towards 15-20 percent of the revenue in the next 3 years.
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