#Technologynews – Do you know the 4 Cs driving the client spending for Indian IT Services in the #newnormal?
Blog: NASSCOM Official Blog
My recent blog “Positive Signs for Indian IT companies as they kick-off their expansion strategy in the #newnormal” highlighted that Indian IT companies are showing signs of recovery in the post covid times as they focus on expansion both through organic as well as inorganic growth.
The 4Cs driving growth in the #newnormal…
Apart from the expansion strategy the other key strategy that is supporting the recovery for the sector is the increased focus on new and emerging areas, which are led by the four Cs – Cloud, Collaboration, Customer Experience and Cyber Security, as they have emerged as the new spending themes for enterprises to support their businesses in the newnormal.
Source: Company Reports, NASSCOM Analysis
… Across large as well as mid-tier companies
Cloud and cybersecurity took the lead digital transformation in the amidst the pandemic situation, with collaboration tools and focus on digital customer experience being the new focus areas driven by remote working and a shift to online, across businesses.
All Cs find a mention as the major spending focus areas across the top providers……
- In its 1QFY21 results conference call, TCS highlighted the three spending things for this quarter as:
- Secure Borderless Workplaces and Collaboration tools as most countries continued to operate amidst lockdowns.
- Customer Experience as with the sharp change in customer behaviour triggered by the pandemic, many businesses were forced to switch to an online mode/an online-only mode.
- Digital Transformation remained a key focus as the pandemic highlighted the need for operational resilience and agility within the enterprise, with cybersecurity and Cloud being leading themes.
- Infosys also highlighted the reoriented client focus towards the new and emerging needs for cloud and digital, cost efficiency and automation, and consolidation discussions. It also expects the digital spend will accelerate, led by cloud, cyber security and customer experience.
- Wipro – Underlined that the demand environment is driven by three ‘C’. The first is Cloud. Second is Collaboration.
- HCL – Witnessed momentum in cost transformation, vendor consolidation, acceleration in digital initiatives & workplace and cyber security are key demand drivers.
…. While cloud led the discussions across the mid-tier companies
- Mindtree witnessed traction in the adoption of cloud and increased focus on digital transformation, workplace transformation, cost takeout.
- LTI highlighted cloud acceleration as a common theme across its verticals as customers focus on adopting digital ways of working.
- Zensar’s focus on client support has been on Digital, Cloud and IT systems as the clients continue to deal with the pandemic.
- Mphasis is seeing majority new investments in the areas of customer experience, migration to cloud, cybersecurity, workplace modernisation and data and data analytics.
This focus on new areas is also a key reason behind a robust deal pipeline of over $10 billion as reported by some of the major companies (See more deal related details in the blog “Optimism returns for Indian IT Services amidst robust deal pipeline”)`, which also forms the basis of a recovery trend for the industry.
“We are seeing many customers focus on front-end transformation, resulting in significant traction for our products and services. The other big investment themes are around driving operational resilience, adaptability and optimization. We signed several large core transformation programs encompassing operations, applications, cloud and cybersecurity. Our Machine First approach, delivered using the Secure Borderless Workspaces model is helping us win such opportunities.” Rajesh Gopinathan, Chief Executive Officer and Managing Director (1QFY21 Results)
Overall, the expansion strategy and focus on new and emerging areas are the key positive indicators driving the recovery expectations for the segment.
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