We have seen highest bookings in 5 quarters: HCL Tech CEO C Vijayakumar

HCL Technologies, which reported a high sequential revenue growth of 5.6 per cent in constant currency in the October-December quarter, is betting big on its intellectual property (IP) offerings by acquiring some IBM products for $1.8 billion in December last year. The Noida-based company’s president & CEO C Vijayakumar told Neha Alawadhi that it has no plans to spin off its IP-led business into a separate unit and would continue to focus on its products and platforms strategy. Edited excerpts:

How do you look at macro issues like playing out in the markets you operate in, the US with its visa issues, Brexit and the US-China trade war?

The global scenario can play out in two ways for businesses like us. One is digital transformation programmes and how much money is going into digital transformation. Today, digital transformation spend is no longer discretionary. Top executives in our client organisations recognise that continuing to spend on the right digital programmes is very important for their mid and long term business viability. So, I don’t see them cutting down on critical projects and we are doing a lot of critical programmes for our clients. Then, there could be a slowdown in some economies which could affect some of our clients. Like a slowdown in China can impact a lot of companies in the US for which China is still a big market. Then, they may be under cost pressure. Even in that scenario, they would tend to leverage providers like us who can bring efficiencies and the best of automation so that we continue to be relevant. We have built a good set of products and services which are weather proof from different scenarios.

You’ve had the best deal bookings this quarter. Where is the spend coming from?

This is the third time we are getting the highest bookings in the last five quarters. Spend is across the board. There is an uptake in spend in financial services and the technology and services segment. In retail and CPG, we are working with many leading brands in not only running their IT landscapes but also significantly modernising them. Lifesciences and healthcare have also been stable. Telecom is a big area for us as a lot of service providers are looking at how they can leverage 5G. Obviously, they’re trying to optimise the cost in some traditional areas. That is an opportunity for us.

How is the industry shaping up, given the talk of consolidation among smaller players like Mindtree and NIIT Technologies?

I do believe that the IT services market is very large and has space for a number of players. Whoever can focus and create a niche and differentiated offering and positioning have a very strong and viable business. Of course, every company is in a different phase of life and have to do what is good for businesses.

What about your IP strategy after the IBM product acquisition? What is your long-term plan in IP, considering it is a difficult market?

It’s a very interesting market that provides the opportunity to be innovative and client focused. The IPs that we have acquired are very mission critical for our clients. For example, in the commerce platform that we have acquired, there are a number of companies where 30-40 per cent business flows through this platform and it is integral to their business. Customers are looking at how this can be modernised. In isolation, this IP strategy is very good for building a products business. It is also helping us launch a number of as-a-service offerings, where we provide end-to-end technology and operations.

How is manpower structured around the deal? Have you also acquired people as part of the pact?

Yes, we will be acquiring people. As part of the transition, some will be transferred over to us and we would also continue to expand some of the teams, especially from India, so that we can get more bandwidth to modernise and develop these solutions.