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Like its rivals, HCL Technologies, India's fourth largest information technology services company, reported robust earnings in October-December, usually a weak quarter. HCL chief and president, Anant Gupta, spoke to Surabhi Agarwal about short-term trends in technology spending. Edited excerpts:
Is HCL getting more cautious than others in its optimism about demand reviving?
We are buoyant on the market opportunity. But the question is if there is a change in the perception versus the past quarter - the answer is, no. So, we are as gung-ho on the rebid market on the run-the-business (non-discretionary) side. We see some early signs of revival in discretionary spending. Because, at the end of the day, we would like to see this as our traditional market.
Which areas performed well?
The demand in financial services business continues to be driven by a huge need to drive transformation and, therefore, firms in the sector will continue to spend. The scale of complexity in financial institutions will be a lot more, given the scale of their problem is also much higher. The amount of money banks and financial institutions are talking of investing is quite large. Besides, demand from manufacturing continues to be buoyant. Public services have emerged as key, which could open up a much larger market.
There's a talk of your tie-up with CSC being a precursor to a merger.
There is absolutely no M&A and no inorganic play. Through this partnership, we are targeting large corporations. There is an opportunity to partner and create a market that we believe can be a large Blue Ocean space (uncontested market for an unknown industry or innovation). So, the objective of this alliance is clearly to target the application modernisation cloud enablement journey for our customers. We will compete at other places as required.
Since rebid has been the focus for HCL Tech, will some of your bids be hit after the CSC partnership?
I don’t think so. At the end of the day, whatever you do, you do with the customer in mind. If the customer sees the value in a joint proposition, they will accept that. In the infrastructure space, we anyway have an ecosystem of partners in terms of data centres, cloud, etc. In storage also, we work with three-four large players.
So, should we expect more partnerships?
Absolutely. You will keep hearing of such partnerships, not just in infrastructure services but in the application space as well. Digital system integration strategy is a much larger strategy. While cloud enablement is part of it, application modernisation is the other part.
Are you wrried that your bigger rivals, Infosys and Wipro, are getting aggressive in the re-bid business?
No. I think the rebid market is large enough for everyone to participate. All have their own operating models and strategies to win some of these deals. In fact, there are fewer suppliers in the re-bid market today than two years ago. Many of these which were playing in this segment are not present anymore.
