Speed and ability to execute correctly will determine sucess of Indian IT

 India's IT industry is going through its biggest transitional period since the dotcom boom, with technology and business models facing disruption from newer areas like cloud computing and artifical intelligence. In an interview with , talks about the disruptions facing Indian IT firms such as TCS, Infosys and Wipro and what they need to do to adapt. Edited excerpts:

When it comes to Indian IT services, what really is happening there?

I think it is important to see the changing behaviour among end-users, the buyers of services. I think we've gone through a series of years in which the buyers, the end users in IT organisations have been looking to get out of larger, long-term services contracts and transition more to shorter contracts. I think if we look at growth, it is still very much driven around the fact that end-users are looking at that. The second thing is, it's very clear that the end user is looking at splitting up their approach to IT -we're seeing this significant drive towards what we call bimodal IT. When it comes to services, they need one set of services -it is all about stability, the robustness of what you offer and security. Those kinds of services are not growing because end users are looking to get these services cheaper, leading to stagnation of revenue and margin pressure. That is what is being reflected among Indian service providers.

 

When it comes to Indi ..

Is the traditional outsourcing model becoming redundant, amid the advent of automation and the disruption from the cloud?

I actually see substantial opportunity for a services model going forward.But it is in a world that is very different and may require a different set of skills, among the service providers. You're seeing substantial growth in core business functions around the usage of cloud -it's not just extending what you've been doing. The second thing is that you're starting to see hybrid providers that are emerging in particular verticals. If the traditional service providers don't have a way to support these business functions that are cloud-based solutions, that's when they'll start to see pressure .

How big a threat to the traditional technology services model is the rise of AI based automation?

I think looking at the few vendors that are out there, whether it's IBM with Watson or IPSoft or others that are developing products that can replace repetitive user functions, can make an impact. But if you look at the much bigger picture, the opportunity is more significant. What is really happening is that algorithms are taking over the world.

Are Indian IT services firms making the right futuristic bets right now?

I think all of them are aware of what's happening and I think all of them are looking at retooling or reskilling what they do -I don't think they are unaware and they don't know what to do. I think it's the speed and the ability to execute correctly that will determine the success.