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Business News/ Industry / Infotech/  TCS bets on artificial intelligence with Ignio

TCS bets on artificial intelligence with Ignio

Tech firms are investing in artificial intelligence platformsto help clients cut operational costs, avoid human intervention in repetitive tasks

Code-named Neo in the development stage, it took more than 100 scientists from two of TCS’s research and development labs three years to build Ignio. Photo: MintPremium
Code-named Neo in the development stage, it took more than 100 scientists from two of TCS’s research and development labs three years to build Ignio. Photo: Mint

Bengaluru: On 4 June, Natarajan Chandrasekaran, chief executive officer of India’s largest software exporter Tata Consultancy Services Ltd (TCS) flew to New York.

Unlike his earlier visits to the US—the largest market for TCS and other Indian IT firms—he was not scheduled to meet any clients. In the evening, Harrick M. Vin, TCS’s chief scientist and global head of innovation and transformation, and a few other executives joined Chandrasekaran at the upscale Mandarin Oriental hotel in Manhattan to showcase what some within the company bill as one of the most significant technological innovations to come out of the $15 billion company: An artificial intelligence (AI) technology platform.

Code-named “Neo" while in the development phase, it took over 100 scientists from two of TCS’s research and development labs three years to build “Ignio". About a dozen analysts and 20 clients who attended the event called it a “bold vision" after evaluating the benefits promised by Ignio, which TCS expects to start selling both as a standalone product and along with its service offerings in the coming months.

Meanwhile, it is 6pm in Palo Alto, 3,000 miles (4,800km) away from New York. In a nondescript facility of Infosys Ltd in an area housing the offices of some of the world’s most innovative firms, Abdul Razack, the head of platforms, still has work to complete. Razack has met with one of Infosys’s large clients and also got an update from his 80-member team in Bengaluru on the progress of an AI platform he is spearheading. A few hours later, he has an important meeting with Navin Budhiraja, head of architecture and technology, on the future of this platform.

Back in Bengaluru, about 8,300 miles (13,280km) from Silicon Valley, it is Friday morning, and K.R. Sanjiv, Wipro Ltd’s chief technology officer, is getting ready to start his day. One of his must-do things is to get an update from his team on the company’s first AI-powered platform, Holmes—or “heuristics and ontology-based learning machines and experiential systems". Wipro, which has been struggling to match the growth of TCS, surprised many industry watchers last month when it took the lead in unveiling the first AI-platform, Holmes. It expects to offer Holmes to up to one-third of its 1,000-plus clients in the next 24 months.

Together, TCS, Infosys and Wipro recorded revenues of over $30 billion for the year ended March, accounting for about one-fifth of the country’s $146-billion IT industry. However, as commoditized back-office maintenance work comes under intense pricing pressure, home-grown software exporters are investing in embracing new technologies, including automating a lot of their internal processes and building AI-powered platforms, hoping it would be a key differentiator when they vie for outsourcing contracts against their global peers, including Accenture Plc., which posted a revenue of $30 billion last year.

“Arguably, AI is the next-generation of outsourcing and one of the biggest productivity improvement levers in the next 10 years," said Ralf Dreischmeier, London-based senior partner who heads the technology practice at The Boston Consulting Group. “For all large outsourcing firms, it is an absolutely necessary move to invest in these AI platforms as it can be a key differentiator in many of the upcoming renewal negotiations and for new deals, where clients expect digital solutions for their outsourced services and process as they (the clients) digitize their core business".

India’s largest software exporters are investing heavily in building these intelligent platforms aimed at helping their clients cut operational costs and avoid human intervention in repetitive basic tasks. Currently, their clients spend about half of their total expenses on wage bills.

Also, unlike Amelia, the humanoid AI platform launched by New York-based IPsoft, these platforms are underlying computer systems on which application programs run.

For this reason, analysts like Charles Sutherland, executive president of IT outsourcing research at US-based HfS Research, believe the better comparison is with IPsoft’s IPcenter—software which identifies, diagnoses, and learns from issues in IT infrastructures without human participation.

While TCS expects machine-learning Ignio to help its clients build applications quickly, both Infosys and Wipro believe their AI-powered platforms will help them get more business from existing clients and win new outsourcing deals.

“For TCS, Ignio offers a differentiating delivery and strategy planning capability for infrastructure management today (application and business process management in the future) in what has been a very challenging and competitive service market," said Sutherland of HfS Research.

Although the details of Ignio remain sketchy, a senior TCS executive said this platform will help the company raise its share of the infrastructure practice. TCS’s infrastructure practice recorded more than $500 million in revenue in the January-March period and has already displaced Wipro and Noida-based HCL Technologies Ltd as having the largest practice in maintaining back-end IT infrastructure for computers.

Back at Infosys’s Palo Alto centre, Razack, who left SAP AG and joined Infosys in October, remains confident that the firm has started well and should help chief executive officer Vishal Sikka achieve his aspirational goal of generating $2 billion in revenue from technology platforms and products line of business by the year 2020.

“Nobody has a significant headstart in this and we believe that we can be the leaders (in the next 12-24 months)," said Razack, who first started work on building the open source data analytics platform—Infosys Information Platform, or IIP—last October. At Infosys, the focus is to build platforms in three areas: data analytics, automation and AI. Budhiraja, who became a celebrity in his hometown Bhilai, Chhattisgarh, in 1984 when his picture was plastered on billboards after he topped the Indian Institute of Science entrance test, defines everything around a platform. Budhiraja and Razack, along with a core team of 200 engineers, helped Infosys launch its IIP in January this year, with a claim of helping companies make sense of the millions of structured and unstructured data sets.

Currently, Infosys has about 100 ongoing projects running on IIP.

“The automation platform (Infosys Automation Platform, or IAP) sits on top of the IIP," said Razack, who said the platform is being used for a dozen-odd engagements with clients, and “in coming months" the company will unveil its AI-powered platform which will sit at the top of IAP.

“So, one intelligence team would sit on top of it (IAP), and which mines the data that is collected by the base platforms, and helps interpret whether it is machine learning or through natural language processing. Any of the customers could use the entire platform, or say that they are interested in the automation part or the intelligence part or the information part," explained Razack.

Although for now both TCS and Infosys are coy about sharing the investments being made in building these technology platforms, Wipro has spent over $400 million over the last two years on building at least 10 such new-age platforms that focus on disruptive technologies, including cognitive technologies, automation and machine-to-machine learning.

Last August, it integrated many of these platforms, which resulted in the birth of Holmes, Sanjiv said last month.

“Beyond the vision and the investment, I’m very encouraged," said Eric Simonson, managing partner of advisory firm Everest Group. “It reminds of the original offshore ADM model (application development model) of starting small and simple, and expanding as the client can digest more".

Some analysts such as Thomas Reuner of HfS Research, however, add a word of caution:

“At this point in time, the market is still in its infancy and service providers need to start educating the market on the implications of these," said Reuner.

Reuner’s point is validated as International Business Machines Corp.’s (IBM’s) cognitive supercomputer Watson has brought less than $100 million revenue in the last two years. However, according a 16 October 2013 conference call, IBM expects Watson to start earning $10 billion in annual revenue in 10 years.

For now, clients are encouraged by these investments made by the IT vendors.

“Infosys recently shared with us their new Infosys Information Platform and we are quite impressed with this new capability and especially the speed it offers to organizations like ours, to ingest diverse data sets, and harmonize and link them together to derive insights," said Carlos E. Amesquita, chief information officer of chocolate maker Hershey Co. “We are excited to be engaged with Infosys using IIP to further build our capability to turn diverse data into knowledge and insights."

Back in New York, as the TCS event ended, one of the retail clients emerged happy, though slightly cautious.

“The management did mention having done a few pilots with Ignio, but we’ll wait to see its full promise. If it can deliver, it certainly is huge," said the chief information officer of a US-based utilities firm.

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Varun Sood
Varun Sood is a business journalist writing on corporate affairs for the last fifteen years. He also writes a weekly newsletter, TWICH+ on the largest technology services companies. He is based in Bangalore. Varun's first book, Azim Premji: The Man Beyond the Billions, was brought out by HarperCollins in October 2020.
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Published: 08 Jun 2015, 07:42 AM IST
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