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Business News/ Industry / Infotech/  IT firms invest in dedicated cloud solutions to win deals
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IT firms invest in dedicated cloud solutions to win deals

The strategy appears to be paying dividends as digital revenues of IT companies see an uptick

Cloud is typically clubbed under the digital revenues of IT companies. istockPremium
Cloud is typically clubbed under the digital revenues of IT companies. istock

IT services companies such as Infosys Ltd, Wipro Ltd, Cognizant Technology Solutions Corp., Tata Consultancy Services Ltd (TCS), and Mindtree Ltd are investing in building cloud-specific solutions to win large deals from clients looking to modernize their existing infrastructure.

Infosys, as an example, launched a dedicated cloud offering named Cobalt in August last year. Infosys’s Cobalt is a set of services, solutions, and platforms to help clients, mostly large enterprises, build new cloud-first capabilities.

In July, Wipro said it will invest $1 billion to strengthen its cloud technologies, capabilities, acquisitions, and partnerships over the next three years. As part of this, it has launched Wipro FullStride Cloud Services, which brings together the full portfolio of Wipro’s cloud-related capabilities, offerings, and talent.

Mid-sized IT firm Mindtree is investing in dedicated Industry Cloud delivery centres for its core verticals—retail, consumer products and manufacturing (RCM); travel, tourism and hospitality (TTH); banking, financial services and insurance (BFSI); and communications, media and technology (CMT). Cognizant, too, has bolstered its cloud portfolio with strategic acquisitions and organic investments.

Cloud is a strategic focus area for Infosys, according to Narsimha Rao Mannepalli, head of cloud infrastructure and security solutions, Infosys. “Infosys Cobalt has been very well received in the market and is seeing a lot of traction. In the past year, Cobalt has helped us win large and strategic transformation deals in the market. Some of our biggest deals like the Vanguard, Daimler, Spirit AeroSystems, SPS, and many more were driven by Cobalt," he said.

The strategy appears to be paying dividends. Cloud is typically clubbed under the digital revenues of IT companies. Infosys’s digital revenue grew 42.1% in constant currency and contributed nearly 54% to the company’s total revenues for the June quarter. Cognizant’s digital revenue grew 20% annually and contributed more than 44% to the total revenues as of the June quarter. Companies like TCS, Wipro, and Mindtree no longer call out digital revenues separately.

Mannepalli added that Infosys has built “a lot of capability, talent, scale, and credentials in the digital and cloud space over the years. We continue to invest organically and inorganically based on our growth and strategic road map. Our recent acquisitions, Carter Digital, Kaleidoscope, Guidevision, Simplus, etc., are all supportive of this road map".

Similarly, Wipro has seen “consistent growth" in its cloud business and employs over 79,000 cloud professionals and more than 10,000 people certified by leading cloud service providers. Over the past 12 months, Wipro has announced significant cloud-related wins with Telefónica Germany/O2, Verifone, and E.ON, in addition to Metro AG, one of the largest deals inWipro’s history.

According to Suresh Uppalapati, global head, enterprise IT and cloud services at Mindtree, “Each delivery centre will combine industry domain expertise with cloud skills to enable us to better serve each specific industry and develop business-aligned offerings and products. Over the next three years, we will expand these delivery centres to several thousand resources."

While clients may be already using other cloud providers like Amazon Web Services (AWS), Google Cloud, or Microsoft Azure, these integrated offerings from IT services companies have their own value proposition. “They help by providing a one-stop-shop to expedite customers’ cloud journey, integrate multiple clouds, and scale up. Most IT services companies are partnering with these hyperscalers to provide tailored solutions to meet specific client requirements," said Sanchit Vir Gogia, founder and chief analyst, Greyhound Research.

Rajesh Nambiar, president, digital business and technology, Cognizant, too, corroborated, “Our growing ecosystem, our commitment to co-innovation with the world’s top three hyperscalers, and a focused go-to-market strategy is driving our momentum."

Last year, TCS launched new cloud practice units to compete in the rapidly expanding opportunity around the three major hyperscale platforms—AWS, Azure, and Google Cloud. Most recently, TCS launched Google Cloud Garages to helpenterprise customers evaluate cloud solutions, prototype applications, and apply analytics to address business opportunities.

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Updated: 20 Aug 2021, 12:29 AM IST
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