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Photo: Abhijit Bhatlekar/Mint
Photo: Abhijit Bhatlekar/Mint

Software services firms bet on digital business amid slowdown

Infosys is seeing an uptick in demand for certain areas of digital with many people working from home

Software services companies in India will intensify their focus on digital business streams to generate revenues as the segment continues to grow even amid the covid-19-induced slowdown.

Though every company interprets “digital" differently; cloud, cyber security and data analytics are generally categorized under this vertical.

Wipro Ltd, for instance, does not limit the definition of “digital" as a technology play. “For us, it is about strategy, design and technology delivered in new ways of working. We believe digital is about transformation and that is our primary lever for categorization," Rajan Kohli, president, Wipro Digital, told Mint earlier. “All organizations have understood right now that migrating to cloud is one of the best things that have happened for them. The organizations that have moved to cloud have been able to respond to this crisis very well," Wipro’s chief operating officer Bhanumurthy B.M. said on a recent earnings call with analysts.

Infosys Ltd is seeing an uptick in demand for certain areas of digital such as virtualization and cloud with many people working from home. “Virtualization, cloud, workspace transformation, all form part of digital and they are one of the elements of digital, wherein we will see some traction, anything that helps clients to move more and more of their work into the remote working approach," Salil Parekh, CEO, Infosys, said during a recent earnings call.

India’s largest software services company Tata Consultancy Services Ltd (TCS) also called out particular areas of digital that it expects to grow.

“There will be specific areas such as security, cloud migration, like rolling out these new-age, what we call distributed digital workspaces, which require a very strong binding between consulting and execution. Those are the kinds of consulting areas that will be in demand," Rajesh Gopinathan, CEO, TCS, said addressing a Q4 earnings call.

Evidently, digital revenues have been consistently growing for these firms. Infosys’ digital revenues grew 31.7% y-o-y, contributing 41.9% to the total revenue for Q4. Wipro’s digital business grew to 34.6% y-o-y to contribute 41.2% to its overall revenue in Q4. TCS has removed digital as a separate classification citing overlap between its core and digital offerings.

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