India's IT giants see product-led growth strategy as next big opportunity

In a rare sight, heads of India's top information technology services companies shared a stage on Wednesday, brainstorming the health of the industry and the way forward. 

In a fireside chat organised by Nasscom as part of its flagship annual IT event, TCS Chief Executive Officer (CEO) and Managing Director (MD) Rajesh Gopinathan, Infosys CEO and MD Salil Parekh, and Wipro Chairman Rishad Premji agreed that while times for the predominantly export-driven IT industry continued to remain challenging, domestic players operating in the space were going to put a major focus on product-led growth strategy.

The three companies have a combined market capitalisation of more than Rs 12 trillion, and employ around 600,000 staffers.

“Our philosophy is to combine product and services, and deliver them to our clients. We will increasingly see the productisation of services (for the industry),” said Rishad Premji, who is also a former chairman of Nasscom. 

Reflection of this trend is already visible globally, said Gopinathan. "If you see the top three banking platforms globally, they belong to Indian IT services players," he said. Echoing similar views, Infosys’ Parekh said there were different ways in which product business would grow in the coming years. “(For instance) platform-led service offerings in insurance and mortgage (segment) or automation are some of the channels,” he said. 

Infosys’ Finacle and TCS’ BaNCS are the two most popular core banking platforms used by the majority of banks globally.

Once seen as pure-play services players, Indian IT firms are slowly building up their own product and platforms in order to better serve their clients. This approach not only provides better pricing power to them, but also gives an opportunity to monetise these assets separately in the future.

While this strategy would result in a bit of cannibalisation to traditional revenues in the near term, it should not be a matter of concern for investors, they said.

Noting the changes in Indian tech  in the past one decade, these leaders also said India was no longer a destination of global firms for saving costs. “India sits at the forefront of global tech innovation. If you look at the cloud ecosystem, Indian IT firms are leading the race,” said Parekh.