Despite the COVID-19 impact, some of the Giants in the IT services companies reported prominent growth from the digital business in the June quarter. Pandemic has rather surged the transition towards work-from-home with increased demand on the use of cloud, collaboration and cybersecurity-related technologies.
Blackmore stated, “Digital is definitely mainstream for IT service providers. Comparing digital revenues across providers can be difficult because different providers use different definitions for digital revenue," said Dean Blackmore, senior director analyst, Gartner. “We estimate that in 2019, non-digital IT services revenue was still around 52% of total IT spending. However, by 2023 that will drop to around 31%."
Moreover, other technologies that include the internet of things, analytics, and mobility have also seen a good traction in these times of pandemic. Now, digital revenue has become a major part for most of the IT services companies’ mainstream offerings.
While, Bhanumurthy B.M., chief operating officer, Wipro also said that digital has now become a necessary evil and a mainstream need for Bangalore-based Wipro. He also said that they have stopped classifying digital business separately from the June quarter. “We believe digital has now become a mainstream capability for us and also it has reached a scale where you don’t need to separately call it out as it has become very pervasive for us," he added.
Tata Consultancy Services (TCS) - India’s largest software exporter - has also stopped reporting digital revenues from Q3 FY20 onwards. Rajesh Gopinathan, chief executive officer (CEO) and managing director (MD), TCS said that they have been aiming towards optimizing costs by increasing the adoption of public and hybrid cloud models.
During a post post-earnings call, he also added, “Our pipeline from a digital infrastructure and cloud perspective has actually been the highest in the last many quarters. A lot of the large deals that we see are coming from an accelerated adoption of the core infrastructure and compute fabric transformation which is a key enabler for switching to this mode at a large scale basis."