Days after bagging the $2.1-billion Verizon deal, C Vijayakumar, CEO and MD, HCLTech, in a recent investor meet, said that the company will see an incremental growth going forward as the market has bottomed out.
“While a lot of us got impacted due to a cut in spend of late, it is not true that a big part of the tech spend got cut,” Vijayakumar said at the the JP Morgan APAC IT Services C-Suite fireside chat held on August 30.
Despite its lacklustre June quarter earnings, the third-largest IT services firm maintained its revenue guidance of 6-8 % for FY24 in constant currency. It also maintained its guidance for operating margin between 18-19% for FY24.
Speaking about Generative AI, Vijayakumar said that Gen AI is providing one more growth opportunity for service providers. “For clients to leverage Gen AI, they need data strategy to be in place. They also need to do data transformation. Cloud is also an important component to make your Gen AI capability realisation much more holistic. Security and privacy become much more important. All of these core components that need to be in place, and they provide sweet spots to the IT service providers.”
Elaborating on the Verizon deal, he said the deal is a very unique service deal. The deal is not about servicing an internal IT organisation or an internal business process transformation. “It is all about the services that Verizon offers to all its enterprise customers. The enterprise networking services that Verizon offers to its end-customers, who are more than 1500.”
He added, “Network transformation is becoming super critical for these clients, especially with much more cloud adoption, the dynamic nature of demand that is placed on these networks is very high.”
He explained that some of the traditional way of doing it is getting transformed. “We are becoming a strategic partner for them. We are taking over a lot of managed network services – deployment operations, modernisation, automation, using automation platforms.”
He further stated that the Verizon deal is a 100% services deal. It doesn’t have any assets and software hosting. “Some of the Verizon’s works were in-sourced and some of them were outsourced, which is now getting consolidated into one single partnership with us.”