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    Mindtree gains as digital goes mainstream

    Synopsis

    From an IT services industry perspective, Digital business is estimated to touch $225 billion by 2020 with $ 48 billion predicted for Indian IT Services firms.

    ET Bureau
    BENGALURU: Mid-sized IT firm Mindtree says that as digital offerings become mainstream there is an uptake in customers moving from small-scale pilots to a more scaled implementation of digital.

    “The trends in digital is clients who had taken small digital engagements have completed it and now doing it on a much larger scale,” said Rostow Ravanan, CEO of Mindtree. “From $500,000 pilots clients have now moved to $5 million scales in digital projects to touch more brands and geographies.”

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    From an IT services industry perspective, Digital business is estimated to touch $225 billion by 2020 with $ 48 billion predicted for Indian IT Services firms. Even larger peers have observed that digital deal sizes are increasing. But the point out that as size increases, the deals are moving away back from specialised smaller vendors to the larger vendors.

    The Bengaluru-headquartered company seems to differ in its opinion. “We are going ahead and winning more deals and taking market share away from other players... There is some benefit we got by consolidating business from competition to Mindtree by showcasing better efficiency and reliability,” Ravanan said.

    For the quarter ended September 2017, Mindtree signed deals worth $207 million. A jump from $183 million for the same quarter from a year ago, but a sequential drop of $55 million.

    Contracts in digital for the quarter gone by stood at $ 84 million as compared to $64 million from a year ago. The excitement for digital stems from the view that 90% of all incremental spend in the next five years on IT will be on Digital. “Digital wins are getting bigger and we will continue to grow faster than the industry average,” Ravanan said.

    Ravanan said client requirements have also evolved pushing them to take two different approaches to run the business and grow the business. “When contracts come for renewal, if it is a run the business project, there is emphasis on cost reduction. Here the approach we take is bringing in process redesign, automation.”

    On the other hand, “In grow the business, price is not a criteria since you are helping them increase revenues. It is the expertise that counts.”

    Ravanan said that even for traditional services like support and testing there is a lot of acceptance for Mindtree, a shift in trend since those kind of opportunities historically go to their larger peers.
    The Economic Times

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