Tech companies betting big on IT infrastructure services

With discretionary spend going down, Indian technology players are looking at building up capabilities in IT infrastructure services, reports CNBC-TV18's Shreya Roy.

Clients are slashing non discretionary spending and IT firms are fighting to maintain revenues. Many have resorted to strengthening their IT infrastructure services portfolios - what they call their bread-and-butter services - to ride the wave.
Chandrashekar Kakal, senior vice president & global business head - IT services at Infosys says, "The big non discretionary spending is happening towards application development, infrastructure management, and testing. Clients have to spend on this. An estimation is that 60-65% of client spend is being geared towards such services, and the market is continuing to spend on this."
Infosys, for instance, saw revenue contribution from both infrastructure management services and testing services by over 100 basis points in the past year. It plans to launch a slew of new offerings in these areas over the next few quarters beginning with the launch of an infrastructure testing service last week.
"We have more coming up from Infosys in these service lines. It is in the combination of application management and infrastructure management," says Kakal. Wipro also has big plans for IT infrastructure services, which grew by close to 14% over the last year. Almost 60% of its order pipeline is reportedly in this space and the company wants more.
Anand Sankaran, senior vice president at Wipro says, "IT infrastructure services is clearly a growth service line for us. We are investing heavily in creating capabilities around IT infrastructure services. In the backend, we are looking at tools and automation to improve our delivery capabilities. At the front end, we are building differentiation with capabilities in cloud." TCS and HCL have also been cashing in on the growth momentum in this vertical. While this segment grew 13.5% for HCL in the April-June quarter, it surged a robust 54% YoY for TCS. This is a trend the companies hope will thrive in the coming quarters.