TCS’ Salesforce consulting bets gives it an edge over rivals in agentic AI, say analysts

“There are many mid-sized firms with deep relationships, and buying them is often faster than trying to grow capability organically. TCS is also filling gaps in US-based talent, something all Indian IT majors are struggling with,” he told Moneycontrol.

Compared to its tier-1 IT peers, Infosys and HCLTech, TCS is being more aggressive, he said. While Infosys has partnerships, it has not made similar sized acquisitions. HCLTech is investing more in engineering and cloud infrastructure, not CRM (customer relationship management) consulting.

TCS’s approach, in comparison, is more front-office customer experience oriented, which aligns with where enterprise spending is shifting.

“Salesforce, ServiceNow, and cloud platforms remain the anchor technologies for large transformation deals that still represent a sizable portion of enterprise budgets. These deals bring in specialised talent, strong North American client relationships, and vertical depth that TCS can scale globally,” Fersht said.

Expanding Salesforce capabilities

Prior to Coastal Cloud, TCS had acquired ListEngage MidCo in October for $72.8 million. The company provide digital marketing services through Salesforce platforms like Marketing Cloud, Data Cloud and Agentforce and AI advisory services.

Salesforce remains the most critical system of engagement in many industries. It is used in the front line for sales, service, marketing, and customer experience --- domains where agentic AI will accelerate the fastest, Fersht explained.

“By doubling down on Salesforce firms, TCS is betting that AI-driven customer operations will be one of the earliest large-scale enterprise adoption zones,” he said.

According to Namratha Dharshan, Chief Business Leader - India Research at technology research and advisory firm, ISG, Salesforce is the meat of any organisation, given that everybody uses CRM technology.

“ListEngage acquisition gives TCS the momentum to utilise the CRM data points to deliver more proactive engagement for customers, including marketing and personalisation, contextualisation,” she told Moneycontrol.

She added, “In comparison, Coastal Cloud provides more consulting and implementation. This acquisition beefs up the entire AI and data layer expertise from Salesforce itself.”

Major leadership changes

This year, TCS has been strategically aligning its leadership team too, in the wake of its plans to become the “world’s largest AI-led technology services” company, by adding end-to-end AI capabilities.

Earlier this year, TCS appointed Mangesh Sathe as the chief strategy officer. Before this, Sathe was the chief executive of Tata Group’s in-house management consulting arm, Tata Strategic Management Group (TSMG), where he was responsible for advising all Tata companies.

Analysts believe that Sathe joining TCS signals the IT firm is on its way to acquire more companies.

To bolster and lead its digital investments and capabilities, TCS had also appointed Aarthi Subramanian as the chief operating officer (COO), who previously served as the Group Chief Digital Officer at Tata Sons.

“They are already sitting on a huge pile of cash, which they are now deploying to capture growth. TCS may also acquire firms with engineering services, BPO services and other capabilities going forward,”  said Ashustosh Sharma, VP and Research Director at consulting firm Forrester.

He added, “I expect to see more acquisitions from TCS. Its peers, such as Accenture, Capgemini, Cognizant and Infosys, have been acquiring companies more vigorously than before. It's high time TCS did so too.”

“TCS hasn’t done any acquisition in nearly 10 years. After crossing $30 billion in revenue, their next target may be $50 billion, and that journey will be different,” said Pareekh Jain, Founder and CEO, EIIRTrend.

He added that as the market dynamics are completely changing now, TCS will look at newer business lines and expand into new geographies.

Revenue growth prospects, margin pressures

“These acquisitions significantly strengthen TCS’ global salesforce aspirations by bringing together comprehensive, multi-cloud Salesforce expertise across industries globally… TCS will continue to pursue the M&A agenda aligned with its core priorities in AI, Cloud, Cybersecurity, Digital Engineering and Enterprise Solutions,” the company said in a press release.

While the acquisitions will be a net positive for the company, boosting capabilities and accessing newer clientele inorganically, the short-term impact on growth and margin pressures may arise from how the company integrates and leverages these acquired firms.

“The idea is to find new growth channels and be more aggressive. By buying these companies, TCS gets access to newer clients, with it may not have had a relationship. They will turn these acquisitions into vehicles for growth using their traditional strengths in client management," Sharma said.

He added, "Overall, I see it as a positive approach to growth, balancing both organic and inorganic routes.”

Fersht warned that the risk lies in the “capital-intensive” strategy that TCS has embarked on. While Salesforce consulting firms are expensive assets, data centre build-outs require long-term utilisation to justify the investment.

“If enterprise demand slows or shifts toward more agentic AI-driven models, TCS will need to monetise these assets aggressively to avoid margin pressure. The balance between traditional systems work and new AI-driven delivery models is still in flux, so timing becomes critical,” Fersht explained.

TCS’ AI roadmap

During TCS' Q2 earnings conference in October, the company's management laid down its roadmap to expand AI services and infrastructure through strategic investments in acquisitions and setting up data centres.

TCS currently plans to invest approximately $6.5 billion into building 1 GW of data centre capacity over the next five to seven years.

As of November, TCS said it will be investing $2 billion (Rs 18,000 crores) along with global alternate asset management firm TPG to fund its AI data centre business, HyperVault. The investment will happen in tranches over the next few years.