Moneycontrol PRO
you are here: HomeNewsBusiness

Reporting Digital as a revenue stream may not make sense in two years, says Birlasoft’s Chief Business Officer

Every project will have a digital component and Digital as a term will become synonymous with the work IT services companies do, says Roop Singh

August 28, 2020 / 03:44 PM IST
  • bselive
  • nselive
Todays L/H

As the pandemic accelerates adoption of digital products and services, reporting Digital as a revenue stream will not be relevant a year or two from now, said Roop Singh, Chief Business Officer, Birlasoft.

Broadly, IT services firms bundle a range of services, including cloud, automation, business analytics and cybersecurity, under the digital head.

Most IT services firms report revenues for Digital and Core services. The latter includes support and maintenance of legacy systems such as mainframes. Digital accounts for over 35 percent of revenue and for some firms, including Birlasoft, it is 40-45 percent of their overall revenue.

While the Digital portion is growing, revenues from Core or Legacy, still the major chunk of business, is coming down.

A line that is blurring

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more

According to Singh, the distinction between the two is blurring, more so amid the pandemic. “In every single project that we are tackling, whether it is bringing legacy platforms into the Cloud or whether we are providing end services, all of them have a Digital component.”

For instance, in the wake of the pandemic, companies had to shift to the Cloud quickly to ensure business continuity. Processes that run on mainframe systems had to be moved to the Cloud over the last five months. If not for the pandemic, it would have taken couple of years for the shift to happen.

In addition, cybersecurity is becoming important — with employees working remotely, network security has become essential.

A new normal

As the market shifts, organisations are not only reskilling themselves but consumers are also starting to learn what the new world is. “And given that they are looking at digital as a platform to build the technology, they (digital and legacy) all become singular. So, if we look at the industry overall, in a year or two, people will stop talking about Digital because of the way services are delivered,” Singh explained.

But reporting that shift would take time. For IT services organisations, increasing Digital revenue is a measure of how successful they have been in adopting to this new normal. IT service providers big and small are competing to gain market share in workplace transformation, cloud migration and remote working solutions, which are in huge demand.

Singh explained that down the line, Digital as a term would become synonymous with the work IT services companies do and it would all become one. “But for now we will continue with what the market peers are doing in terms of how we measure success in a particular market segment,” he added.

Swathi Moorthy
first published: Aug 28, 2020 03:36 pm