Infosys, HCLTech CEOs call for an overhaul in IT business models amid AI disruption

Infosys CEO Salil Parekh and his HCLTech counterpart C Vijayakumar.

Some teams are already delivering twice the revenue with half the people amid the artificial intelligence (AI) disruption, HCLTech Chief Executive Officer C Vijayakumar said on February 24 at the Nasscom Technology and Leadership Forum 2025.

He added that the traditional information technology (IT) business model, as existing for the last 30 years, is ripe for disruption and time has already run out for that model.

“The business model is ripe for disruption, what we saw in the last 30 years a fairly linear scalling of IT service. I think the time is already out for that model and in the last couple of years we have been challenging our teams on how you can deliver twice the revenue with half the people, that’s really what I found I make through a lot of my teams,” Vijayakumar said at the event.

The comments come at a time when the impact of AI on IT jobs is growing with some questioning the very business model that these companies have been working on for years.

NTLF 2025 is NASSCOM's flagship National Technology Leadership Forum where tech leaders and policymakers come together to drive digital transformation, AI innovation in India.

Vijayakumar added that big moment of disruption is here with AI and fundamentally changing the industry, necessitating for IT companies to react.

Speaking at the Nasscom Technology and Leadership Forum 2025, top IT leaders on February 24 shared insights of how the business is being reshaped by artificial intelligence.

Continuing on the point of view, India’s second-largest IT company Infosys said it fully agrees with the views of Vijayakumar. “What CVK (C Vijayakumar) is saying is really a call for us to make sure we don’t remain complacent. There are aspects today that are growing really well and that will continue and we need to find new ways,” Infosys CEO Salil Parekh said.

He further explained that implementation of AI has resulted in a massive 7-15 percent in software development. The Bengaluru-based company has been able to generate revenue from Generative AI, which is expanding the market for newer projects, Parekh added.

Meanwhile, Vijayakumar added that IT companies need to become proactive as well as ready to cannibalise some of the revenue. He added that open source business models may not continue to be open source and could become 'coins for geopolitical exchange'.

This view of the evolving business model was echoed by industry veteran and Premji Invest CEO TK Kurien earlier. On November 22, 2024, he said the Time and Material (TNM) model used by IT services companies needs a change and those who implement it will be successful.

He criticised the model for allowing the tech companies to pass inefficiencies onto customers while profiting from them.

"It’s (TNM) a wrong economic model," Kurien said in his address at the CNBC-TV18 and Moneycontrol Global AI Conclave on November 22. He believes the IT companies must refactor their pricing strategy as the TNM model will be completely disrupted.