Tech Mahindra sees growth opportunities in metaverse; has over 70-80 active deals

Jagdish Mitra, Chief Strategy Officer and Head of Growth, Tech Mahindra

Tech Mahindra is building a robust pipeline of metaverse deals, betting big on its uses in the 5G era, a top executive said, even as clients increasingly rethink and reduce spending on futuristic technologies that are at the exploratory stages because of macroeconomic challenges.

The company currently has 70-80 active metaverse deals, Jagdish Mitra, chief strategy officer and head of growth at Tech Mahindra, told Moneycontrol.

“We launched very big on metaverse in Barcelona last year. And our opportunity today is extremely strong. One of the most robust pipelines for us is being built around the metaverse. Then again, even metaverse without a 5G network doesn't work. So we're investing across the board on all 5G and 5G-related end-use cases and applications,” Mitra said.

Tech Mahindra’s active metaverse deals have brought in order bookings worth “triple-digit millions,” Mitra said, without divulging the exact figures.

In October, Tech Mahindra said it was on track to achieve about $1 billion in revenueby the end of FY23 from 5G projects alone, which includes metaverse deals.

There is demand for metaverse and other futuristic projects from across sectors including banking, financial services, manufacturing, telecom, media, entertainment, healthcare and life sciences. The metaverse is a virtual, immersive environment that facilitates digital interactions.

Client priorities

Addressing the issue of hesitancy among companies to spend on exploratory metaverse and Web3 projects amid fears of a global recession, Mitra said that it will depend on what the client is using it for. The technology in itself is not what is being shut off, but the kind of applications it is needed for.

“Things like metaverse, AI, things like the work that we're doing around AR/VR and quantum will get us deals depending on what the (client) priorities are. The priorities now are more towards cost transformation and a little focus around customer experience and moving towards the cloud,” he said.

On the 5G side, Tech Mahindra wants to steer the narrative towards connectivity, engineering, cloud and sustainability – the key pillars on which the company builds its solutions.

Cloud adoption

In December, Tech Mahindra launched Cloud Blazetech platform that Mitra said will help the company tap the next phase of cloud opportunities.

“The first phase was about migrating things. Now the movement has become about applications,” he said. “The basics have been done, the cloud has been established, enterprise business applications have improved. Now, industrial applications are getting developed. That's how we are positioning our play.”

Mitra expects cloud applications in areas such as customer connect, production, manufacturing, banking, and healthcare-related solutions.

Automation over hiring

Tech Mahindra reported the highest headcount reduction among IT companies in the third quarter of FY23, down by 6,844 from the previous quarter.

Mitra said this did not reflect a softening of demand but an increase in automation, which required fewer employees. He added that demand continues to remain strong so far.

“We definitely feel that more and more automation, more and more technology, more and more process automation type of work will take precedence over the work that we're doing, and that's going to be the future. So that's more the reason for the headcount to have rationalised, rather than slowing demand. It's more technology and customer demand in terms of areas of work that we are delivering,” Mitra said.