TCS, Infosys Will Get Maximum Outsourcing Dollars As Clients Increase IT Spending

TCS, Infosys Will Get Maximum Outsourcing Dollars As Clients Increase IT Spending
TCS, Infosys Will Get Maximum Outsourcing Dollars As Clients Increase IT Spending

Despite the ongoing COVID-19 pandemic, Indian IT companies TCS and Infosys are expected to profit the most due to the increased IT spending by their clients. This has been revealed in a report by Kotak Institutional Equities. 

Read on to find out the insights that the report has to offer!

Kotak Institutional Equities Suggest 6-8 Percent Increase in Outsourced IT Services

The report has revealed that many companies have observed an increase in their expenditure in innovative capabilities that will lessen the costs of operations, along with migrating to newer businesses. 

As per Gartner, there will be a 6-8 percent increase in outsourced IT services from 2021-2024 because of the acceleration in digital transformation spending. This was previously 4-5 percent in the last 10 years.

Additionally, Tata Consultancy Services and Infosys will be the two IT providers leading in these changes, considering their comprehensive offerings, their ability to land big integrated deals and process capability as well.

After TCS and Infosys, next in line are HCL and Wipro who will be able to offer their efficient digital infrastructure layer to offer. 

Clients To Migrate To Cloud; But IT Service Providers May Not Get Entire Benefit

Apparently, the companies have also joined hands with cloud hyperscalers such as Google Cloud, Azure, and Amazon Web Services and SaaS providers in order to assist their customers with digital transformation. Also, they are in the right space to help their clients despite the pandemic.

However, there is a possibility that clients will migrate to cloud rapidly, but IT companies might not get the entire benefit.

The report says, “The surge post-COVID-19 can create new opportunities though not of the scale witnessed with cloud hyperscalers.” It states that the cloud services might observe a growth of 20-33 percent, but the growth for IT service providers will be less.

Retail clients have been investing in online platforms as the pandemic forced offline shops to close. For instance, the e-commerce sales of Unilever increased from 6 percent in FY19 to 8 percent between the time period from January to June. Whereas Nestle’s numbers were 8.5 percent in FY19 and increased to 12.4 percent now.

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