- Digital Foundation Services
- Right foundation to run digital infrastructure
Watch #HCLTech's Jagdeshwar Gattu in conversation with Niraj Shah on the sidelines of #Davos2024. #WEF
- Right foundation to run digital infrastructure
Watch #HCLTech's Jagdeshwar Gattu in conversation with Niraj Shah on the sidelines of #Davos2024. #WEF
Category
📺
TVTranscript
00:00 Well, thanks for tuning in to NDTV Profit. We are here at the World Economic Forum at Davos and
00:05 make no bones about it, every single year everybody talks about how technology is at the forefront of
00:11 everything that's happening in the world,
00:13 including here at Davos, and it's my absolute delight and pleasure to welcome Mr. Jagdeshwar Gattu,
00:19 President of Digital Foundation Services at HCL Tech, to try and tell us a bit about
00:25 how he sees what's happening on the technology front in the domains that
00:31 he's taking care of, which is by the way the largest domain at HCL Tech and arguably any large
00:37 IT services company in India or elsewhere.
00:41 Jagdeshwar, thank you so much for being with us here on NDTV Profit.
00:47 Just let's quickly start by telling people about what you do, because
00:50 not everybody would be completely aware of Digital Foundation Services. People are aware of Infra, but not necessarily this.
00:56 Yeah, so Digital Foundation Services is the bedrock for digital transformation, right?
01:02 We create infrastructure, you know, which is secure,
01:06 resilient and
01:09 flexible and also provides the experience
01:12 operations. So the customers when they're doing the digital transformation or the business transformation,
01:18 they need a foundation and that's what we deliver from HCL's side.
01:22 So the foundation, as we see over the last 15 years,
01:27 the ability to provide all the stuff that you spoke about on the foundation has changed materially because I believe the
01:34 flexibility part that you spoke about has also increased because a lot of people want to be a lot more on cloud.
01:40 I'm presuming that is one. Security as well would have, you mentioned you want to provide a secure foundation and there too
01:48 just by virtue of all that's happening across the world when it comes to security issues,
01:53 it seems that the need for a more secure network, a more sophisticated secure network
01:59 has only gone up.
02:01 The network at force itself has grown tremendously in size.
02:05 So how different is it right now and how challenging is it is right now to do the work that you're doing
02:10 relative to what it would have been 10 years ago?
02:12 Yeah, Neeraj, if you look at what we have seen in the last three, four years with the COVID coming in,
02:20 suddenly people who are working in the office, there was a cloud journey which we were going through.
02:24 Before COVID also there was the cloud and there was a little bit of bandwagon where everybody said we got to go 100% cloud.
02:32 But COVID brought a different angle to the whole thing. People started working from home.
02:38 So part of the working from home, you have to make sure that everybody has the same level of access,
02:44 whether they are at home or at the airports or different different places.
02:47 So network became a very critical aspect of how you actually want to optimize, how you want to transform the network.
02:54 When you open up both the endpoints, which our users are using and you open up the network transformation,
03:00 suddenly security actually became a very critical aspect of the whole thing.
03:04 So now not only you secure endpoints, not only you secure your perimeter, but you started securing,
03:10 security is more like a dynamic posture it has to get into.
03:13 There is a new way of defined policy.
03:16 Now think about what is happening with the AI coming in.
03:19 With AI coming in, the sophistication has increased in terms of the attackers.
03:26 Before with all this transformation, the attack surface was broadening with the OT coming in,
03:35 cloud coming in, people working from home.
03:37 But now with the AI coming in, more sophistication happened.
03:41 So these two and some of the regulatory requirements also continuously come.
03:45 This geopolitical situation what we're going through, it automatically pushes,
03:50 geopolitical situation primarily forces statewide, state sponsored attacker situation also.
03:57 Some of the different communities start attacking because of the geopolitical situation.
04:01 All these kind of forces you to sort of have a right foundation to run your digital infrastructure,
04:07 the right foundation to run your business operations.
04:10 So that's where we see that the enterprises now putting a lot of effort on investments in terms of security.
04:20 What we used to see two, three years back about 7 to 8% of the deal value,
04:26 now security actually almost becoming 20 to 25% of the deal value.
04:30 There are standalone deals we are seeing in the security space
04:33 and there are standalone deals we're seeing in the network space
04:35 because it's almost like you're doing a catch up game.
04:38 You sort of went into a cloud journey, you went into the COVID because of the workplace end point,
04:43 security point of view, then now you're trying to transform your network, transform your security.
04:49 So how does that, for example, impact somebody like you
04:55 who runs such a large piece of a large IT company
04:58 because you are offering the whole bouquet of services,
05:02 but as you said as well, there are standalone niche pieces of deals happening as well,
05:09 wherein vendors who are coming and saying that,
05:11 "Hey, we understand, let's say, security better than most companies.
05:16 We understand X better than most companies."
05:18 So how is this constant skirmish between a whole service being given
05:26 versus piecemeal services being given by experts impacting business for you?
05:30 And then part two of my question, think from a vendor's perspective
05:33 who wants singularly in his mind the cost to come down.
05:37 How is that conversation happening with you at a point of time
05:41 when you also want to protect your margins?
05:43 Yeah. So, we are the largest and number one infrastructure service provider,
05:50 and I have a natural advantage of transforming myself into providing solutions to the customers.
05:56 So we have an existing pool of talent,
05:59 and we've also done a lot of initiatives with respect to,
06:02 I'm sure you heard about the tech bees who are 10 plus 2 members coming in.
06:05 There are various catchment areas we are creating.
06:09 Inside there is talent who can transform into the new gen skills,
06:13 which we are putting a lot of effort.
06:15 And then new talent.
06:17 Recently you saw we are the ones who are taking pressures compared to anybody else.
06:21 So combining all these forces, we are able to create that talent pool
06:26 which will address this particular thing.
06:28 And when we talk about automation, it's also helping to the game.
06:33 Because of automation coming and there is a level of maturity
06:36 which has come in automation for the last 3-4 years, coupled with Gen AI,
06:40 we are able to solve a lot of problems and create some best experience for the customers.
06:45 And coming to the profits and other things, because if you look at it,
06:50 when you are driving the scale at which we are operating,
06:53 we can definitely offer customers the advantage of the scale.
06:57 And that's where we are still able to continuously maintain the margins
07:01 what we spoke about recently and continuously.
07:05 And the combination of this, able to create the talent
07:10 and able to provide the thought leadership,
07:12 because there are various things which are happening in the customer environment,
07:16 we are able to go back to the customer and say, "Here is the thought leadership."
07:18 What they should be doing and how they should be doing.
07:22 And then combined with the scale, what we have.
07:24 So there is a perfect balance in terms of how we are able to establish market leadership.
07:29 Not only that, if I look at my leadership team,
07:33 this leadership team has been with me for the last 17-18 years.
07:38 I mean, CVK also spoke in his thing that leadership attrition is lower single digits.
07:47 That reflects into the digital foundation services also.
07:51 Most of my direct report is probably working with me for the last 15 years.
07:56 So that talks about the kind of culture and the kind of customer centricity we have
08:03 in terms of delivering these services.
08:05 Maybe IT services have a problem of attrition, but you certainly don't.
08:09 But a question, I mean, IT service industry at large, not HCL tech.
08:14 But last couple of questions.
08:17 One is, how different could this piece look like, say, five years out?
08:22 The reason I ask this, because the constant conversation that happens
08:27 when we talk to people who are experts at tracking IT services
08:33 is that they talk about how legacy business at one end for large IT companies
08:38 is moving down one path and new businesses are coming in and doing something completely different.
08:44 Now, I would love to understand from you, because you run a piece
08:47 which could, quote unquote, be defined as legacy,
08:50 but which is also a few years back, tried to reinvent itself,
08:54 now doing a lot of other things as well.
08:56 So tell us a bit about that.
08:57 Well, Neeraj, I would say that five years is too long for IT to think about it, right?
09:03 It is more two to three years, I would say.
09:05 Let's do that then.
09:06 So the way, you know, let me give some example of four years back,
09:14 everybody said, you know, even in the IT space,
09:17 hey, automation is going to take over and everybody will, you know,
09:20 kind of lose their jobs or whatnot.
09:22 Even in the industrial revolution when it happened, everybody said,
09:25 okay, you know, this is going to take over, people will.
09:28 But now if you reflect it, right, there are other roles got created.
09:33 Take example of cloud.
09:35 You know, people were doing this cloud journey,
09:38 and there is something called FinOps got created.
09:41 FinOps is basically, it's a practice.
09:45 We monitor cloud consumption continuously and alert enterprises,
09:49 whether they are consuming in the right manner,
09:51 they need to balance their consumption.
09:54 So there is a new practice which came in.
09:55 You know, a couple of years back, I used to think automation is just a,
10:00 you know, let me say this in a different way, right?
10:04 When CIO used to visit us, I used to tell them,
10:08 hey, let's spend some time about automation.
10:11 And automation was given like 15 minutes, 20 minutes, about four or five years back.
10:15 Now the same CIOs who are visiting today to all of our offices,
10:19 we're spending considerable amount of time, two hours, three hours,
10:23 talking about how you want to do what you want to do.
10:25 The automation has become suddenly a separate tower by itself,
10:30 or, you know, track by itself, right?
10:32 Same thing will happen with some of the new technologies.
10:34 AI will also happen same, you know.
10:37 So the legacy component, while it shrinks a little bit,
10:41 but there is a newer technologies, newer things start expanding
10:45 and will continue to see growth in that particular area.
10:47 So the mainframe is a classic example, too.
10:50 You know, people thought 20 years back mainframe is going to go away,
10:53 but we still have customers running mainframe
10:55 and we still have teams where nurturing and building talent in that area.
10:59 So the legacy component will stay with some portions.
11:04 The transformation will continue to drive.
11:06 And the newer components will be becoming bigger and bigger.
11:09 And if you look at the entire portfolio wise.
11:11 Got it. 30 second answer before we wrap up.
11:14 What are you looking forward to the next three, four days?
11:16 I'm quite excited.
11:18 You know, then looking at number of customer interactions,
11:20 number of partners who are here, you know, it's amazing how everybody
11:25 able to, you know, come together here.
11:27 And, you know, it's a great opportunity to network
11:30 and it's a great opportunity to learn something new.
11:32 And there are newer themes which are much more abstract and broader.
11:35 I'm keen to learn about those newer things.
11:37 But, you know, while the abstract stuff, I continue to learn.
11:41 But there are a lot of relationships which you need to see, you know, meeting,
11:45 you know, who is who in the OEM side and a lot of partners are there.
11:48 There are, you know, good line of meetings are, you know, there in front of us.
11:52 Well, wish you all the best.
11:53 And thanks so much for speaking to us today, Jagreshwar.
11:55 Thank you. Thank you for having me here.
11:57 The pleasure was ours. Viewers, thanks for tuning in.
11:58 [ Music ]
12:09 [BLANK_AUDIO]