TCS earns $2 billion per year through analytics biz: CEO Rajesh Gopinathan

Tata Consultancy Services gets nearly $2 billion in revenue a year from analytics, the company’s CEO Rajesh Gopinathan told ET in an interview, making it the largest chunk of its digital revenue.
 
India’s largest IT company gets over 22% of its overall revenue from digital — a number that will be well over $3 billion for the financial year ending March 2018. This is the first time TCS has defined the contribution of the business segment that makes up the overall digital revenue figure.
 
Last year, TCS appointed Dinanath Kholkar, who used to run its $2-billion business process outsourcing business, to head its analytics division. 
 
“Analytics in itself will be equal to the portfolio he (Kholkar) was running earlier. Analytics was distributed across a very wide set and once we are done bringing it together, we will have to think how we report it and all, but we run probably one of the largest analytics groups,” Gopinathan said. The IT firm’s $2.5-billion mega deal with Nielsen is in the analytics space, which has helped TCS grow that business, Gopinathan said.
 
Soon after Gopinathan took over last year, the company went through a reorganisation that was focused on growing its digital business. He rejigged service lines and put them under Krishnan Ramanujam, who was named president. Individual service lines were clubbed into three buckets — cognitive business operations, digital transformation services, and consulting and service integration.
 
Large service lines like application development and maintenance, which contributed 38 per cent of TCS revenue last year, were broken down into smaller units such as enterprise application services, cloud applications, microservices and APIfication.
 
Cloud infrastructure will be a separate unit. Each was given aggressive goals. Two other digital units, other than analytics, were also carved out, internet of things and automation. Gopinathan tasked the head of the company’s engineering services division — Reguraman Ayyaswamy — to head its IoT services and PR Krishnan, who formerly headed the infrastructure services division, was put in charge of automation services.
 
Gopinathan said the new units were still building out their teams. “They are still building out their organisations and go-to-market and so forth but early success is strong and it really is bringing it all together... IoT and automation are quite new essentially; we are building it up from bottom up. Analytics is the larger piece,” Gopinathan said.
 
This is the first time that an Indian IT company has broken out a part of its digital revenue, a move that analysts have long wanted them to make. Larger rival Accenture gets over 55 per cent of its revenue from new technologies.
 
“IT companies should be breaking out more of digital revenue clearly. Currently, the definition is different from company to company so it makes comparisons harder. But if you look at the commentary, companies have been saying that they will look at giving more data in FY19,” an analyst with a Mumbai brokerage said.
 
He declined to be identified. In its latest earnings call with analysts in January, Infosys chief operating officer UB Pravin Rao said digital technologies contributed more than 25% to the company’s revenue and that the IT firm would publish this metric in the coming quarters.
Shoot

Trending News

Why Amazon’s Flipkart bid is just not high enough

Selling without MRP, expiry dates to cost etailers

TCS hits $100Bn market cap: A new phase for India Inc?

Snapdeal posts Rs 4,647 crore net loss in 2016-17

Flipkart-Walmart deal: What it means for the etailer and the whole industry

NCLAT stays CCI penalty of Rs 136cr on Google in search bias case

Walmart may rope in Google parent Alphabet for the Flipkart deal

Internet shutdown cost Indian economy $3 billion from 2012-17: Study

Flipkart and Amazon plan mega summer sales in May

International sales now account for 48% of Twitter's revenues

70% of mobile phones buyers in India opt for non-cash payments

Amazon India expects groceries & household products to account for 50% of business in 5 yrs

India to come out with a E-commerce policy framework in 6 months

Online learning platform Career Anna raises Rs 3 Cr funding

Wal-Mart will offer to buy up to 86% of Flipkart

Agritech startups Sabziwala and LivLush merge their business under new entity Kamatan

Avail Finance lands $17.2M from Matrix Partners & Ola, Freecharge and Flipkart founders

RBI suggests tax sops, self-regulation to build fintech space

Swiggy hires new CEO for its Access Service, gets new CFO

Logistics company Delhivery registers 44% increase in FY17 revenues

WeWork to acquire one of the oldest social networks, Meetup

Qualcomm rejects Broadcom's $103 billion offer

EasyRewardz gets $2 million Series-A funding

'Anemic' iPhone 8 demand drags Apple shares lower

Lending platform Lenden Club gets Rs 3.5cr in Equity Investment

On festive sales, Flipkart says 65% clients from Tier-II cities