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Legacy business of the Indian IT sector is shrinking with mid-cap companies growing at a faster clip compared to large-cap firms due to their proactive focus on innovation, according to Vineet Nayar, the former chief executive officer of HCL Technologies.
“The legacy process of doing business is dead,” Nayar said. "When the large-cap IT companies recognise the urgency for change, they can beat everybody.”
When the application business was going down for Indian IT companies, BPO (business process outsourcing) and the engineering verticals got created, Nayar said. But the large-cap firms are yet to see that change, he said.
Nayar, however, sees midcap IT firms at the forefront of driving business through innovation. “Some mid-tier IT companies are really innovating in the way to look more like a digital company which has leadership and delivery on site and less (presence) offshore,” Nayar told BloombergQuint.
IT companies have been very good at developing Indian talent and then sending them overseas, said Nayar, adding that the business model is now disrupted and Western contractors would prefer local organisations.
The recent pullback, according to Nayar, was due to uncertainty over the ability of Indian IT companies to handle visa issues.
Nayar also stated that Indian IT firms have an “intellectual advantage” compared with their global peers and a double-digit growth was achievable. “Indian IT boards and CEOs are not going to accept stagnant growth. I don’t think Indian IT is going to die a slow death, not under the watch of current boards and smart CEOs.”
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