IT sector to infuse heavily in AI in 2019
New Delhi: It faces threats from rising protectionism, data flow curbs and fast-changing technological shifts, but the Indian IT industry is keeping its hopes high for the new year with plans afoot for big investments in automation and artificial intelligence.
For the industry body Nasscom, 2018 has been the year of 'Digital at Scale' as IT firms focussed on leveraging new technologies and ensuring sustainability by creating right skills with help from innovation, policies and partnerships.
The year ahead is "punctuated with several transformative opportunities", Nasscom President Debjani Ghosh said.
The industry body has projected exports to grow at 7-9 per cent for 2018-19, almost same as the previous fiscal, but domestic revenue may grow faster at 10-12 per cent and this may make the new year transformative with overseas funds accounting for a lion's share so far. Over years, the industry has graduated from being the back office of the world to being at the forefront of change, helping clients optimise operations and stay ahead of competition.
Protectionist stances are being seen across key markets -- be it the US, the UK or Australia - with governments bringing in more stringent regulations around procurement of work visas. As a counter, Indian IT firms are ramping up their local presence abroad by hiring locals.
Ghosh said rising protectionism continues to be an irritant and the anti-immigration rhetoric discriminatorily targets Indian companies and challenges the level playing field for business delivery.
The companies, however, are upbeat on opportunities.
Cyient Executive Chairman BVR Mohan Reddy said the Indian technology industry's business model has moved away from cost-arbitrage to solution provisioning and value creation. He exuded confidence that visa issues will not be a concern for a sustained growth of the industry. Mindtree CEO Rostow Ravanan said his company is closely watching international issues and is geared up to deal with this dynamic scenario through greater local hiring and other measures.
"Our approach would be locate tasks in the geography based on the best interests of our clients," he said. Mindtree is also focussed on "imagining what is 'Beyond Digital' and making investments to prepare for the future".
One of the biggest developments in 2018 was implementation of the GDPR (General Data Protection Regulation) in the European Union in May. It aims to strengthen and protect data of individuals in the region, while the norms also stipulate heavy penalties for non-compliance by companies. For some, this is also being seen as an opportunity.
According to Microsoft India President Anant Maheshwari, this gave India an opportunity to build expertise and capabilities, create new lines of advisory and consulting businesses, develop a market differentiator and be a source of competitiveness for customers in EU. Back home, India is developing its own set of data protection rules, which would deal with consent, definition of personal and sensitive data, possible exemptions, grounds for processing data, storage restrictions for personal data, individual rights and the right to be forgotten.
Apart from penalties, the proposed rules also restrict cross-border transfer of personal data - a clause that has irked many international tech companies as they would be required to host sensitive data like financial information in local servers. An HCL Technologies spokesperson said the GDPR rollout and other such regulations have had global enterprises rushing to assess their compliance and are working towards aligning their policies and controls.
"Escalating threat landscape with a spate of high profile breaches and increase focus on regulations have ensured that the cyber security and governance risk and compliance services are much sought after," the spokesperson added.
One of the big milestones for the Indian IT sector this year was Tata Consultancy Services (TCS) crossing the $100 billion market valuation mark.
For Infosys, 2018 was a year of stabilisation after a long turmoil. The new CEO Salil Parekh has charted a three-year transformation strategy — year one will focus on stabilising the company, while the next two years will be about gaining momentum and accelerating growth, respectively.