HCL Tech seeks to balance business portfolio in 3 years

Written by Diksha Dutta | Diksha Dutta | Kirtika Suneja | New Delhi | Updated: Aug 4 2012, 07:14am hrs
Delhi-based IT major HCL Technologies is looking at a balanced portfolio of business with run-the-business (RTB) and change-the-business (CTB) deals contributing equally to its enterprise application business in the next three years.

At present, the company gets 75% of its business from RTB and the rest from CTB in enterprise application services (EAS). The service line contributes 20.8% to the company's revenues and was strengthened after the $658-million acquisition of UK-based SAP consulting firm Axon in 2008. CTB spends relate to investments in new and transformation projects, while the RTB spend refers to maintaining the already running processes.

We are seeing higher win rates and it is a conscious strategy to increase CTB. This split between CTB and RTB will be 50:50 over the next three years. The US has emerging trends in this space and we will concentrate on trends like mobility, big data and cloud, said Steve Cardell, CEO, HCL Axon. Among geographies, the firm is seeing traction in both Europe and US in EAS. The fourth largest IT company of the country is focussing on the CTB deals because of the macro-economic conditions and the fact that its clients are investing in digital IT and platforms.

The restructuring or churn spend is up 40% y-o-y during the quarter and companies are looking at squeezing more benefits in the RTB budgets, which is also leading to vendor churn. The company won a record $1.5billion worth of deals in the third quarter and $2.5 billion in last six months (excluding renewals) besides eight multi-million transformational deals in the fourth quarter.