The market-outperforming growth of HCL Technologies over the last one year has been largely powered by its infrastructure management services (IMS) business. This key vertical, which contributed about 30% to the overall revenue chunk during the January-March quarter is seeing an addressable market opportunity of $50 billion in the next three years. R Srikrishna, corporate vice-president ? infrastructure and healthcare Services, HCL Technologies, tells FE?s Debojyoti Ghosh that significant investments with innovative products and services will maintain its leadership position despite rising competition.

The infrastructure segment during the March quarter witnessed a 9% sequential and 41% y-o-y growth. Will HCL be able to maintain this tempo of growth in the coming quarters?

We see a continued momentum in the rebid market. We won 18 new logos in the last three quarters. Around 75% of infrastructure segment?s business has come from the rebid market and this has mainly happened as companies who have outsourced to various service providers were not satisfied with the service levels, hence they are going for rebidding of contracts. According to various market reports this opportunity over the next three years is expected to be in the range of $140-150 billion and we see the addressable market opportunity for HCL Technologies to be about $50 billion.

Historically a lot of our demand was driven by changes in the data centre space. But currently the emerging trend that will drive growth is new generation work place. The next generation employees need a mobile device, tablet, laptop and a network in which they can efficiently access corporate applications. Today?s young workforce need more flexibility in the way they work. So now IT organisations are forced to rethink on their workplace technology, which is driving the growth in this space. According to various research reports the second half of the calendar year will be stronger than the first half of the year.

Are the deal sizes getting larger in the infrastructure market given the current growth rates?

The global scope of the engagement in this space is getting larger. There is no doubt about it. Over the past several years we have made significant investments in global delivery model. Today we have large presence across the world including Manila, Shanghai, several places in Europe like Poland and Finland, in Americas we have six centres. Significant investments in global delivery models enable us to address customers who are global and cater to them in multiple languages and culture. We clearly seeing the complexity scope of the nature of deals going up. Regarding the sizes of deals we have made some of them public like the AstraZeneca deal, which was about $400 million. This should give an idea of the size of deals in this space.

What has led to a steady improvement in operating margins in the past few quarters?

One of the key focus across all our businesses is how do you drive non-linearity, which is coming from three or four different factors. One of it is automation. There are number of things that were done by people, which is now automated. Second is intellectual property which drives further automation. There are lot of platforms that we have created in the last few years enables help provisioning IT for our customers. It eliminates the need for lot of manual intervention driving non-linearity.

HCL seem to be ahead of its peers in the infra segment and now with many companies increasing their presence in this area, how will you maintain this edge?

Firstly when a company decides to give their IT infrastructure or mission-critical data centres and network to us, the most important factor is trust. They decide to buy from us based on trust and fact that we will run it so well that it will not impact their business. The trust in us come from the long track record of having done this for many years across the world. Today if some of our competition wants to address this space, we don?t see it as a threat. Secondly to remain competitive we are not static and selling the same services year-after-year. We are innovating every year and coming out with new products and services in this space. We think we have that edge to maintain the leadership position.

During the quarter, the healthcare vertical saw a decline of 2.1%. What has led to this slip?

Healthcare business crossed half a billion dollar for the first time. We reached about $526 million. Our year-on-year growth is 41.6% in this space. We are looking at the long term. There are number of growth drivers that don?t necessarily play out quarter-on-quarter. Our biggest market is the US as it spend about 18% of its GDP on healthcare. The impact that IT can bring is to increase the effectiveness of healthcare and also lower the cost of delivery these services. The long-term trend and the impact of IT on healthcare is very high.