Mumbai: Legacy technology-based services and products will continue to constitute a meaningful part of revenue for IT service providers even as the share of digital business is growing at a faster pace – this was the general view at an ET roundtable organised at the Nasccom summit on Friday.
CP Gurnani of Tech MahindraNSE -0.11 %, Keshav Murugesh of WNS Global Services and Cyient BVR’s Mohan Reddy discussed how their companies, and the industry in general, were handling legacy businesses when the focus is increasingly turning towards emerging technologies in areas like cloud, blockchain, machine learning, artificial intelligence, cyber security, quantum computing and IoT.
“The old has not extinguished as fast as people have always thought. Mainframe still exists,” Tech Mahindra managing director Gurnani said.
“The transformation or digital adoption is not new. What we have noticed is that if there is a job replacement, it is substituted by a better job. If there is a process change, it has only created a better demand.” His company reported a 10.6-percentage-point increase in digital revenue in the quarter through December from three months earlier, accounting for 41% of overall revenue.
Cyient chairman Reddy said clients of the engineering and technology solutions company were continuing to improve upon their legacy software and hardware infrastructures rather than replacing those entirely with new, digital products.
“It’s not like they are dumping off old design work and asking us to make new products… The legacy continues. There are a few areas where the new technologies are disrupting the old. Otherwise they are augmenting it and they will work with each other,” he said.
Aerospace and defence contributes close to a third of Cyient’s revenue.
Reddy said clients in the sector were looking at rewiring existing aeroplane engine architecture, which costs about $3 billion to build, with new digital technologies. Engines typically have a life space of 40 years, he said.
“They are at this point making sure to incorporate new digital technologies to get new applications. A good example could be engine health monitoring systems — sensors are placed to provide the ability to crunch data to understand the behaviour of the engine during a flight.”