Phil Fersht — CEO and Chief Analyst, HFS Research[01:21]
Thanks, Mark, and great to see you again, CP, in sunnier climes and hopefully happier, slightly happier times than the last tough year, year and a half of our lives. So it’s good to see you again. Hopefully, we can meet in person in the not too distant future. But let’s start a bit about you actually. You’re one of the old guard now. You’ve been leading Tech Mahindra, you’ve been very involved in NASSCOM for many, many years. But have you always been in the tech business? Can you share a little bit about how your career evolved and, you know, was this what you wanted to do when you left college?
CP Gurnani — CEO, Tech Mahindra[02:03]
Well, anyway, you’re looking great, and while we were working on digital transformation, you are continuing to be the advocate of digital transformation, and you have also done personal transformation, so you’re looking good, Phil, and I definitely envy your garden and the good weather you’re enjoying in the UK. So coming back, Phil, to my own life. I think, yes, right since I was a kid, I have liked to break things and put them together, and if that is what is called technology, yes, I was born into technology. I graduated as a chemical engineer because I’ve always wanted to be an engineer. Now, when you start your career almost 40 years ago, and when the world was still not as well connected as we are today — a small-town guy goes into a college called National Institute of Technology, but it still was a small-town city called Rourkela in Odisha, India. The exposure was very limited. For most of my classmates at that time, the whole batch of various streams of engineering was about 200 people. I could say that out of 200, 50% wanted to work in a steel plant or what is called the public sector in India. 20% wanted to work in the government sector, join civil services. A few of us wanted to go into the private sector, but there were very few. I discovered, like I was a chemical engineer, I went into project management, I went into process management, I ran shifts, so you discovered your own not only strengths, but also what you wanted to really do. So before I fell into computers, it was really the restlessness in me which got into me. And why I call it restlessness is, you know, I’m lucky that I chose technology and IT as a sector, because that effectively meant my morning could be spent with a guy who was discussing his problems in oil and gas. And, Phil, again, technology is a way of coming and catching you. Those days, they used to talk about their control rooms, instrumentation, something called SCADA in oil and gas. Today we go and talk to them about IoT and analytics and machine learning. So what I’m lucky is I loved technology, loved people, so technology became computer engineering, and loving people became human engineering. So yes, I am a product of my own passion of engineering and human engineering.
Phil Fersht — CEO and Chief Analyst, HFS Research[05:40]
Right — to love people, love tech, that’s pretty much setting the agenda for the future, right? So, look, we’ve been through a really, really tough 18 months and a defining 18 months for many different reasons. Do you think we’re now in a kind of calm before the storm in what’s happening right now, or as you look out maybe to Q1, Q2 next year, are things going to be quite different? What’s your read on the situation?
CP Gurnani — CEO, Tech Mahindra[06:08]
So, the changes that have happened in these 18 months — if you look back, I think the industry has benefited, and that means the tech industry. Number one, the overall need for bringing your businesses online and using the latest in technology to gain your competitive advantage — I think, Phil, is the biggest blessing in this crisis. Let’s look back. AR/VR was on the horizon, but now it is coming mainstream. That Facebook, with Ray-Ban, will launch those $300 glasses only tells you that it is just a matter of time and $300 becomes $50 or $30, and it only also means that you and me will start using deep tech. We’ll start now taking advantage of data science in a more meaningful way, and we will be able to integrate machine learning, deep tech and decision making in a lot more positive way, and not really just be limited by an RPA, and we are now going to see much better innovation, much better business models. So I think this pandemic has been more of a blessing. Now, the second part of your question — when we get onto a year from now, I think a company like Tech Mahindra, 126,000 people, 90 countries, $6 billion revenue in dollars, I think we’ll have to almost bring in an even bigger sense of urgency because the customers are going to be a lot more demanding. That means we all have to accept it: our customers are not only evolved, but they are going to become a lot more demanding, and for us, we will have to become almost like an Olympic slogan, you know — faster, better and stronger. So yes, demand will be strong, the companies will have to become stronger, and Tech Mahindra is clearly working hard to become a better partner to its 1000 clients.
Phil Fersht — CEO and Chief Analyst, HFS Research[09:18]
From our perspective, we’re seeing this intersection between SaaS and services like never before. And we’re actually seeing business people going over to SaaS providers like never before as well, as the coding comes out of the question and it becomes much more of a business transformation. And we’re also seeing a talent crunch like I’ve never seen. I was joking, we’re calling it the great resignation — this is a joke going around the industry — where if you’re especially mid to junior folks, they’re getting snapped up all over the place. So, is this going to be a good thing for India, or is this going to be a challenge to work through in terms of demand outstripping supply? It’s something we haven’t faced probably since the dot-com days, and how can a company like Tech Mahindra, and how can India, either take advantage of this or survive in this crunch that we’re seeing?
CP Gurnani — CEO, Tech Mahindra[10:13]
Well, actually, take a step back. We found, all of us — you and I were there in ’98, ’99 when the talent crunch was even more severe, because people had forgotten COBOL or Fortran. So, when you look back, in ’98, ’99, I mean, I can only tell you from an Indian perspective, the automation tools, the migration tools were unproven. But there were your friends in Cambridge who came up with a tool a day, promising seamless migration. There were people who had retired and were playing golf in South Africa or in New Zealand or in Australia. We had to practically seduce them to come back to work. And number three, youngsters who had no interest in Fortran and COBOL — we had to remind them that that is basic sciences, and let us learn, upskill and run. So the point is, it is similar. Today the wave is data. Data centers to cloud. The wave is similar, where the compute engines will have to eventually become quantum compute engines, and the wave is similar where the industry transformation from the boardroom to the programmer level is unique and fast. I’m not saying it is the same situation. All I’m trying to say is it is similar, and if we use the same basic principles, I think we should be able to address the supply side in the next 3 quarters. So here is what Tech Mahindra is doing, just to share a perspective with you. We all know that Bangalore or a Chennai or a Pune or a Gurgaon in India, the supply situation is a little constrained. So what we’re doing is we’re going to the other cities where employees want to work: Nagpur in central India, Bhubaneswar in East India, Chandigarh in North India. I mean, if there was a cricket team, I can probably tell you that — now that we are having the IPL, right now they’re playing it in Dubai, it’s an IPL, Indian Premier League being played in Dubai — every time you hear of a team in Ahmedabad, Jasprit Bumrah, your and my favorite cricket player, is from Ahmedabad. We have facilities in Ahmedabad. My point is a Jasprit Bumrah of technology would rather work from Ahmedabad, and hence we are going where the talent is, and we are investing a ton of money to hire those experts who can make sure that the coaching is available to the youngsters.
Phil Fersht — CEO and Chief Analyst, HFS Research[13:20]
As we look at emerging talent, and we look at what clients need in terms of their investments — where are you placing your big bets? What do you think is going to see you guys win out, what’s going to happen in the next year or two?
CP Gurnani — CEO, Tech Mahindra[14:04]
So, literally two immediate bets — I call them immediate because, you know, we believe that the wave is strong. And again, you know, for me, I see the world a little differently. For me, all those billions of devices, every bulb and every street light, giving you and me data, means: follow the data. And obviously use automation. Whether you use cloud or any other method, make sure that you’re able to utilize the data in a meaningful way. That means you need to use all the compute sciences together, and last but not the least, you need to keep it secure. So — data sciences, cloud, automation, analytics (data sciences and analytics is one breath, normally), and cybersecurity. That is where I follow the compute cycle. The second area, from a use cases perspective, is that we are spending a lot of our time and energy on 5G. And you know why, Phil? We are a company which was born out of the telecom communication sector. We were a company which was called Mahindra British Telecom, and for that company we have continued to remain very, very communication-industry focused. So that’s why it is the number one priority for us, and we’re also being a disruptor, because instead of a traditional approach, we are now spending a fair amount of energy on software-defined networks. And the second area where we are betting big is learning, really from Apple, that if you focus not only on technology but on customer experience management, I think we as a company would do a lot more. So that’s where you see my acquisition of the — like the shoes company — called BORN, and then we have continued to acquire a few more pearls which are focusing really on customer experience management, and I think those two are my fastest-growing use cases. And in a lot of ways, that has become the driver for the company.
Phil Fersht — CEO and Chief Analyst, HFS Research[17:01]
So I know we touched upon it earlier, but I know you’re putting investments around SaaS, CP. What do you think of where this is heading, and how do you think Tech Mahindra can capture the SaaS wave more effectively than maybe some of your competitors?
CP Gurnani — CEO, Tech Mahindra[17:01]
I’m happy that you’re preparing me for my next board meeting, Phil. Because, you know, when Freshworks debuts at $13 billion market cap in US dollars, I mean, I know that now my board is suddenly going to say, what are you up to? So, you know what I did? I actually hired a new team for Tech Mahindra about a year and a half ago. For want of a better word, we split the business into wave one, which is business as usual; wave two, which is the very extraordinary tech investments we just spoke about; and wave three, which was more for mergers and acquisitions. And therefore these were bold bets in technology, and bold bets were really all about platforms and SaaS. So what we have done is that we already launched two platforms. One is called Factorial. That is really about a unified customer interface — you know, basically marrying all the channels together and giving an omni-digital, omni-channel experience to all our customers, and it flows into customer experience management, except that now it is a utility. We launched it in sports, fan experience management, onwards to sports data and analytics, and it’s working out very well. We already have customers in the NFL. We have customers in Indian cricket, we have customers even in soccer. And we are basically catering to people who need omni-channel experience. The other one that we are about to launch — we have already done it for a few countries in Africa — is more about payment systems. So we already work with about 15 banks in 4 countries in Africa, and so that is a company that we will launch separately called YABX. And why am I using these words as separate companies? Because there has to be a much higher restlessness than I have. And I want that restlessness combined with some of the things that are unique in the SaaS world. For example, I was talking to my team which is doing this payment system. They were planning to introduce, Phil, a monthly appraisal system, monthly increments. That human cycle is more of instant gratification, whereas Tech Mahindra still follows a twice-in-a-year appraisal. So my point is there are a lot of behavioral changes, and that is why we typically incubate them and we let them go out. So we have a similar venture in SaaS for health. So there are almost like 4 ventures that we are working on, and I’m again conscious that I use the word venture because they will be spun out and they would eventually work on that urgency and entrepreneurship that I think is needed by them.
Phil Fersht — CEO and Chief Analyst, HFS Research[21:11]
It’s excellent to see this final coming together of platform services. It’s taken, I think, 20-30 years, right? But I think it’s finally happening. So it’s great to hear some of the strides you’re taking there. One final question: you’ve been a legendary industry figure for many, many years. But if you had one wish to change this industry for the better — just one thing — what would that be?
CP Gurnani — CEO, Tech Mahindra[21:38]
You know, Phil, the software is borderless, content is borderless. If we wanted to do justice to this industry, we should have made people also borderless. And honestly, the whole industry would have benefited. You know, I get invited by the German Chamber of Commerce, or we want to attract people and build capability. How does it matter whether the capability is built in the Caribbean or is built in Germany? I got invited the other day to talk to the UAE ministers, and they were saying, oh, they will give a golden visa or some visas to the UAE people. Japan wants to make a new policy completely. And I said, thank you very much — I mean, why do you first create those borders? If this is what is the right thing for you, it’s the right thing for the industry. Let’s work seamlessly, because the world is connected, experiences are connected. Why can’t people be a little more, better connected and be a little more borderless?
Phil Fersht — CEO and Chief Analyst, HFS Research[22:58]
Yeah. I couldn’t agree more personally. I spend my life traveling around the world, even now, but I completely agree with you on the freedom to travel, to choose, to build, to build excitement. And there are so many new emerging locations in the world which have exciting capability beyond India and Eastern Europe and Canada and places like that — Peru and Chile. It’s fascinating what’s going on. So anyway, CP, it’s been fantastic having you here. I’ve really enjoyed it. Mark, did you have any final words to sum up?
CP Gurnani — CEO, Tech Mahindra[23:54]
Awesome. Thank you, Mark, and thank you, Phil. It’s lovely seeing you, talking to you, and hopefully we will be able to have a coffee or a dinner or a wine together very soon.
