Saurabh Gupta — President, Research and Advisory Services, HFS Research[00:00]
Hi everyone. Welcome to HFS Unfiltered. Today I’m especially delighted because we’ll be talking about how our vision of services as software is coming to life with a couple of very, very interesting gentlemen who I’ll introduce you in a bit. But you know, HFS coined this term services as software in 2024, and our idea was actually very simple. Our idea was with agentic AI, with generative AI coming into the picture, we will start to see services that almost behave like platform, services that almost behave like software. These will be platform-led, outcome-based, and no longer you know slaves to the headcount model that we’ve been running services for two, three decades now. Honestly, Quinnox, when we when I met Amit, who I’m gonna introduce very shortly, was one of the first firms to take that thesis and bring it to life. And now Quinnox is a part of something even bigger with Everforth. So, to talk about services as software, what it means for our services industry, and what this acquisition and rebrand is all about. I’ve got the two perfect people, Amit, who’s the CEO of Quinnox, and Shiv, who’s the president of Everforth. So, Amit and Shiv, thank you for thank you for being here. My first question to you is to you, Amit, is you know, we’ve been we’ve been tracking these services as software shift very closely. And you and Quinnox have been drawn to it. What tell us a little bit about what drew you to this whole services as software thesis and how it shapes the way that you’re thinking about your business.
Amit Nagar — Chief Executive Officer, Quinnox[01:49]
Sure, thanks, Saurabh. As you rightly said, I’m one of the founding members of Quinnox. We’ve been at it for 25 years. I think the answer to your question lies in the space in which we’ve been operating for 25 years. We’re a mid-sized company; we were, no longer. We are now a large mid-sized company — and I will let Shiv talk about that, and how we are retaining that DNA. But having built this company, having enterprise clients, doing complex work, put us 99% of the times on a head-on collision like a David and Goliath situation for our entire life for 25 years. When you succeed in that space, you can’t be doing the same things that the Tier 1s are doing. It’s a recipe for disaster. So, as a company, we’ve always tried to think about how is it that we do things differently. And about eight, nine years ago, we ourselves started thinking about, and I’ve been asking this question as to how will our services be consumed in the future? And this question was in 2009, 10, 11, when we started asking, and then got serious about it. It occurred that the consumption will change. I didn’t know the answer, we didn’t know the answer. But we knew that the same way. But if you look at the outsourcing business, it’s has it has matured over the years, and it just continues to change. The next area of maturity was it would no longer be people centric. It would need to be AI-enabled. It would need to be consumption-based. It would need to be platform-enabled. Just how exactly it would come together, I don’t think we all knew, but we have been committed to taking the people equation down to a minimum, as little as possible, and using platforms, automation, AI, and cloud. That’s the only way we knew how to be ready, not only in a tier one — who would probably put a lot of money into this and they are — but also to be differentiated, and that’s how we got serious about service as a platform, delivering services through platforms, and as you coined the word service-as-software. And when we came together, I think the spontaneous combustion about you getting it and us having already lived living it, I think, gave rise to this conversation.
And I think what has happened also is, with the coming together with Everforth — I call Everforth, Quinnox at Scale. That’s the way I think about it, Quinnox at scale is Everforth. We didn’t, as you remember, we didn’t have the scale, right? We didn’t have the market credibility, yet we were doing some pretty innovative work. Now, with Everforth and Shiv’s vision of taking Everforth to that space of the undefined service integration company that today is still figuring itself out, we can be that company of the future.
And I’ll just say one more comment about services-as-software. In the 12 months that we’ve been talking, 12, 13, 14, 15 months, I’ve been reflecting that service-as-software is a given anymore. Now customers are looking for embedded and permeated AI into that. Okay, so that also is now a given. Now the embedded cost of AI also they want inserted because they don’t want to deal with that uncertainty. And they also realize that AI is going to change. So, they also want the partner to bring the vision as to how will AI change and will your services solution, MSP, outlive the change in AI technology. So, they also want that as well. So, I think the winner of the future is going to be the company that delivers services software, highly AI enabled. But take the uncertainty away for customers of the hidden cost of AI and the hidden cost of uncertainty that the models will change. So, I believe that we are really really ready for Everforth to deliver that promise. So, I’ll just take a pause and see you know how you want to take it from here, and have Shiv reflect on what I have said.
Saurabh Gupta — President, Research and Advisory Services, HFS Research[06:26]
Yeah, I definitely want to hear Shiv’s perspective, Amit. And Shiv, I’m assuming this acquisition wasn’t some random bet; knowing you a little bit, you definitely saw something very specific here. So, tell us what you really saw in Quinnox and what’s your vision for this combined entity.
Shiv Iyer — President, Everforth[06:45]
Look, when I came on board about a year and three months ago, when we looked at Everforth and what we are as a company, there was the big question about what is this professional services company of the future actually gonna look like? What does it mean to be a professional services company of the future in this world of day and in this day of AI? And all of us at Everforth believed we have an opportunity to create a company that was somewhat unencumbered by the legacy of the past. One of the things obviously we needed all along, was that we needed to have the ability to have complex digital engineering integration, application management, application modernizations capabilities from an Indian context. We had a near-shore presence, we didn’t have an offshore presence. What we also didn’t want is an organization that was generating a certain amount of revenue with, you know, 50,000 people, because you then you’re again saddled with the past. And so, we wanted to find a company that was really doing enterprise grade work, punching above its weight class, but with a delivery capability that was very, very mature and enabled by tools. And enabled by assets and AI-led assets and IP. We looked at a number of different organizations, right? But many of them didn’t pass muster. For us, it wasn’t about the size, it was about the innate DNA of the organization, the ability to do complex work, the ability to have complex delivery processes, mature delivery processes, and a forward-looking mindset of embracing AI and tools in how work gets delivered, right? So that was really the filter that we were looking at this from. Because, in Accenture, when I was there for 15 years, we grew up saying, if you want to grow one dollar of revenue, you’ve got to hire a certain number of people. You know that entire paradigm has shifted on us if you go back over the last 10 years. And so Quinnox has just the right size, you know, it has the right number of people, but scaling can now happen very differently than what it did in the past.
In keeping with the thesis that you have on service-as-software, our belief is that with some of the tools that Quinnox has built, that Everforth has built, when we bring these things together, we have an ability to scale on a curve that looks very different than what it was in the past. Because you know we’re going to be doing a lot more with AI. We’re always going to need humans in the loop, but the nature of what the humans in the loop do versus what AI does is going to be very different. And you know, we have an opportunity to be at the front end of creating that. So that was really the thesis, Saurabh.
Saurabh Gupta — President, Research and Advisory Services, HFS Research[09:59]
No, that’s fantastic, Shiv. So, Amit, if I can you bring it to the real world and maybe give us an example of what Shiv and you’ve been talking about, maybe a client example, whether real or anonymized. What does this mean for the client, right? What outcomes have you been able to create which you couldn’t have created with a traditional legacy people driven model?
Shiv Iyer — President, Everforth[10:26]
Let me give you a couple of examples. Even before we acquired Quinnox, right, there were a lot of companies, clients who came to us and said, hey, look, I’ll give you a great example. Companies that were doing a lot of custom software development work with us, right? They came to us and said, hey, look, we no longer want you to tell us, you know, how many roles, how many people are you going to have on the team.
We are going to give you a spec… we’re going to give you a spec and we’re going to tell you to come back to us and say how are you going to configure this outcome with AI and people? I’ll bring to life why this combination is so powerful. Everforth had the client relationship and the agreement where we were doing existing work. This was not an existing Quinnox client, right? But we were there and the client was making the ask for us. We were able to respond with something that is extremely powerful with AI. And you know, think about almost reducing the size of those teams by 60 to 65%, right, In the way we brought these things together. So Everforth had the client relationship, so the ability to actually get the ask of this nature. Without Quinnox, we Everforth would not have been able to respond because we didn’t have the tools that were built to respond to that kind of a client ask for an outcome-based solution. And this is as recent as a month ago, right? So that’s a great example. Amit, add on please.
Amit Nagar — Chief Executive Officer, Quinnox[12:15]
One of the interesting shift in conversations that we began to have with our customers, I would say about 18 or 24 months ago when we really said, okay, this is where we want to go — and the first place to go was to kind of take over some run work that was being done by the Tier 1s, and the customer was unhappy for a variety of reasons. And the reasons could be — too large, not enough focus, not enough transparency, and so on and so forth. And when we did the initial set of you know like solutioning with them and engage with them, the question kept coming, yes, but how? They wanted to obviously have the same amount of cost basis that they were had. They wanted to go to something better, 10, 20, 30 percent better. They wanted to not spend money on transition costs. They wanted all of that. And initially our articulation was very traditional “we’ll optimize the pyramid”, “we’ll give five percent”, etc. And then when we started really articulating differently. There was a call that we had with the head of applications for a large insurance company. And when we articulated what that life cycle of AMS would look like through a platform, at the end of the hour, the gentleman said, I expected to hear a traditional outsourcing solution pitch. I didn’t expect to actually have a platform demo conversation. He then says, so now I understand how along the entire end to end of my life cycle of AMS, how things are going to optimize along the way, which you cannot do unless you can mirror my process on a platform or a set of platforms. He said, “boom, the light bulbs kind of went on”. So, that was a big turning point in our articulation. You can’t just keep going back to the same pyramid — that pyramid is tired. That legacy pyramid of up and down is tired. Customers are tired of it.
And another example I give you, a real example. In fact, Shiv and I were talking about this over the weekend. We are working with a very large industrial house with two large ERP environments, multi-country, so on and so forth. And the initial journey of ours is on the routing and self-routing and self-assessment of tickets and so on and so forth. We have taken an average MTTR, which used to be about 15 hours, to 16 seconds. That is huge game changer, with 90% accuracy, by the way. Okay? Now, granted, this is your lowest hanging fruit today in automation and routing and so on and so forth, right? But to go from 14 and a half hours of latency within a complex system, taking it down to 16 seconds, where a hundred percent of them were within 64 seconds, by the way, right? That’s a game changer. Now, as you go into more of the complex tasks of AMS, some of these will be lesser. Some of them might not be, you know, 95% improvement, some might be 60%. But you can’t do that unless you have a platform solution orientation. So that’s a real-life example. It’s a real proof point. And we were talking about over the weekend. So that’s where I think the possibility is.
I think the game is I’ll just make one point here to kind of go back and see what Shiv wants to say about this. That the conversation around automation and the benefits of this is a two-way street. The client and service providers have to use our trust with them, our track record with them, and our tenure with them. And I use these three words very because this journey is a journey of trust in AI. Without trust, you are not going down the AI because it is undeterministic. So, we have to go in and learn and improve. And that is the biggest hurdle in this journey — are you are we going to engage with those customers on the journey of collaboration using trust, tenure, and a track record. And you know, I’ve talked about Quinnox at scale is the Everforth story. I was blown away when we came on board that 350 of the top Fortune 500 customers of Everforth. Now they’re my customers. The remaining 1800 companies, 1200 of them are customers. So, our journey, Saurabh, is not of breaking into accounts. Our journey is to change the conversation about where we want to go with them and where their legacy debt might be, what they want to do with automation and transformation. And I think collectively, if you look at the culture match between Everforth and now Quinnox — it’s tenured clients, and long-term trust with customers. So, we can use that trust, track record and tenure to change the conversation. So, to Shiv’s point, we are really, really, really excited about the future. It’s not breaking into accounts. It’s now how to change the conversations. Right? Shiv
Shiv Iyer — President, Everforth[17:52]
Yeah. And Saurabh, I think one of the things that I think sometimes gets lost in this conversation is, you know, when you look at the addressable markets of where services are, we did managed services as Everforth, but we’ve now opened up a whole new addressable market on AI driven, services driven, software driven, managed services for Everforth. On the other hand, Everforth did a lot of work in what I would call application development, system integration, right? Which, when we combine the engineering capabilities of Quinnox, we can serve with software and AI. So, our intent isn’t just to think about this problem or this evolution in the context of AMS, it’s across the SDLC. Because we now play across the SDLC at scale, right? Whether it be custom development, whether it be app development around existing enterprise platforms, whether it be integration across the landscape of the architecture of a client, we now can bring our assets and AI to bear across that whole spectrum, which you know, six months ago maybe we wouldn’t have because we didn’t have the credentials or the capabilities in complex AMS. But now we have the ability to play across the SDLC at scale with software.
Saurabh Gupta — President, Research and Advisory Services, HFS Research[19:14]
Shiv, you made a great point last week about the mid-market business. You made a fascinating point that being the next frontier, yeah?
Shiv Iyer — President, Everforth[19:23]
Look, I think you know, you suddenly see this buzz around mid-market, right? I’ll just tell you this, right? We have businesses that have been built for the mid-market. Like this notion that the mid-market consumed pack consumes package solutions isn’t foreign to us. We’ve been there. Like if you look at our Workday business, that entire business, we are the leading integrator of Workday. And the whole thesis of that business was if there are 77 steps to an implementation of Workday, how do you drive automation using AI across the whole lot of them? So that entire business is a fixed price implementation business, which has thrived in the mid-market. So, I think call it serendipity, call it market forces. All the vectors are aligning towards a future which I think we’re kind of tailor-made for. And with Quinnox, we now have the ability to bring this at scale to a lot of our clients.
Saurabh Gupta — President, Research and Advisory Services, HFS Research[20:26]
Shiv and Amit, the mid-market point is an excellent point. In fact, we estimate it’s an almost $600 billion opportunity that is largely untapped. And it wasn’t it wasn’t possible to be to tap into that market with a legacy pyramid-driven model because the cost of sales would be too high to drive the revenue. But in this model, we can absolutely attack it. But I know this has been a fascinating, fascinating conversation, but let me flip it around and ask you what’s your advice for a CIO who’s, you know, who’s also equally frustrated by those 30 years of legacy services, who are starting to see diminishing returns because what more can you achieve? You know, unless you find some hidden continent under the ocean, what else can you do? What should he or she do? What’s your one piece of advice for a CIO? Who’s looking at these services as a software model, who’s looking at all the AI hype and promises, but they’re still struggling to move out of their existing constructs. What’s your one piece of advice for a CIO? And maybe Amit, I’ll start with you.
Amit Nagar — Chief Executive Officer, Quinnox[21:44]
Okay. You know, I feel that we got here by looking in the rear view of this model. We got here, and we keep looking for the same — size, scale, brand — because we thought that is where the answers lay. I think we’ve got to look at things past that. I think the world has moved on to things that are beyond the obvious. And I will say, not because this is a mutual admiration club, Saurabh, and I have I mentioned this to you before about HFS. I love your personality as a company. I love your personality as a company because there are many, many companies that will take safe choices. You and Phil are not afraid to take on the alternative, edgy, thought-provoking conversations. And I think the real future is in that edgy. Let’s not look at the obvious. Let’s not look at the 800,000-person companies. They have value. Hundred percent. But you have to look at where does the next wave of innovation come from. Be more progressive in your partnership strategy. And lastly, I would say that if your selection and your partnership model allow for proof points along the way, show what you have and then earn your business. If your sourcing vendor management approach is built around that, you will open the doors for companies to come, and it you know show you what’s possible beyond the obvious. So that would be my a few pieces of advice. Shiv?
Shiv Iyer — President, Everforth[23:24]
Yeah, look, here’s what I would say. I would say for CIOs in today’s age, I would say maybe go beyond one. A couple of things, sort of. The first is I would say be aggressive and very, very futuristic in your North Star and vision for the organization, but be very, very flexible in your execution and be willing to change direction because technology is changing at a pace none of us can keep track of. And be mindful that you don’t create a new form of technical debt. Because you know, you are introducing things into your architecture that you have no idea how you’re going to control and govern over time. And as Amit said, I don’t believe the days of you don’t get fired if you hire an IBM are true anymore. Because real expertise doesn’t lie in the in the corridors of monolithic organizations. And I think that would be my advice to CIOs. Look beyond the surface. Be inflexible and very, very aggressive in your vision, but be very flexible in your execution.
Saurabh Gupta — President, Research and Advisory Services, HFS Research[24:36]
Yeah. Shiv and Amit, thank you so much for spending some time with us and sharing your words of wisdom. I really, really appreciate it. And I for all that are listening into this into this videocast, I would say I to be completely honest, I first heard of Quinnox about nine months back and I spent half a day in your Chicago offices just going through the entire platform. And I was like, my God, this is a company that’s bringing whatever we’ve theorized as services, as software, into life with your AMS solution. And now with bigger scale and bigger size of Everforth coming to picture, I think the supplier landscape in the IT services is flattening. And I don’t think it’s just the… obviously the big boys have a lot to bring, but I think firms like yours are truly disruptors and challengers in the market. And I think we should give each all of us a shot in the arm, a shot to make things successful. But as you rightly mentioned, I don’t think we can keep looking at the past and assume the future will be bright. But on that note, thank you so much again for spending some time. We could talk for hours, but you know, we’ve got limited time. So, thank thanks a lot.
Amit Nagar — Chief Executive Officer, Quinnox[26:04]
Thank you.
Shiv Iyer — President, Everforth[26:05]
Thank you. Appreciate it. Thank you. Thank you, Saurabh.
