Latest news with #SaurabhGupta
Economic Times
5 days ago
- Business
- Economic Times
IT grappling with cost pressures as pricing shifts from effort to outcomes
India's information technology services industry is facing heightened cost pressures on account of a fundamental shift in its pricing models, especially triggered by the productivity boost from artificial intelligence (AI), said industry executives and industry, which is estimated to have clocked revenue of about Rs 24.3 lakh crore ($283 billion) in 2024-25, is moving towards outcome-based pricing models, they said. With generative AI and Agentic AI boosting productivity by 20-40%, leading to swifter outcomes at lower costs, clients are asking why they are still paying the same per full-time equivalent (FTE). "Pricing is shifting from effort to outcomes, and that means a full-stack transformation-not just of how services are delivered, but how they're sold, priced and measured," said Saurabh Gupta, president, HFS Research. The traditional software services pricing model, he said, has largely revolved around rate-cards, FTEs and T&M . FTE refers to a unit of workload of a full-time working employee where clients pay per person based on the workload. T&M is a billing model where the client pays for the actual time spent and resources used. The announcement last week of the beginning of over 12,000 layoffs by TCS, underscored the pricing pressure in the industry, experts said, adding that IT players are forced to cannibalise their revenues even as they are yet to see returns on investments from their large bets on AI.
Time of India
5 days ago
- Business
- Time of India
IT grappling with cost pressures as pricing shifts from effort to outcomes
Academy Empower your mind, elevate your skills India's information technology services industry is facing heightened cost pressures on account of a fundamental shift in its pricing models, especially triggered by the productivity boost from artificial intelligence (AI), said industry executives and industry, which is estimated to have clocked revenue of about Rs 24.3 lakh crore ($283 billion) in 2024-25, is moving towards outcome-based pricing models, they generative AI and Agentic AI boosting productivity by 20-40%, leading to swifter outcomes at lower costs, clients are asking why they are still paying the same per full-time equivalent (FTE)."Pricing is shifting from effort to outcomes, and that means a full-stack transformation-not just of how services are delivered, but how they're sold, priced and measured," said Saurabh Gupta, president, HFS Research . The traditional software services pricing model, he said, has largely revolved around rate-cards, FTEs and T&M . FTE refers to a unit of workload of a full-time working employee where clients pay per person based on the workload. T&M is a billing model where the client pays for the actual time spent and resources announcement last week of the beginning of over 12,000 layoffs by TCS , underscored the pricing pressure in the industry, experts said, adding that IT players are forced to cannibalise their revenues even as they are yet to see returns on investments from their large bets on AI.
Gulf Business
31-07-2025
- Business
- Gulf Business
Dalands CEO on the rise of hotel-inspired branded residences in the UAE
Image: Supplied Recently, Scheduled to open in Q4 2027, this development will be co-located with the W Al Marjan Island hotel, blending vibrant hospitality with elevated residential living on one of the UAE's iconic beachfront destinations. This project marks a new phase in Dalands' expansion in the UAE, building on its track record in boutique resorts and luxury residences. In this interview, Saurabh Gupta, CEO of Dalands Holding, discusses how branded residences tied to hotel brands are becoming a more common part of the region's real estate market. He explains how hospitality principles are influencing design and service, the growth potential in Dubai and Ras Al Khaimah, and key trends shaping buyer preferences today and in the near future. How are hotels influencing branded residences? Nearly 80 per cent of branded residences globally are linked to hotel brands because the luxury hospitality sector has refined delivering lifestyle-rich experiences. At Dalands, we draw from hotel design, service culture, and brand storytelling to redefine what 'living well' means for residents and investors. What growth do you expect in hotel-inspired branded residences? Branded residences have moved beyond niche markets and represent a growing segment. Globally, the market has increased by 180 per cent in the past decade. Dubai holds 19 per cent of the global inventory and leads the Middle East with 51 operational projects and similar numbers in the pipeline. Ras Al Khaimah's Al Marjan Island is also attracting attention due to upcoming developments like the How does the experience economy affect this trend? Buyers today expect convenience, personalisation, and experiences beyond traditional real estate. We offer triple-layered value: beachfront location, fully furnished and internationally branded residences, and hospitality services through an onsite Marriott hotel. This integration isn't just branding for show — it's reflected in design, construction, and operations. What can buyers expect from W branded residences? The offering focuses on three pillars: Service excellence with concierge, security, housekeeping, and hospitality on par with top resorts. Design distinction, involving global designers working closely with our team and Marriott International. Amenity-driven living with wellness, entertainment, and social spaces like infinity pools, screening rooms, and yoga studios. What's the outlook for real estate growth in Ras Al Khaimah and other smaller emirates? Ras Al Khaimah and other emerging emirates are entering a growth phase with government support, key hospitality projects, and investor-friendly policies. Al Marjan Island is developing into a notable luxury lifestyle destination, and our project signals confidence in the Northern Emirates' potential. What real estate trends do you see impacting the sector? Several trends are shaping the sector. These include: Branded living becoming mainstream, with buyers seeking trusted names and curated services. A price premium for branded residences, about 30 per cent higher than comparable unbranded properties. Unique design aligned with brand identity replacing cookie-cutter styles. Wellness amenities and biophilic design becoming standard. Mixed-use developments combining residential, commercial, and recreational spaces gaining popularity. Millennial and Gen Z buyers influencing design and features as they become dominant market segments.
Economic Times
30-07-2025
- Business
- Economic Times
Rapid GCC growth reshapes India's outsourcing industry
ETtech Recent exponential growth of global capability centres (GCC) in India may have come at the expense of the people-led tech outsourcing industry – the country's biggest services exports over the past three decades and unquestionable change agents for once-sleepy towns such as Bengaluru, Pune, and which are setting up these GCCs or expanding existing facilities, are also the top spenders of tech for the $280-billion listed Indian pureplay. The increasing insourcing of core tech tasks – especially the top end, high-value work - may be leading to one of reasons for the current rot in the outsourcing industry, marked by a protracted slowdown and now mass-layoffs. For FY24, GCCs' grew at a rate of 40% even as the top five Indian IT companies posted negative to sub-5% growth for the same period and reported similar numbers for fiscal 2025, as per estimates by Nasscom and the industry. For the IT industry the subdued numbers continued in FY25. While the official numbers are yet to be out for GCCs, the growth is expected to be in double Indian technology services industry which operates in a pyramid structure by hiring more entry-level coders is now witnessing a foundational shift with AI, experts said. 'The pyramid is collapsing. GCCs are rising. AI is automating the middle. Pricing is shifting from effort to outcomes, and that means a full-stack transformation—not just of how services are delivered, but how they're sold, priced, and measured,' said Saurabh Gupta, president at US-based technology research and consultancy firm HFS Research. TCS Jobs Earlier this week, India's largest software exporter Tata Consultancy Services (TCS) announced that it is going to lay off around 2% or 12,200 people in the current fiscal as it grapples with low growth amid a challenging macro situation and AI-led disruption, sending shockwaves in the industry. According to an HFS data survey with 200-plus enterprises, over 65% enterprises expect to relocate at least 10% FTEs (full-time equivalent - which measures the work based on employees work hours) from third parties to have seen tremendous growth in the past few years as multinationals sought to leverage India's skilled talent and cost advantages. Estimates suggest that two new GCCs opened every week last year, increasing the total to 1,700 centres employing nearly 2 million Joshi, partner at another US-based Everest Group, said that the accelerating pace of GCCs in India is having an impact on the net demand for service providers, specifically in segments such as banking, financial services and insurance (BFSI) where these clients have scaled their GCCs in India. As per data by ANSR, over 50 banking GCCs run more than 90 centers in India employing over 180,000 professionals. Incidentally, BFSI contributes around anywhere between 30% and 50% of the revenue share for most Indian IT companies. Almost all large multinational banks and financial services firms have huge GCCs in India. In fact, firms like JPMorgan Chase, Wells Fargo have more employees in India than a mid-tier IT firm, with 50,000 people, representing roughly 20% of its global workforce. The IT industry employed around 5.4 million professionals as of FY24, while GCCs employed nearly 1.9 million people. Net addition of talent by GCCs in FY24 stood at 90,000 and surpassed 100,000 in year, GCCs hired a total of around 110,000 people, while India's top IT companies grew their headcount by a mere 13,500 in FY25, after a reduction of 64,000 in which typically function as back office operations for large overseas companies, established their presence more firmly in India post COVID. According to Ramkumar Ramamoorthy, partner at Catalincs, a tech growth advisory firm, GCCs have publicly stated that their focus will largely be on driving innovation using digital technologies, as they believe they are core to their business and they should own these capabilities. 'IT services companies which were once in denial about the impact of GCCs are today proactively forming crack teams to work alongside them to jointly shape and participate in their transformation and innovation agenda,' he says alluding to the investments and acquisitions by IT firms in the GCC space.'Large IT services companies have been stuck in a low single-digit, organic revenue growth cycle for three years in a row, " he said. Prominent companies collectively generated approximately $20 billion in free cash flow last year. 'The real question we should be asking is, are these companies reinvesting enough back into the business to rewire their business, operating and financial models for accelerated growth?''With a significant portion of the revenue coming from 'run the business' as opposed to 'change the business', from time-and-material (T&M) contracts as opposed to outcome or risk-reward based contracts, from pass-through revenue from product license sale as opposed to newer service opportunities such as cyber security, interactive and platforms, companies need to take bold, unconventional decisions to force-cannibalize revenue, where appropriate, and invest their way out. If they don't act now, we risk looking back in regret for having missed a generational opportunity,' Ramamoorthy added. The GCC Tilt As per government data, the industry had estimated revenues of $254 billion, marking a 3.8% YoY growth in FY24 (excluding e-commerce). Of this, GCCs contributed to $64.6 billion in the same period, industry body Nasscom numbers year, the government's Economic Survey also pointed out that the share of IT in India's services exports fell two percentage points over three years, while indicating an expansion of "other business services" which include GCCs of the growth has fastened at a time when the AI-led disruption is aiding more innovation and R&D work by multinationals based out of India as GCCs, which are no longer just back-office factories. Key leadership of many of these centres is based out of India making them key decision making destinations say, the 12,000 workforce layoffs announced by the largest Indian IT major TCS on Sunday is just the beginning as the Indian players are yet to get return on investments from the large AI investments made. With AI, many companies including GCCs and smaller tech firms are getting higher output with the same people. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Jane St: How an options trader smelt a rat when others raised a toast Why India's power market giant is bracing for a regulatory shock TCS job cuts may not stop at 12,000; its bench policy threatens more From near bankruptcy to blockbuster drug: How Khorakiwala turned around Wockhardt Stock Radar: SBI Life rebounds after testing 50-DEMA; could hit fresh record highs above Rs 2,000 – check target & stop loss These 10 banking stocks can give more than 25% returns in 1 year, according to analysts Two Trades for Today: A metals stock for an over 6% gain, a large-cap chemicals maker for about 7% upmove F&O Radar| Deploy Broken Wing in LIC Housing Finance to benefit from bearish outlook
Time of India
30-07-2025
- Business
- Time of India
Rapid GCC growth reshapes India's outsourcing industry
Academy Empower your mind, elevate your skills Recent exponential growth of global capability centres ( GCC ) in India may have come at the expense of the people-led tech outsourcing industry – the country's biggest services exports over the past three decades and unquestionable change agents for once-sleepy towns such as Bengaluru, Pune, and Hyderabad MNCs, which are setting up these GCCs or expanding existing facilities, are also the top spenders of tech for the $280-billion listed Indian pureplay. The increasing insourcing of core tech tasks – especially the top end, high-value work - may be leading to one of reasons for the current rot in the outsourcing industry, marked by a protracted slowdown and now FY24, GCCs' grew at a rate of 40% even as the top five Indian IT companies posted negative to sub-5% growth for the same period and reported similar numbers for fiscal 2025, as per estimates by Nasscom and the the IT industry the subdued numbers continued in FY25. While the official numbers are yet to be out for GCCs, the growth is expected to be in double Indian technology services industry which operates in a pyramid structure by hiring more entry-level coders is now witnessing a foundational shift with AI, experts said.'The pyramid is collapsing. GCCs are rising. AI is automating the middle. Pricing is shifting from effort to outcomes, and that means a full-stack transformation—not just of how services are delivered, but how they're sold, priced, and measured,' said Saurabh Gupta, president at US-based technology research and consultancy firm HFS Research Earlier this week, India's largest software exporter Tata Consultancy Services (TCS) announced that it is going to lay off around 2% or 12,200 people in the current fiscal as it grapples with low growth amid a challenging macro situation and AI-led disruption, sending shockwaves in the to an HFS data survey with 200-plus enterprises, over 65% enterprises expect to relocate at least 10% FTEs (full-time equivalent - which measures the work based on employees work hours) from third parties to have seen tremendous growth in the past few years as multinationals sought to leverage India's skilled talent and cost advantages. Estimates suggest that two new GCCs opened every week last year, increasing the total to 1,700 centres employing nearly 2 million Joshi, partner at another US-based Everest Group, said that the accelerating pace of GCCs in India is having an impact on the net demand for service providers, specifically in segments such as banking, financial services and insurance (BFSI) where these clients have scaled their GCCs in India. As per data by ANSR, over 50 banking GCCs run more than 90 centers in India employing over 180,000 BFSI contributes around anywhere between 30% and 50% of the revenue share for most Indian IT companies. Almost all large multinational banks and financial services firms have huge GCCs in India. In fact, firms like JPMorgan Chase , Wells Fargo have more employees in India than a mid-tier IT firm, with 50,000 people, representing roughly 20% of its global IT industry employed around 5.4 million professionals as of FY24, while GCCs employed nearly 1.9 million people. Net addition of talent by GCCs in FY24 stood at 90,000 and surpassed 100,000 in year, GCCs hired a total of around 110,000 people, while India's top IT companies grew their headcount by a mere 13,500 in FY25, after a reduction of 64,000 in which typically function as back office operations for large overseas companies, established their presence more firmly in India post to Ramkumar Ramamoorthy , partner at Catalincs, a tech growth advisory firm, GCCs have publicly stated that their focus to largely be on driving innovation using digital technologies, as they believe they are core to their business and they should own these capabilities.'IT services companies which were once in denial about the impact of GCCs are today proactively forming crack teams to work alongside them to jointly shape and participate in their transformation and innovation agenda,' he says alluding to the investments and acquisitions by IT firms in the GCC space.'Large IT services companies have been stuck in a low single-digit, organic revenue growth cycle for three years in a row, " he said. Prominent companies collectively generated approximately $20 billion in free cash flow last year. 'The real question we should be asking is, are these companies reinvesting enough back into the business to rewire their business, operating and financial models for accelerated growth?''With a significant portion of the revenue coming from 'run the business' as opposed to 'change the business', from time-and-material (T&M) contracts as opposed to outcome or risk-reward based contracts, from pass-through revenue from product license sale as opposed to newer service opportunities such as cyber security, interactive and platforms, companies need to take bold, unconventional decisions to force-cannibalize revenue, where appropriate, and invest their way out. If they don't act now, we risk looking back in regret for having missed a generational opportunity,' Ramamoorthy per government data, the industry had estimated revenues of $254 billion, marking a 3.8% YoY growth in FY24 (excluding e-commerce). Of this, GCCs contributed to $64.6 billion in the same period, industry body Nasscom numbers year, the government's Economic Survey also pointed out that the share of IT in India's services exports fell two percentage points over three years, while indicating an expansion of "other business services" which include GCCs of the growth has fastened at a time when the AI-led disruption is aiding more innovation and R&D work by multinationals based out of India as GCCs, which are no longer just back-office factories. Key leadership of many of these centres is based out of India making them key decision making destinations say, the 12,000 workforce layoffs announced by the largest Indian IT major TCS on Sunday is just the beginning as the Indian players are yet to get return on investments from the large AI investments made. With AI, many companies including GCCs and smaller tech firms are getting higher output with the same people.
