Incedo, a US-based digital transformation services and platforms provider, has bucked the trend of the recent tech correction that has assailed many companies. Rather than retrenching, the company is, in fact, expanding — it recently expanded its Global Delivery Centres in Pune and Chennai, and has plans for global expansion in years to come.
In an interview with CNBC-TV18.com, Incedo Co-Founder and Chief Executive Officer Nitin Seth said Incedo crested the recent troubles as it is a services-focused company, and that the products sector witnessed the lion's share of the correction — so much so that Incedo is anticipating a 30-35 percent growth in 2023.
"We are very bullish on 2023. We are projecting a 30-35 percent growth. There are different technologies within the technology space — the digital space continues to be very, very robust. The products space — the platforms space — I think, there was irrational exuberance and a lot of spending happened in the past couple of years," Seth says.
US-based Seth, who was in India for the Global Delivery Centre expansion, says returning to the country always recharges him and that India's moment to shine has come.
"I come to India I feel recharged. Seriously, the energy levels — in technology, services and other industries — this is our moment. Energy levels and the opportunities are incredible," Seth says, adding, "COVID has hit many industries badly. It has hurt workforce, and customer service very badly. India has managed COVID quite well. For the Indian industry it has been quite a boon… given what has happened elsewhere… the excitement the world is feeling of India is quite something."
Recently, several technology companies were gutted by a sharp fall in COVID-fuelled demand, with several announcing layoffs in the tens of thousands, and others — which were overvalued — taking other, drastic cost-cutting measures.
"Certain companies that benefited from the tech boom in the last two years were overvalued," Seth says, while also laying the blame at the feet of Big Tech. "The likes of Amazon, Microsoft and Google were equally or more to blame."
"Because what happened in the US was, given the great growth of demand in cloud, if you’re an architect, and you were paid $200,000, in six months you were paid $300,000 — and these companies did that. They have a solid market presence. These three big giants contributed a lot to the frenzy," Seth explained.
"In terms of services, there is much less of a correction; it was not as volatile in terms of demand, so the downside was also not that much," he added, explaining how Incedo insulated itself. Further, he said, the nature of services is that there is always a demand, and while the sector may see lower growth, there is no reason to be concerned. "In the last two years, companies were reporting 35-40 percent (of growth). This year, it may not be that much."
"But the level of spending they have established on cloud, automation, data, AI, etc, over the last two three years has gone up. This year, they are not going to spend more, but they will spend just as much. The growth rate may come down, but the absolute level of spending — the curve has already shifted and is stabilising at a level that is significantly higher than it was before," Seth explained.
Incedo — which offers services in banking, wealth management, telecom, life sciences and product engineering — has a global workforce of 4,000, including 3,000 in India. He says they will add 1,000 more employees just in India this year.
"We are very bullish ... we largely work with Fortune 100 or Fortune 200 companies, not small startups. We are 100 percent focused on digital. From both the client perspective and the nature of work we do, the demand is very strong," Seth says.
He said Incedo is developing a global footprint, but India is where the sharpest growth will be seen. "In addition to the US and India, we set up shop last year in Mexico, but the disproportionate growth is certainly in India — from talent, capability, and work ethic perspectives, India offers a unique proposition," he said.
Incedo has five centres in India — it started with Global Delivery Centres in Gurgaon and Bengaluru. A couple of years of ago, it started centres in Hyderabad and Pune. Last year, it set up a centre in Chennai and this year, it is expanding in Pune and Chennai.
Seth sounded confident that they will achieve their growth target, which he said is sustainable. "The overall digital market is growing at 18 percent. Last year, our CAGR (compounded annual growth rate) has been 28 percent. Our target is 27-30 percent. We are growing faster than the market. We believe that is an aggressive but sustainable growth rate. Anything more will not be sustainable — talent, deliverables will suffer. That is how we want to consistently grow," he said.
The key is how a company develops and absorbs its talent, he added.
"You have to build your pyramid in a way that you absorb your talent at the bottom — if you bring talent at the top, it will be difficult to assimilate into your culture and work processes. Work can get done, but culture and assimilation is important. Knowledge management is a critical thing. There are multiple supporting processes that you can put in place."
On future plans
Given that most of Incedo's clients are in the US, Seth said the company's focus for the next few years is on Latin America.
"We have been researching that market for about 18-24 months. We did our secondary research, primary research, worked with partners in different geographies, and then finally, at the start of 2022, we set up our first centre in Guadalajara, Mexico. We are looking at other markets — Costa Rica, Colombia, etc. Every market is unqiue, it has its own culture, and we want to assimilate that into Incedo’s culture. And it is not an easy process," he says.
However, that does not mean they are not looking at other parts of the world.
"By 2024-25, we aim to go public, and around the same time, we will be looking to make a major market expansion into Europe," Seth said.
