Indian IT Can’t Get Rid of GCCs
Indian IT companies are now teaming up with global capability centres (GCCs) as multinational corporations set up offices in India. What once seemed like a rivalry between these two sectors has transformed into a perfectly collaborative journey. IT firms have partnered with GCCs to aid in their establishment and operations within the country. In turn, the GCCs allow these MNCs to leverage the country’s vast pool of tech talent directly instead of relying on service companies for all the work. Looks Too Good to be True India’s GCC sector, which employs over 1.6 million professionals, continues to thrive. According to projections, by 2030, the country is likely to have over 2,400 GCCs, creating over 4.5 million jobs and boosting the market size from $45 billion to $110 billion. However, the talent pool might not be enough for both industries in the coming years. Delivering 4.5 million jobs over the next five years just for GCCs does not seem enough, as there would be nothing left for Indian IT. Despite this, Mohandas Pai, former CFO of Infosys, believes that both Indian IT and GCCs will thrive because of the large pool of talent that will be ready in the coming years. “Some of them will move from IT companies to GCCs because the latter pay better. But on the downside, the work at many of these GCCs would not be as exciting and diverse as the IT companies,” Pai told AIM. Pai predicts that this would result in an almost even distribution of the workforce in both industries. “There is enough stock of people in this country,” he said, explaining that India has around six million people “in stock”, with around 600,000 being added every year. This includes freshers and experienced people looking for roles in IT and GCCs. He added that there is going to be a lot of poaching as well. But it might not be more than maybe 1,000 people in a month. “GCCs are becoming more and more specialised because the parent company is focusing on critical and concrete things.” He added that there has always been competition between MNCs and Indian IT companies for the last 25 years, and this competition is also going to continue. Collaboration with One, Competition with Others Pai continued that Indian ITs are always going to collaborate with certain GCCs because most of them work with the parent company that has a GCC in India. When it comes to the parent company of the GCC, they would also want to own a part of the technology instead of completely outsourcing everything to IT. Pai said that is why they set up GCCs in India instead of working in the home country, as it helps reduce the expenditure while making a critical technology. This is also why GCCs in India are heavily focused on building AI capabilities and driving AI transformation within their organisations. About 70% of India’s GCCs are reportedly adopting generative AI. The most sought-after tech roles in GCCs include software engineers, developers, data specialists, AI and machine learning experts, cloud computing professionals, and cybersecurity specialists. Now, since Indian IT is providing them with such skills and there’s a likelihood of GCCs poaching them, there might be a tough relationship between GCCs that work with a specific IT client and the others that don’t. As GCCs establish their presence in India, there’s a growing opportunity for the young talent in the country to leverage their skills in generative AI for a lucrative career with them. Mrinal Rai, assistant director and principal analyst at ISG, told AIM that since both service providers and GCCs are competing for the same talent pool, and given that the GCCs offer significantly higher packages and better designations to freshers, it gets challenging for service providers. Indian IT is Happy for Now Speaking about the surge of GCCs, Nachiket Deshpande, COO at LTIMindtree, told AIM that he has always maintained that GCCs and Indian IT are going to co-exist. “There is a role for them, and there is a role for us,” he said, adding that financial services are one of the largest verticals for LTIMindtree, and GCC is not new for financial services. Deshpande said that LTIMindtree’s partners have had a fairly large GCC base over the past 25 years, and the company continues to work collaboratively with them. He added that the model is not new to the firm. “I think a lot of people in other industries are experimenting with it for the first time and that’s where a lot of flow has started coming in,” he added. LTIMindtree helps the GCCs in three ways: setting up their offices, providing services like talent acquisition, or providing them with skillsets as partners. Deshpande added that LTIMindtree has the unique advantage of offering them real estate and technology. All of this rings similar to what other IT giants have said in their latest earnings calls. “Half of the new GCCs established in the past one to two years have relied on external IT firms for setup support,” Infosys CEO Salil Parekh said. Wipro CEO Srini Pallia said, “We have trained 230,000 employees in generative AI and have 44,000 advanced AI experts. This allows us to partner with GCCs in executing projects, creating a win-win for both.” Meanwhile, HCLTech CEO C Vijayakumar said, “Certain types of work are better suited for outsourcing, and others are more aligned with in-house operations.” He also dismissed concerns about GCCs eating into the market share of IT firms, explaining that the $1 trillion addressable market for global system integrators ensures ample growth opportunities. Accenture’s investment in ANSR, which helps companies establish GCCs in India, also hints at a growing collaboration. Vikram Ahuja, the co-founder of ANSR, has previously said that it is a misconception that Indian IT and GCCs are competing with each other. The firm partners with GCCs to oversee over 30,000 staff from IT services. He added that around 85% of their GCC customers also work with IT services companies in some regard. It seems like 2025 might be the year we see more poaching and competition amongst Indian IT and the GCCs of the clients of their rivals.
Indian ITs are always going to collaborate with certain GCCs because most of them work with the parent company that has a GCC in India.
Indian ITs are always going to collaborate with certain GCCs because most of them work with the parent company that has a GCC in India.
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["AI", "machine learning", "generative AI", "Aim", "RAG", "cloud computing", "R", "Go", "GAN", "AI transformation"]
Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.