French IT services major Capgemini is betting big on the so-called ‘intelligent industry’, which basically refers to the next stage of digital transformation powered by data, 5G, edge computing, artificial intelligence (AI), and the internet of things (IoT). It has also done several acquisitions to push this agenda. Based on a strong third quarter earnings, the company has raised its revenue growth target for 2021 to 14.5-15.0% in constant currency. India is Capgemini’s single largest talent hub with over 150,000 employees out of its total headcount of 309,300. In an interview, Ashwin Yardi, CEO of Capgemini in India, talks about the growth outlook, acquisition strategy, and explains what he means by 'intelligent industry'. Edited excerpts:
What has given Capgemini the confidence to raise its 2021 revenue growth outlook?
The IT services market is expanding at an exponential pace globally as well as in India. The rising adoption of emerging technologies like cloud, data analytics and AI, engineering and R&D, blockchain, cybersecurity, 5G and edge across industries is a major growth driver. Every industry across the world is focusing on digitizing their key industrial parts of their businesses, using more embedded software, data, AI, new generation wireless connectivity and other digital technologies to rethink the products and processes they offer to their clients, rethink their own operations, and invent new services and business models.
Capgemini’s revenue growth outlook is reflective of the strong growth achieved in Q3 (third quarter) and past few quarters across sectors and regions. The next phase of growth will be driven by what we at Capgemini call ‘intelligent industry’. Businesses taking an intelligent industry approach will see a wide range of benefits, such as new and differentiated products, reduced costs, increased efficiency of production, new as-a-service business models, and faster times to market. It is also testimony to our focused strategy and portfolio shift that has been undertaken in last couple of years.
Will 5G be a key focus area for Capgemini in India?
At Capgemini, we recognize the power of 5G powered by edge computing and how this can revolutionize industries across sectors. We recently announced our collaboration with Qualcomm Technologies to unlock the benefits of 5G private networks to support their clients’ digital transformation towards intelligent industry. 5G and edge computing will be the technologies that catalyze data-driven transformation towards intelligent industry. They will change the way enterprises, governments, and consumers interact and do business, leading to path breaking innovations and services. As part of Capgemini’s global collaboration with Ericsson, Capgemini will deploy 5G solutions from Ericsson at its 5G Lab in Mumbai to enable industry experimentations and deployment of 5G and edge technologies for customers across industries. The Capgemini 5G Lab is fully aligned with Ericsson’s Industry Connect strategy. The Capgemini 5G Lab offers live demos for numerous use-case applications across industries.
How is the acquisition of Altran helping your engineering and R&D capabilities?
Earlier this year, we launched Capgemini Engineering which consolidates our market leading capabilities in engineering and R&D. This global business line, with 52,000 engineers and scientists and a presence in all major engineering hubs across the world, builds on the integration of Altran, one year on from its acquisition by Capgemini. With the integration of Altran and Capgemini Engineering, we now have full capabilities in both industrial and digital technologies – to design, develop and deliver tomorrow’s products and services. Capgemini can now help every type of organization develop intelligent products and systems, intelligent operations, and intelligent support and services, all powered by data, and according to their specific business and operational challenges. This is what we call as intelligent industry, which is the next-gen digital transformation.
Will we see more such acquisitions?
Historically, Capgemini has done many acquisitions and we have been able to successfully integrate and leverage capabilities to grow through these acquisitions. Apart from the Altran acquisition last year, we also completed the acquisition of Australia-based RXP Services in March. The unique combination of expertise makes Capgemini a market leader in Australia and New Zealand across digital, data and cloud and supports the group’s growth ambition in the Asia-Pacific region.
In July, Capgemini announced proposal to acquire Australian cloud transformation and digital services provider, Empired. This acquisition would significantly increase the size of Capgemini’s business in Australia and New Zealand and position it as a market leader in digital, data, and cloud across the region. In the same month, Capgemini also acquired leading Australian SAP consulting and digital solution provider Acclimation which will reinforce Capgemini’s partnership with SAP in Australia and further accelerate clients’ business transformations. Capgemini has also acquired Multibook’s SAP services business in Japan and South East Asia, which will enable us to help more clients in Japan and support the group’s growth ambition in the Asia-Pacific region.