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Leading with Products: The Next Stage in the Evolution of IT Service Providers
There was a time when enterprises looked at IT service providers primarily as a source of inexpensive, trained engineers to manage their “mess for less.” Provider revenues were directly proportional to head count. There were sporadic discussions in provider boardrooms about the need for nonlinear growth, which led to an initial investment in in-house tools. Consequently, providers developed tools to accelerate their own backend operations, reduce delivery costs and timelines, and achieve annual cost reduction goals in their contracts. This paper showcases the HCL case study, one major provider that has been part of the trend to product-led services. Along with its Q3FY21 results, HCL announced it had reached USD 10B in annualized revenue for the calendar year 2020—a significant milestone. Interestingly, its Products & Platforms segment accounted for 16% of its calendar year revenue with nearly 30% YOY growth. Thus, reflecting how important those products are in its growth strategy.