Davos. Shireen is with us from the World Economic Forum in Davos, where she's joined by K. Krithivasan, the CEO and MD at TCS. Shireen, take it over.
Our conversations continue here in Davos, and it's a flurry of tech companies that you're watching here on CNBC TV18. You just heard from Tech Mahindra's Mohit Joshi on why he believes 2025 could be a year where the IT industry could see, in his words, explosive growth. Joining me now to talk about the outlook, not for the next quarter because you've heard that being done threadbare on the channel, is K. Krithivasan of TCS. K., thank you so much for joining us here on a very cold and early morning in Davos. If only AI could fix this weather.
Absolutely, absolutely. It'll be fantastic.
So K., you know, as I said, through the last decimal point your numbers have been discussed, the performance for the quarter. But let me ask you a more big picture question. When we last spoke here, you had said that your effort was going to be to bring the engineering culture back at TCS. A year and a half on, do you believe that the engineering culture is back?
See, we have made a lot of progress. It's not that, as I explained last year also, it's not that we had lost it, but we wanted to re-emphasize the engineering culture. And it also fits in very well with the way the world is going towards generative AI. And we have made more than 500,000 people trained on generative AI. We have made investments in tools like WisdomNext. So I believe that we are moving in the right direction.
Moving in the right direction. Since you talked about AI, and you know your slogan here in Davos on your lounge says 'TCS: The Perpetually Adaptive Enterprise.' Explain to us what that means in terms of strategy.
First, let me explain what we mean by that. For us, there is so much change happening in the world, be it in the climate, geopolitics, new technology coming in, supply chain disruption. And we believe any organization to be successful, they need to adapt continuously. And they have to adapt in terms of what they sell in the market, how they train their workforce, and how they interact with that supply chain. And within TCS, our approach towards this is coming up with newer solutions, newer offerings to customers, continuously looking at what customers need. And equally important is continuously training our workforce, because we believe that with generative AI becoming more and more mainstream, the role of a programmer will continuously shift. Like if today we have 100 programmers doing a set of activity, maybe we'll not need 100 programmers, but we'll need more people that will be training the model, somebody orchestrating all the models to deliver the value for the activity. So there is a lot of training going on right now.
So you know, when you say that you won't need 100 programmers, I'm asking you this in the context of the absolute numbers. You may not need 100 programmers, but do you see the headcount changing?
That we've been saying again and again, like our belief on this technology, like the previous waves of technology changes, is the number of people that we need will not come down, but what these people will do will change. That's where the Adaptive Enterprise comes into place. People have to learn new skills, develop new capabilities in terms of how do you work with these generative AI models and deliver the end solution to the customer. So it'll be more from the same, that is the expectation. Definitely more from the same. Maybe even our going-in belief is we'll end up having more people than what we have.
More people, actually, because the quantum of work that will be delivered will be much more than what is being delivered now. Over what time? What does that mean in terms of...
I don't want to put a timeline to it because it's over a period of time, but I don't think we are fearing the reduction in the amount of people required to do that. Like we are gearing up to have more people do the work.
Gearing up to have more people. That's an important headline coming in here from K. Krithivasan of TCS. More people, not less, in an AI world, in an AI era. K., you know what surprised many people was the fact that you actually called out 2025 to be a better year than 2024, which is not usually the case as far as TCS is concerned, given that you don't hold out any guidance. What gives you confidence to say that the year ahead is likely to be better?
The most important thing is the conversations that we are having with our customers, and the second, as we talked about, is our order book and the pipeline. And all of them put together collectively, we believe that there is a sense of optimism slowly coming back to our customers. And we also saw a couple of things, like some of the discretionary programs are getting kicked off. And most importantly, in some of the discretionary programs, the time taken to decide, the deal cycle, also reduced. So all of them collectively give us a feeling that this could be, 2025 could be a better year than, I'm sorry, 2024. 2025 will be a better year.
I wonder if you were up at night watching President Trump and what he had to say. But what's the outlook on what that could mean, especially on the part of the measures for deregulation, which of course are yet to be specified? But what could that potentially mean, especially for the financial sector, because there is talk about specific deregulation there too?
There is definitely a lot of optimism in the financial services, because regulation takes away a lot of the management bandwidth and also a certain amount of allocation of funds towards new programs. So be it the financial services sector, maybe sometime later even in the healthcare sector, we believe that it could actually spin off new interesting discretionary programs that they've not been able to do before. So it's net-net positive. Like the most of the banks that I've been talking to, they are very optimistic on things to come.
So banks are optimistic on what deregulation could mean, and healthcare as well. You're more cautious, had it not because we don't know what they are going to do, but the general atmosphere of deregulation is being seen very positive. And you believe that that could have a spin-off impact as far as...
Definitely have a positive impact.
Positive impact. Let's continue to talk about AI, and you were talking about the capacity and capability building within TCS. And you know, I was having a conversation with Frank D'Souza, formerly of Cognizant, here in Davos, and his belief was that Indian IT services is at an inflection point or in a transition period where it'll have to be much more IP-driven now in our business, so to speak. As somebody commented on that interview, what role does IP really play?
It does. See, it has a very important role to play. Like for instance, the only thing is like IP cannot be, should not be classified only as someone having a new LLM or a new product. Like for instance, in TCS, if you take, we continuously apply for patents, okay? And these patents are applied to develop our products and services. But there is time, I think it's also a question of timing. Like we have, over a period of last 20 years, we have developed the capability. You find many new startups coming up with new IP, new apps. I think it's an important thing to focus on, and every organization is focused on developing IP. So see, IP, the value it gives is it breaks that linearity, right? Like without IP, pure services, there is a certain amount of linearity between how many people you put and what is the overall...
