TCS eyeing to use Microsoft AI partnership to improve margins

Seeking to win higher margins to fuel growth, Tata Consultancy Services Ltd is betting on its partnership with Microsoft Corp to develop artificial intelligence-based software services for clients.  

TCS has deepened its collaboration with Azure OpenAI, the association between Microsoft and Sam Altman-led OpenAI. It’s also using cloud-based AI tool GitHub Copilot to offer solu solutions such as fraud detection to financial services clients or personalized customer services to retailers.   

TCS CEO K Krithivasan stated that they are working with Microsoft to build industry-specific solutions that can be taken to market together. However, it will take a few quarters before the partnership reaches a significant level to make a difference to TCS’s overall market. 

TCS is embedding AI technology in its software offerings. This has helped the company win large deals. With over 100,000 generative AI-ready employees, TCS is well-positioned to leverage this technology to its advantage. 

TCS, alongside other Indian IT firms like Infosys, initially capitalized on the dot-com boom in the late 1990s to offer affordable backoffice operations. Since then, they have evolved into IT service providers for major global enterprises such as Apple, Merck, Vodafone, and PepsiCo, contributing to India’s thriving software services sector worth over $245 billion. 

Owing to factors like global recession and geopolitical tensions, the traditional outsourcing business faces margin pressures. Indian IT firms are therefore banking on technologies like big data, machine learning, analytics, cloud computing, and AI to assist clients in transforming their businesses and compete against agile startups.