Indian IT’s Love-Hate Affair with GCCs

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Sector 6 The Daily Newsletter of AIM ________________________________________________________ December 24, 2024 ∙ 3 min read ∙ Visit AIM Hey there! Your AI Human, Amit Raja Naik, is back with an interesting take on Indian IT and GCCs teaming up—because in this tango, it takes two to tech-o! Indian IT companies and global capability centres (GCCs) are blending collaboration with quiet competition. GCCs set up by multinational corporations to leverage India’s tech talent directly are expanding rapidly. With over 1.6 million professionals already employed, the sector is projected to grow to 2,400 GCCs by 2030, creating 4.5 million jobs and pushing market value from $45 billion to $110 billion. GCCs are luring talent with higher pay and attractive titles, causing tension with IT firms. “Some of them will move from IT companies to GCCs because the latter pay better. But the work may not be as exciting or diverse as IT companies,” noted Mohandas Pai, former Infosys CFO, in an interaction with AIM. As GCCs focus on specialised projects, their appeal grows, especially for roles in AI, machine learning, cloud computing, and cybersecurity. The competition isn’t limited to talent. GCCs are embracing generative AI at scale, with 70% adopting it to drive innovation. IT firms, however, aren’t sitting still. “We have trained 230,000 employees in generative AI and have 44,000 advanced AI experts,” said Wipro chief Srini Pallia, ensuring they remain valuable partners for GCCs and their parent companies. Yet, leaders believe coexistence is inevitable. “Certain types of work are better suited for outsourcing, and others for in-house operations,” said HCLTech chief Vijaykumar C. This symbiotic model allows GCCs to manage critical tasks while IT firms handle broader service needs. “There is a role for them, and there is a role for us,” resonated LTIMindtree chief operating officer Nachiket Deshpande.  What’s clear is that both sectors are reshaping India’s tech landscape, with partnerships, poaching, and competition all playing a role. Will IT firms and GCCs continue to complement each other, or will the race for talent tip the scales? Read to find out. AGI and its uncertain future: Are we ready to regulate the next leap in intelligence? Click here for an insightful exploration of this emerging frontier. Pay the AI, Not the Price AI promises a smarter future—but at what cost? Companies like Zendesk, Intercom, and Replit are experimenting with ‘outcome-based pricing,’ where customers pay only for tangible results, not flat fees or usage metrics. From $0.99 per resolved ticket to checkpoint-based systems, this model seems promising for customer service. But things get murkier outside customer support. Determining clear outcomes is tricky—what happens when an AI contributes to a result but isn’t solely responsible? Experts warn of blurred lines between outputs and outcomes, raising concerns about fairness and value. For now, outcome-based pricing works where the results are clear, but for broader AI use, it’s still a moonshot. Are businesses ready to shift their thinking—or is flat-fee simplicity here to stay? Read to find out. AI’s double-edged sword: Are we ready for its promise—and its peril? Click here for a deep dive into AI governance and cybersecurity. Customer First, NVIDIA Next Amazon’s customer obsession is now targeting NVIDIA’s base. At AWS re:Invent, the tech giant unveiled Trainium2, boasting 30-40% better price performance than NVIDIA’s GPUs. Major customers like Anthropic, Adobe, and even Apple are embracing AWS’s AI chips, signalling a shift in the high-stakes hardware market. Amazon’s $4 billion bet on Anthropic has also birthed Project Rainier, a supercluster designed to supercharge AI models like Claude. But here’s the catch: NVIDIA’s CUDA remains a tough ecosystem to leave. Can Amazon’s customer-first innovation break the stranglehold? Read to find out. Taking AI to the Next Level: Why composable architectures are the secret sauce for scalable AI—click here for an in-depth exploration of this game-changing approach. How OpenAI Helped Lowe’s Build Smarter Shopping Before ChatGPT made waves, Lowe’s partnered with OpenAI to tackle one of retail’s toughest challenges – accurate product data for 16 million weekly transactions. By fine-tuning GPT-3.5, Lowe’s boosted error detection by 60% and search accuracy by 20%, streamlining operations and enhancing e-commerce growth Backed by its Bengaluru team’s scalable AI innovations, Lowe’s has set itself apart in a crowded retail landscape. From AI-driven product tagging to omnichannel order management, Lowe’s strategic adoption of generative AI ensures smoother shopping experiences and positions the brand as a leader in retail AI transformation. Read more here. Your daily dose of AI insights Eager to navigate the ever-evolving world of artificial intelligence and analytics? The key isn't just knowing what's new—it's immersing yourself in the community that's shaping tomorrow. ··· Enhance your expertise every day with the Sector 6 newsletter from AIM Media House. Explore More with AIM: Conference Calendar: Discover our upcoming events and conferences here. AIM Research: Stay ahead with the latest industry research at AIM Research. AIM TV: Watch expert interviews and discussions on our YouTube channel. Corporate AI Trainings: Elevate your team's skills with our AI training programs. AI Hackathons: Test your skills on our MachineHack platform. Best Firm Certification: Learn about our Best Firm certification. 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