TCS looks to make automation software unit a standalone firm

As it prepares for the next phase of growth of its cognitive automation software ignio, TCS is looking to build the product as a standalone company.

Developed within TCS Research & Innovation Labs in 2015, ignio has evolved as a top performing software globally, clocking revenue of $31 million in just its third year. Around 50 firms globally, many of which are Fortune 500 companies, use the software at present, with average revenue per customer of $550,000 per annum. However while most of its users are from TCS’s existing client base, the software major plans to offer it as a standalone product, even offering the same to rival service providers.

“Ignio is a standalone brand and has been built to potentially be a standalone product company, both in terms of business model and architecture,” said Rajesh Gopinathan, CEO and MD of TCS.

He said ignio as a product has been able to meet the expectations of clients by delivering value within weeks after deployment, which has made Digitate — the TCS unit that owns ignio — “among the best performing software product companies within the first three years”. The product has over 75 patents filed in the AI, machine learning and intelligent automation spaces.

Ignio competes with Wipro Holmes and Infosys NIA, among others, although the firm said Ignio offers a crossplatform solution including cognitive reasoning as well as contextual automation solutions. IBM Watson also offers automat ion solutions but combines with a larger spread of technologies for enterprises.

According to analysts, for an artificial intelligence (AI)based product like ignio to be successful, enhancing the user base is extremely critical, which TCS is looking to drive now. This is because the product requires a lot of user data to continuously learn and improve the expertise.

"In the past, Infosys also carved a separate identity for their banking solution (Finacle) to the extent that even competitors used it. So, if TCS seeks to compete with product companies, a separate identity is likely to boost adoption among competitors," said Pareekh Jain, senior vice-president (research), and managing director (India) of HfS Research.

“While similar products are available in the market from software providers, there will still be players who do not have this solution and could benefit from an AI product.”

Around 83 per cent of ignio’s revenue is generated from licensed contracts and the rest contributed by services. ignio clients are largely from retail at 25 per cent, BFSI (banking, financial services and insurance) at 22 per cent, followed by energy and utilities at 14 per cent.