TCS eyeing to use Microsoft AI partnership to improve margins

Tata Consultancy Services Ltd, an Indian multinational information technology service and consulting company, is looking to increase its margins to support growth. To achieve this, the company is relying on the tech giant Microsoft AI partnership to develop innovative AI-based software services for its clients.

By leveraging Microsoft's cutting-edge technology and TCS's expertise in the IT sector, the collaboration aims to offer clients advanced and customized AI solutions to enhance their operations and drive business growth. This strategic move reflects TCS's commitment to staying ahead of the curve and delivering value to its clients through innovative and emerging technologies.

Tata Consultancy Services (TCS) has strengthened its partnership with Azure OpenAI, a joint venture between Microsoft and OpenAI led by Sam Altman. In this collaboration, TCS harnesses the power of the cloud-based AI tool GitHub Copilot to deliver innovative solutions. These range from implementing advanced fraud detection systems for financial service clients to providing personalized customer services for retailers. By leveraging cutting-edge technology, TCS enhances security measures in the financial sector, detecting anomalies in real time.

Simultaneously, it enriches the retail experience by analyzing customer data, enabling tailored recommendations, and bolstering customer satisfaction. This deepened collaboration underscores TCS's commitment to revolutionizing diverse industries through AI-driven solutions.

TCS is looking forward to encapsulating the AI boom

TCS CEO K Krithivasan stated that they are working with Microsoft AI 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 in 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 back-office 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. 

Due to the global recession and geopolitical tensions, the traditional outsourcing industry is experiencing margin pressures. In response, Indian IT firms are focusing on advanced technologies such as big data, machine learning, analytics, cloud computing, and AI to help clients transform their businesses and remain competitive against more agile startups.