Despite 2020 being a challenging year for businesses due to Covid-19 pandemic, many reports indicate that organisations are prioritising and accelerating their digital transformation journey by deploying modern technologies which are also reflecting in the sudden surge in the demand of digital solutions across all industries globally.
The New Delhi headquartered low code digital automation platform provider Newgen Software Q2 FY'21, cloud-based solutions have witnessed a growth of 42% YoY and its revenue from the US and APAC regions have registered a robust growth of 11% YoY and 39% YoY respectively.
Furthermore, there is an increase in the demand for digital transformation initiatives across different sectors, including banking and financial services, shared services, and government agencies, said a senior executive.
“The pandemic has reinstated the importance of digitisation in the modern world. The IT industry is the backbone that is assisting organisations across the globe to manage the crisis effectively by building technology products and platforms to boost productivity, enhance efficiency, and maintain business continuity,” said Diwakar Nigam, Chairman and Managing Director, Newgen Software in an exclusive interview with Tech Observer's Shalini Shukla.
He added: “The government needs to rapidly adopt digital for providing citizen-centric services and introduce initiatives and campaigns whereby companies operating in India should be encouraged to invest in natively-built technologies. Special provisions or norms can be established to enable Indian companies to foster a culture of innovation and help promote their development. The government should aim to provide a level-playing field for Indian companies. Additional incentives, such as streamlined SEZ processes and labour laws in the IT sector, can boost the growth of software product companies in India.
Edited Excerpts:
What is your overall assessment of the IT sector in times of pandemic?
The pandemic has reinstated the importance of digitisation in the modern world. The IT industry is the backbone that is assisting organisations across the globe to manage the crisis effectively by building technology products and platforms to boost productivity, enhance efficiency, and maintain business continuity.
Government initiatives like Make in India and Vocal for Local are promoting the growth of Indian IT companies and boosting the demand for home-grown software. This would further play an important role in creating employment opportunities and help strengthen the Indian economy.
Has the pandemic impacted your overall business outlook?
During COVID-19, there has been a surge in the demand and adoption of digital solutions across all industries globally. In this regard, our digital automation platform, with low code and cloud capabilities, has been helping organisations quickly respond to the evolving business needs, efficiently automate their broken processes, and enable anytime, anywhere operations.
As of Q2 FY'21, Newgen's cloud-based solutions have witnessed a growth of 42% YoY. Our revenues from the US and APAC regions have witnessed a robust growth of 11% YoY and 39% YoY respectively. Furthermore, there is an increase in the demand for digital transformation initiatives across different sectors, including banking and financial services, shared services, and government agencies.
We look forward to helping our customers with our innovative products and purpose-built solutions across verticals.
What kind of expectations do you have from the Indian market this financial year?
This has been a challenging year for businesses due to the COVID-19 pandemic. However, with organisations prioritising digital adoption, we are looking forward to leveraging new opportunities across industries.
India has contributed to 30% of our total revenue in Q2 FY'21. We have seen a good performance with demand uptick for digital solutions across all verticals, including the financial sector, shared services, and government agencies.
We are expanding our banking solution funnel from lending and digital onboarding to multiple solutions in trade finance. With AI/ML-driven innovations and cloud-based applications, we continue to build on our success in insurance, government, and other sectors in India.
We expect a similar momentum to continue in the medium and long-term. Additionally, with the anticipated launch of the vaccine, things can slowly start resuming towards normal operations, further benefiting the business.
How is your R&D placed and what kind of investment are you making in it?
Investing in research and development (R&D) gives businesses a competitive advantage to stay ahead of the curve. R&D is one of our key strategic focuses.
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Nearly 9-10% of our revenue is invested in R&D where we are building a skilled team of over 500 people with deep subject expertise. As of Q2 FY'21, we have 44 patent fillings, out of which 15 patents are granted in India and the USA. Sixteen patent applications are under processing. The patents help us in building cutting-edge, industry-specific applications to cater to the dynamic business requirements of our customers.
What policy supports the government can offer under the Make in India initiative for the IT sector to grow further?
The government needs to rapidly adopt digital for providing citizen-centric services and introduce initiatives and campaigns whereby companies operating in India should be encouraged to invest in natively-built technologies. Special provisions or norms can be established to enable Indian companies to foster a culture of innovation and help promote their development. The government should aim to provide a level-playing field for Indian companies.
Additional incentives, such as streamlined SEZ processes and labour laws in the IT sector, can boost the growth of software product companies in India.
