Tata Consultancy Services: A Giant Legacy in the Global IT Landscape

Tata Consultancy Services (TCS), founded in 1968, stands as a testament to India’s emergence as a global IT powerhouse. As one of the oldest and largest IT firms in India, TCS has built a legacy rooted in innovation, resilience, and a deep commitment to shaping the future of technology. 

What started as a modest IT services subsidiary within the Tata Group has evolved into a global leader, known for its wide-reaching influence across industries and geographies. 

Over 5 decades, TCS has achieved numerous milestones, including being the first Indian IT company to cross the billion-dollar revenue mark and becoming a pioneer in exporting software services, establishing India as a premier global IT destination.

In this StartupTalky article, we will learn more about TCS’s startup story, founders, business model, revenue model, competitors, funding, investments, acquisition strategy, how these deals have shaped its growth, and what this means for the future of the IT giant.

Tata Consultancy Services - Company Highlights

Tata Consultancy Services - About
Tata Consultancy Services - Industry
Tata Consultancy Services - Founders and Team
Tata Consultancy Services - Startup Story
Tata Consultancy Services - Mission and Vision
Tata Consultancy Services - Name, Tagline and Logo
Tata Consultancy Services - Business Model
Tata Consultancy Services - Revenue Model
Tata Consultancy Services - Challenges Faced
Tata Consultancy Services - Investments
Tata Consultancy Services - Mergers and Acquisitions
Tata Consultancy Services - Growth
Tata Consultancy Services - Advertisements and Social Media Campaigns
Tata Consultancy Services - Awards and Achievements
Tata Consultancy Services - Competitors
Tata Consultancy Services - Future Plans

Tata Consultancy Services - About

Tata Consultancy Services (TCS) is more than an IT services firm—it’s a trusted partner for some of the world’s top organizations, helping them transform and thrive in an increasingly digital world. A technology powerhouse that has been shaping the future of global business for over half a century, with a consulting-first approach and advanced cognitive tools, TCS delivers a suite of business, technology, and engineering solutions, powered by its acclaimed Location Independent Agile™ model, setting a high standard in software development.

Tata Consultancy Services (TCS), a core member of India’s largest multinational group, the Tata Group, has established a vast global presence across 55 countries, with a talented team of over 601,000 professionals. In the fiscal year ending March 31, 2024, TCS reported impressive consolidated revenues of $29 billion and maintains a prominent position on both the BSE and NSE in India.

TCS is not just about business growth; it's about creating meaningful change. From a proactive approach to tackling climate issues to impactful community initiatives, TCS has earned a respected spot on top sustainability indices like the MSCI Global Sustainability Index and the FTSE4Good Emerging Index, underscoring its commitment to responsible and sustainable growth.

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Tata Consultancy Services - Industry

India has become a powerhouse in the global IT outsourcing arena, supported by its expanding market and vast pool of skilled professionals.

Market Revenue

India’s IT outsourcing sector is set to generate $11.04 billion in revenue in 2024. With a projected compound annual growth rate (CAGR) of 13.52% through 2029, the market size could reach $20.81 billion by the end of that period.

IT Spending

IT spending in India is on the rise, with forecasts showing an 11.1% increase in 2024, pushing total spending to $138.6 billion.

Skilled Talent Pool

India is home to 5.4 million IT professionals and as demand for digital skills grows, Amazon Web Services anticipates a nine-fold increase in digitally skilled workers by 2025.

Outsourcing Preference

India is a top choice for IT outsourcing, with 59% of American companies and nearly 60% of leading global enterprises outsourcing their IT projects to Indian firms.

Global Position

Though India is a leader in IT outsourcing, the U.S. remains the top revenue-generating market worldwide, with projected IT outsourcing revenues of $197.3 billion in 2024.

Tata Consultancy Services - Founders and Team

K. Krithivasan 

K. Krithivasan is the Chief Executive Officer and Managing Director of Tata Consultancy Services (TCS).

In his prior role, Krithi was the Global Head of the Banking, Financial Services, and Insurance (BFSI) Business Group at TCS. He played a pivotal role in strengthening customer relationships, increasing mindshare, and enhancing the company's market positioning across various geographies. With over three decades at TCS, Krithi has been instrumental in guiding customers through their growth, transformation journeys, and technology strategies.

Krithi holds a bachelor’s degree in Mechanical Engineering from the University of Madras and a master’s degree in Industrial and Management Engineering from IIT Kanpur. Outside of his professional endeavors, he is an avid reader and a fitness enthusiast.

Natarajan Chandrasekaran

Natarajan Chandrasekaran is the Chairman of Tata Sons and Tata Group.

Natarajan Chandrasekaran, often called “Chandra,” has risen from humble beginnings to become a prominent figure in the Indian IT industry. Born into a farming family in the village of Mohanur near Namakkal, Tamil Nadu, Chandra’s early education took place at a Tamil government school. Alongside his two brothers, he would walk three kilometers daily to school. This modest lifestyle continued into college, where Chandra and his brothers shared a small apartment in Chennai and commuted on a scooter.

Chandra pursued a Bachelor’s in Applied Sciences from Coimbatore Institute of Technology, followed by a Master’s in Computer Applications from the Regional Engineering College in Tiruchirappalli (now NIT Trichy), graduating in 1986. During his final year, he took on an assignment with Tata Consultancy Services (TCS), which marked the beginning of his journey with the company. Joining TCS formally in 1987, he steadily advanced to become COO and executive director, eventually taking the helm as CEO on October 6, 2009. He later became the Chairman of Tata Sons, joining the board of directors in 2016, and also served on the Reserve Bank of India's board that same year.

Chandra's dedication extends beyond work. An avid marathon runner, he completed the TCS New York City Marathon in 2014 with a personal best of 5 hours, and 52 seconds. His spiritual side shines through his participation in multiple Char Dham Yatras and his knowledge of Vedic hymns, which he learned from a scholar.

In recognition of his contributions, Chandra has received honorary doctorates from institutions such as Jawaharlal Nehru Technological University, Hyderabad, in 2014, SRM University in 2010, and KIIT University in 2012. His family, especially his father S. Natarajan, who returned to farming in Mohanur, remains proud of Chandra’s achievements.

J. R. D. Tata

J.R.D. Tata is the Founder of the company.

J.R.D. Tata succeeded his second cousin Nowroji Saklatwala as Chairman of Tata Sons, ushering in a new era for the Tata Group. Over the decades, he expanded the group’s reach into sectors like steel, engineering, power, chemicals, and hospitality, all while upholding a reputation for ethical business practices. Known for his firm stance against bribery and black-market dealings, J.R.D. built a legacy of integrity that became a hallmark of the Tata brand.

Under his visionary leadership, Tata Group’s assets grew impressively from $100 million to over $5 billion. Starting with 14 companies, J.R.D. expanded the Tata Group into a conglomerate of 95 enterprises by the time he stepped down on July 26, 1988, with each company either founded or acquired under his guidance. His leadership transformed Tata Sons into a diverse and influential powerhouse, leaving an indelible mark on Indian industry.

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Tata Consultancy Services - Startup Story

Tata Consultancy Services Limited, initially named Tata Computer Systems, was founded in 1968 by Tata Sons Limited. 

The company was the brainchild of J.R.D. Tata, the visionary chairman of Tata Group, and F.C. Kohli, an electrical engineer from MIT who is often hailed as the ‘Father of the Indian Software Industry.’ The founding of TCS was driven by the increasing demand for skilled IT professionals and the need for innovative IT solutions for businesses worldwide.

With his foresight and determination, F.C. Kohli recognized the IT sector's immense potential in India. His leadership was pivotal in shaping TCS into a global IT giant, playing a crucial role in transforming India into a hub for information technology and contributing significantly to the country’s economic growth.

Early on, TCS provided punched card services to Tata Steel (then TISCO), developed a reconciliation system for the Central Bank of India, and offered bureau services to the Unit Trust of India. By 1975, TCS had created SECOM, an electronic depository and trading system for Switzerland’s SIS SegaInterSettle, as well as System X for Canada’s Depository System, and automated the Johannesburg Stock Exchange. TCS later partnered with and acquired the Swiss company TKS Teknosoft.

In 1980, TCS launched India’s first dedicated software R&D center, the Tata Research Development and Design Centre (TRDDC) in Pune, and in 1981, set up India’s first client-specific offshore development center for Tandem.

Tata Consultancy Services - Mission and Vision

Mission: Tata Consultancy Services (TCS) is dedicated to empowering global businesses in their digital transformation journeys by offering a consulting-led, cognitive-driven suite of IT, business, and engineering services. Through its unique Location Independent Agile™ delivery model, TCS aims to provide agile, high-quality solutions that drive operational excellence and innovation, helping clients achieve their strategic objectives in a fast-evolving technological landscape.

Vision: TCS envisions a world where businesses are equipped to achieve sustainable growth and resilience through advanced digital solutions. By leading with a commitment to social responsibility and sustainability, TCS strives to make a lasting impact, both in the communities it serves and on a global scale, while continuing to set new benchmarks for excellence in technology and consulting.

Tata Consultancy Services - Name, Tagline and Logo

In 2021, Tata Consultancy Services (TCS) embraced a millennial-focused rebranding, shifting its tagline from "Experience Certainty" to the more aspirational "Building on Belief." This new tagline reflects TCS’s commitment to partnering with clients in their growth journeys, emphasizing the shared confidence and belief in innovative solutions that drive transformation and success.

In May 2018, to celebrate its 50th anniversary, TCS introduced a vibrant, colorful wordmark, which initially served as a commemorative emblem until April 2019. Then, in October 2020, this colorful design was formally adopted as the company’s official logo, now frequently displayed alongside the classic Tata Consultancy Services wordmark. This logo update reflects TCS’s dynamic approach and reinforces its brand identity as an innovative, forward-thinking organization.

Tata Consultancy Services - Business Model

Tata Consultancy Services (TCS) is a global IT services and consulting firm renowned for its consultative approach to crafting tailored business solutions. By expanding a consulting-led portfolio, TCS aligns its services with clients' strategic goals to deliver holistic solutions that drive growth. 

TCS’s Global Network Delivery Model is a recognized benchmark in software development. Its Location Independent Agile approach enables seamless, high-quality delivery across geographies.

TCS also champions ecosystem-enabled business models, blending its technological expertise with partner networks to deliver impactful solutions. 

Emphasizing the Three Ps—patents, products, and platforms—TCS aims to reshape its business model, fostering innovation and creating a competitive edge in the digital era.

Tata Consultancy Services - Revenue Model

TCS generates the majority of its revenue—around 90%—from providing IT solutions and services, primarily through its consulting and technology offerings.

1. Key Clientele Overview: TCS boasts a strong client base, including 24 clients in the $100 million revenue bracket. The largest share of clients falls within the $1 million category, with key sectors spanning banking and finance, retail, and telecommunications.
2. Geographical Market Distribution: The company’s primary market lies in the United States, which constitutes the largest portion of its clientele. The UK and Europe follow closely as significant markets, while India, despite being the company’s base, accounts for a smaller percentage of its service demand.
3. Earnings Allocation: A large portion of TCS's earnings is allocated to employee salaries, as its workforce is considered its most valuable asset. Significant funds are also dedicated to sales and marketing efforts, aimed at expanding its client base and promoting its services globally.
4. Global Growth Strategy: TCS’s global business model allows it to maintain a strong response to external economic factors, particularly those in Western markets. The company’s strategy supports an impressive annual growth rate of 40%.
5. Strategic Partnerships and Alliances: TCS actively seeks strategic partnerships with global technology leaders such as Hewlett-Packard (HP), Intel, and IBM. These alliances foster a collaborative approach to joint research, development, and mutual business growth.

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Tata Consultancy Services - Challenges Faced

Tata Consultancy Services (TCS), India’s largest IT services company, is currently navigating a series of challenges all while striving to maintain its competitive edge in an increasingly digital world.

1. Skills Gap Hindering Recruitment: India’s largest IT services company, Tata Consultancy Services (TCS), is currently facing a significant challenge in filling a large number of vacant positions due to a widening skills gap. During a recent town hall, Amar Shetye, the global operations head of TCS' Resource Management Group (RMG), highlighted the struggle to fill thousands of open roles despite the company's ongoing efforts.

2. Slow Digital Transformation in Banking and Insurance: In contrast, industries like banking and insurance have been slow to embrace digital transformation compared to customer-facing sectors. Jamie Patel from American Century Investments noted the growing expectation for seamless digital interactions, with customers now accustomed to swift online shopping and instant gratification. However, in sectors such as banking, customers still experience delays, with many online transactions requiring in-branch visits or extended processing times. Experts agree that the sector must accelerate its technological advancements to remain competitive.

3. Slowing Growth Amid Global Challenges: Meanwhile, TCS, grappling with a slowdown in growth as clients reduce spending amid high interest rates and geopolitical tensions, has responded with a strategic move to repurchase shares. The TCS board recently approved a share buyback worth INR 17,000 crore, buying back shares at a 15% premium to the closing price, marking the fifth such repurchase in the past six years.

Tata Consultancy Services - Investments

TCS has strategically invested in talent, technology, and acquisitions, bolstering its position as a global leader in IT services and innovation.

Tata Consultancy Services - Mergers and Acquisitions

Tata Consultancy Services (TCS) has made 18 notable acquisitions, as follows:

Tata Consultancy Services - Growth

Tata Consultancy Services (TCS) has demonstrated consistent growth in recent years, although it faced some challenges in FY24. Here's a summary of its financial performance and growth trajectory:

1. Revenue Growth:
   • TCS's revenue for FY24 grew by 4.1%, reaching $29.08 billion.
   • This growth was considered one of the best among large-cap IT firms, though it marked one of the lowest annual growth rates for TCS in recent history.
   • For the 2023 fiscal year, TCS's revenue reached INR 2.388 trillion, up from INR 2.168 trillion in 2022.
   • Quarterly revenue for Q4 FY24 was reported at $7.36 billion, showing a sequential increase of 1.1%.
2. Profit Growth:
   • Net profit for FY24 stood at $5.62 billion, marking a 7.7% increase from FY23's $5.22 billion.
   • TCS also reported a 6.4% increase in net profit for Q4 FY24, reaching $1.5 billion.
3. Regional Performance:
   • North America, the largest revenue contributor (around 50% of TCS’s revenue), saw a 2.3% decline in revenue year-on-year for Q4.
   • UK revenue increased by 10.1% year-on-year and India saw a 20.2% growth in revenue, which helped offset declines in other regions.
4. Sector Performance:
   • BFSI (Banking, Financial Services, and Insurance), which accounts for 32% of TCS's revenue, saw a 1% decline in revenue.
   • On the other hand, Manufacturing Life Sciences & Healthcare were standout performers, growing by 7.3% and 4.8%, respectively.
5. Digital and Key Contracts:
   • Growth in FY24 was driven in part by a $1.83 billion digital transformation contract with Bharat Sanchar Nigam Ltd (BSNL).
6. Brand Value and Global Standing:
   • TCS’s brand value has grown significantly over the past decade, with an impressive 476% growth from 2010 to 2020, according to Brand Finance.
   • Its year-on-year brand value increased from $12.8 billion to $13.5 billion, making it the fastest-growing among the top three IT services brands for the second consecutive year.

Despite slower revenue growth in some segments, TCS's strong brand and digital transformation leadership position continues to drive growth. The company remains resilient with strong revenue performance in regions like the UK and India and a growing digital portfolio.

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Tata Consultancy Services - Advertisements and Social Media Campaigns

Tata Consultancy Services received three Gold Awards for the ThisRun and Virgin Money London Marathon Event App and two Bronze Awards for Excellence across Marketing and Customer Engagement. ThisRun received the gold award in both the People’s Choice Marketing Campaign and Technology Marketing Campaign categories, as well as a Bronze in the Grand Prix marketing campaign category. This run is part of TCS’s drive to deliver innovative solutions that promote better health and inclusion. Launched in 2020, it is a worldwide campaign that brings runners together for better health and empowers them with technological innovation. Through inspirational stories, tools, and tips, #ThisRun imaginatively captures the power of sport to unite people, help them grow, and push boundaries to challenge the status quo.

TCS developed the Virgin Money London Marathon Event App to allow participants and spectators to get the fullest London Marathon experience. In 2020, TCS updated the app to support participants in the first virtual London Marathon during the pandemic, which included a digital certificate and medal and the chance for runners to share an official finish line selfie. This year’s hybrid London Marathon event in October will see TCS further enhance and personalize the app experience. Over the last year, new technology innovations introduced by TCS have helped to reimagine many of the world’s top marathons as virtual events and enabled runners across the world to participate.

TCS’s Building on Belief messaging highlights the many ways that technology can deliver meaningful change for everyone. TCS, as a business, together with its clients, aims to deliver innovative futures that are more inclusive, and sustainable and inspire the next generation.

The job at Fifty-Five and Five was to deliver this uplifting and inspiring message to the target audience - in this case, the people participating in the marathon events, those supporting friends and family, and the wider public.

These are massive, cultural events that reach audiences not only in each host nation but across the world.

Delivering on-brand copy to enhance and complement this campaign, often in real-time, was an exciting challenge that expanded their relationship with one of their most inspiring and truly global clients. What’s more, the results of their campaign speak for themselves.

Tata Consultancy Services - Awards and Achievements

In addition to the following achievements, TCS was also featured in the Bloomberg Gender Equality Index for both 2022 and 2023, made it to Diversity Inc.'s Top 50 list, and won Brandon Hall Awards in areas such as diversity and learning & development.1.

1. Google Cloud Partner of the Year Awards (2023)

• Global Talent Development Partner of the Year
• Industry Solution Services Partner of the Year

2. Asia-Pacific Stevie Awards (2023)

• Innovative Achievement in Finance
• Most Exemplary Employer
• Award for Innovative Use of Technology in Human Resources

3. CIO 100 Award (2023)

• Workplace Resilience Solution for its IUX for Workplace Resilience software

4. IoT Breakthrough Award (2023)

• For its IUX software

5. Brandon Hall Group Awards (2023)

• 15 awards recognizing TCS’s work in Human Capital Management (HCM).

6. Workplace Diversity Awards

• TCS received multiple awards for its commitment to workplace diversity, including the 2023 Bloomberg Gender-Equality Index (GEI).

7. AWS GSI Partner of the Year - Global (2023)

• Recognized by AWS for excellence in partnership

8. CII Regional Award

• For its outstanding practices in safety, health, and environment

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Tata Consultancy Services - Competitors

Tata Consultancy Services (TCS) is India's largest software services company and a global leader in providing IT services, consulting, and business solutions. As of 2024, it is ranked seventh on the Fortune India 500 list, underscoring its significant influence and leadership in the technology sector both in India and globally. Its competitors are as follows:

• Accenture
• HCL Technologies Ltd
• Wipro Ltd
• Infosys
• LTIMindtree Ltd
• SAP
• Tech Mahindra Ltd

Tata Consultancy Services - Future Plans

Tata Consultancy Services (TCS) is set to revamp its organizational structure to better align with customer needs and achieve its ambitious revenue goal of $50 billion (approximately INR 3.89 lakh crore) by 2030. This follows a period of growth where TCS's revenue increased from $17.3 billion in 2016 to $25 billion in 2021.

As part of its long-term strategy, TCS plans to introduce a new integrated organizational structure, focusing on "curated customer journeys." This involves creating two new business groups that complement existing industry verticals and markets. The goal is to streamline operations around the entire customer journey—starting from acquisition and incubation to growth and transformation.

In response to challenges in North America, where TCS has seen slower profit growth and declining revenue, the company is also aiming to diversify its market focus. TCS is eyeing new growth opportunities in regions like Japan, Latin America, and Southern Europe, with Japan, in particular, offering significant potential as it currently contributes very little to India's IT sector revenue.

FAQs

What does TCS do?

TCS (Tata Consultancy Services) provides IT services, software, and business solutions to help companies run better and grow.

When was TCS founded?

TCS was founded in 1968 by J.R.D. Tata.

Who are the main competitors of Tata Consultancy Services?

The main competitors of TCS include Wipro, Infosys, Tech Mahindra, Accenture, HCL Technologies, and many more.

What was the revenue of TCS for 2024?

TCS's revenue for FY24 grew by 4.1%, reaching $29.08 billion.