Businessmodel of HCL Technologies

Customer Segments

HCL has a mass market business model, with no significant differentiation between customers. The company targets its offering at any firm that needs IT services.

Value Proposition

HCL offers two primary value propositions: innovation and brand/status.

The company has a long history of innovation, with many industry firsts. It developed the first indigenous microcomputer in India in 1978, around the same time as Apple and three years before IBM released its PC. It also built a fine-grained UNIX multi-processor in 1988, three years before Sun Microsystems and Hewlett-Packard.

The company has established a strong brand as a result of its success. It is one of the 20 largest public firms in India, with a market capitalization of $22.1 billion. It generated revenues of $6.2 billion in its most recent fiscal year. It is a member of the Fortune Global 2000, and operates in 32 countries. Lastly, it has won many honors, including the Indo German Chamber of Commerce Award (2015), the Aecus Innovation Award (2015), recognition as one of the “World’s Most Influential Companies“ by Bloomberg Businessweek, recognition as a “Top 10 Indian Brand“ by Brand Finance (2015), recognition as “Outstanding Company of the Year“ by the India Business Leader Awards (2014).

Channels

HCL’s main channel is its direct sales team, which operates worldwide. The company promotes its offering through its website, social media pages, webinars, road shows, summits, and conferences.

Customer Relationships

HCL’s customer relationship is primarily of a self-service nature. Customers utilize its services while having limited interaction with employees. The company’s website features a “Resources” section that includes brochures, case studies, podcasts, research papers, a video gallery, white papers, and analyst reports. It also has a “Technology Q&A” section with definitions for various relevant technology terms. That said, there is a personal assistance component in the form of phone and       e-mail support.

Key Activities

HCL’s business model entails designing and developing its IT services for customers. The company outsources certain customer-related activities to third party contractors and consultants, including hosting services, maintenance, break fix services, disaster recovery, and facilities management.

Key Partners

HCL maintains partnerships with around 100 companies; they fall into the following categories:

Global Strategic Alliances – The company forms 360-degree relationships with other firms across multiple industry verticals and geographies. Specific partners include Microsoft, Cisco, CSC, EMC, SAP, and Hewlett-Packard.

Strategic Alliances – The company works with other firms to develop joint solutions. Specific partners include Oracle, IBM, Tibco, and Infor.

Specialist Partnerships – The company collaborates with other firms that help it provide niche offerings to its customers. Specific partners include Informatica, Teradata, VMware, and SAS.

Key Resources

HCL’s main resources are its technology employees who design and develop its IT services. The company also relies on sales/marketing staff to promote the services and customer service staff to provide support.

Cost Structure

HCL has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

HCL has three revenue streams:

Software Services – Revenue generated from time/material and fixed-price contracts

IT Infrastructure Services – Revenue generated from the sale of products, as well as installation, bandwidth, maintenance, and infrastructure management services

Business Process Outsourcing Services – Revenue generated from unit-price and time-based contracts