Kalra told ET that with the maturing of artificial intelligence (AI) firms like Persistent Systems are building more Intellectual Properties such as the SASVA platform, GenAI Hub and iAURA, and creating greater value for customers. More discussions on the outcome-based pricing model have led to an increase in deals on this model, he said.
“For example, on the SASVA platform in the enterprise software space, we are now picking up deals which are outcome-based more and more,” he said. “Whether it is doing end-to-end sustaining engineering of a product, which is basically nothing but support of a product, we are picking it up and saying it is not a price into quantity. It is basically what is the outcome and service level. Here is where we are taking it on a fixed bid or an outcome kind of thing.”
Though Persistent Systems had been doing outcome-based deals, GenAI has enabled such deals at a much higher scale, according to Kalra. “So, from our perspective, we are seeing more and more interest in outcome-based deals because it’s something where the customer gets more value, and we are able to capture a bit more from a value perspective using our own IP that we are building. That’s how we are differentiating ourselves in the market,” he said.
In outcome-based deals, customers tell IT firms not to price the deals by the input, as to how many people and rate per head, said Kalra. “You tell us what is the outcome that you want, and based on the outcome, we’ll sign up for the timeline, the outcome, the service levels that you want, and we’ll charge you a fee for that, and we’ll use our tools. So, essentially, we’ll deliver clients more value, but underlying it is not about how many people, but how we are doing it. And we’ll take an output-based pricing and we’ll use our own technology,” he said.
At a time when business is moving to outcome-based deals, Kalra said, younger people need to be more curious about where the technology is going, adapt to the trend and adopt newer technologies. “So, it’s about adapting and adopting the newer technology and being absolutely hands-on with the latest trends,” he said. “If they invest in these technologies, they will become even more valuable to the industry because the industry is going to move and adopt AI at a bigger scale. If they don’t adopt the latest technologies, they will be left behind. As a company, we are investing big time in our talent and training engineers through our Persistent University.”
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