Daybreak - IBM, Infosys, and Wipro entered Kochi. Only one emerged unscathed

Episode Date: April 26, 2026

At Kochi's Infopark, two models of the IT industry sit 500 metres apart. Infosys and Wipro: sprawling campuses, thousands of engineers, margins built on scale. IBM: a smaller hub, senior-heavy teams, focused on enterprise AI. Same city, completely different bets on the future.India's IT giants are expanding into tier-2 cities because they're cheaper. But AI is quietly making the old logic — hire more, deliver at scale — look like the wrong answer. Infosys and Wipro's stocks have nearly halved since 2021. IBM's has doubled.So what does Kochi reveal about where Indian IT is actually headed?Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

At Cochee's Info Park, it takes less than 10 minutes to walk from one model of the IT industry to another. The first is the sprawling campuses of Infoise and WIPRO. Here, large teams of engineers deliver enterprise software for global clients. Think things like migrating systems to the cloud, debugging applications and keeping legacy platforms alive. The second, just 500 meters away, is IBM's Coochee Hub inside the World Trade Center tower. It's a smaller engineering hub where teams work on enterprise AI and hybrid cloud systems for global clients. Both do enterprise technology work. But they're built on very different ideas of how that work should be organized.

InfoSys and Mapro, which have been in Kerala's coastal city for nearly two decades, still operate on an age-old logic. Large contracts need large teams. An engineer from Infesus told my colleague, Ron Michael Carney, that the margins come from hiring engineers in India and delivering work at scale for clients in the US or Europe. So, it's no wonder that Infusis alone employs up to 7,000 engineers just in that city. Then there's the way IBM does it. Since setting up in Kochi in 2022, it's focused on innovation centers for Gen AI, automation and ecosystem development.

The idea is built around the need to hire fewer people while generating higher revenue per employer. employee. Now, this contrast isn't unique to Kuchy. Across India, IT services giants are expanding into tier two cities precisely because they're cheaper. For example, Cognisant has invested nearly $200 million in building a new 8,000-person campus in Vishaka-Patnam. Even TCS has announced a $1,300 cro-rupes campus in the same city as well. Meanwhile, Inphesus is investing $300,000 hundred-crow rupees in a new campus in Punjab's Mohali, whereas Wipro is expanding delivery centres in places like Koymbatur and Bhubaneshwar. But even as AI is rewriting the rules, to squeeze more output from fewer engineers,

the purpose of these TEO2 hubs may be about to shift, and IBM's Gucci operation may be the thing that is pointing the way. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Rachel Virgis, and every day of the week, my co-host, Nita Sharma and I will bring you one news story. that is worth understanding and worth your time. Today is Monday the 27th of April. IBM has been pivoting for some time now, away from infrastructure upgrades,

towards software and AI products. An IBM executive told Runezai that IBM's priorities today focus on enterprise AI, especially through its WatsonX platform. Now, WatsonX is IBM's flagship enterprise AI and data platform. Think of it as this scaffolding that banks, healthcare providers, and governments need to actually use AI safely and at scale.

The executive explained that the value in IBM is actually helping larger organizations really use AI inside their systems. That shift is exactly what the Kuchy Center reflects. For instance, take this project that came to IBM. Its engineers were asked to figure out why a telecom operator was suddenly getting flooded with customer complaints. For instance, take this project that came to IBM. Its engineers were asked to figure out why a telecom operator was suddenly getting flooded with customer complaints.

Its engineers were asked to figure out why a telecom operator was suddenly getting flooded with customer complaints. The data was scattered everywhere. Network logs, support tickets, outage records. So, the engineers built connectors to pull it all together, fed it into an AI model, and returned the answers directly to the company's internal tools. It was a new problem, so the solution reflected that same novelty. Infocis, on the other hand, has a different approach entirely.

The project involved migrating a tech. telecom operators' billing platform to the cloud. An emphasis engineer based in Gucci said that the team rewrote parts of that old code to make it work on the cloud, tested the new system, fix bugs during the migration, and overall made sure that the billing system still connected to the rest of the company's software. This was classic maintenance work. Done well, of course, but fundamentally more about keeping an existing system alive than creating something new. And that really is the takeaway.

Companies like InfoSys and WIPRO continue to be delivery centers at heart. A former WIPRO executive familiar with the company's Cucci operations, put it simply. Earlier, it was almost entirely about application services and support. Over time, that shifted toward digital engineering and cloud migration, largely because client demand had changed in that direction. So, projects accordingly now flow through sprawling tiered teams where junior engineers handle costing, testing and maintenance, while senior developers manage the coordinated delivery.

The thing is, the economics of the entire system hinge on volumes. The former WIPRA executive told us that the backbone of the Indian IT services model is still large campuses. They are the ones who make it possible to train thousands of engineers and manage complex client programs efficiently. But investors are increasingly betting against this model. The share prices of India's largest IT firms have nearly halved since their peak in 2021. AI tools like coding assistants, enterprise agents and automated debugging are replacing the work once done by armies of junior engineers.

For instance, in February, a single announcement from Anthropic was pretty much an attack on one of the oldest pillars of enterprise technology. The company said that its coding system could now automatically modernize a legacy software called Kobol. It's a decades-old programming language that still runs huge parts of the world's banking insurance and government infrastructure. A lot of this exact infrastructure sat on IBM's mainframes and upgrading it had guaranteed the company a consistent stream of consulting work. But not anymore. You see, within hours of the announcement, there was a perception that the work would be gone and the company's stock price had fallen by 13% in a single day. That was the

sharp a single-day drop over the last two decades. But even within this industry-wide slump, the market has drawn a distinction. Between companies selling large engineering teams that are more exposed to AI automation like Infusus and Vipro and those selling the tools and systems behind enterprise AI, which may actually benefit from this automation like, well, IBM. In fact, while InfoSys and WIPRO's share prices have been falling, IBM stock has nearly doubled, even despite the recent cobalt linked correction. Turns out, Kuchy may actually be a better fit for the IBM Way.

Stay tuned. Cochie's Info Park launched in 2004. Today, its 300-acre campus employs around 72,000 people across nearly 600 companies. And over the years, the ecosystem has only expanded. It's grown from a select few players like InfoS, with Pro TCS and Congenies. who were using Kuchi as a delivery base for global software projects to global technology and consulting companies such as IBM, EY, KPMG, and even startups across the SaaS, FinTech and mobility sectors. The result is that the Info Park has now grown to become one of the country's

largest tier two technology hubs. An Info Park official even told Brunmi that in the last five years alone, it had added around 25,000 to 30,000 jobs as companies expanded distributed to delivery models after the pandemic. But the hiding logic that drove that growth may be running into something of a wall and for a specific reason rooted in Coochee's labour market. The IBM executive I mentioned earlier told us that Kerala produces a lot of engineers. But historically, many of them move to Bangalore, Hyderabad or overseas to places like the Gulf. When many of them return, they often bring several years of experience with them.

which means the local talent pools skews towards mid-career engineers instead of fresh graduates. These combined labor market dynamics create a slightly unusual environment for tech companies. So while Kuchi can supply a steady stream of experienced engineers, it's not the kind of massive annual hiring pipelines that very large tiered teams usually depend on, because it's important to have junior engineers populating the bottom of that pyramid. But that doesn't mean that companies are exactly on a hiring spree either. And this has actually become an opportunity for Kuchi. It can now go from a tier two hub whose reason for existence was a low-cost, high-volume

delivery model to a capability center that is plugging directly into more ambitious global engineering work. Goroa Parab, a principal analyst at Nelson Hall, a research and advisory firm, told Rundmay that the mix of work in a tier-2 center is often shaped. by the leadership team building it. He explained that senior leaders from those regions are sometimes deputed to set up these centres and that shapes early specialization. The government is also setting up an agenda.

For instance, phase three of the Info Park campus is being developed as Kerala's first AI native city, spread across 300 to 500 acres and targeting 200,000 jobs by 2030. And that means companies organized around smaller, senior heavy teams are better position to plug into global AI and software projects. But the transition is not going to be quick or easy. The IBM executive told us that after the first couple hundred senior hires,

growth often slows because the local system hasn't fully caught up yet. So, as companies raise to expand into tier two cities across the country, Kochi's example reveals something fundamental, that how these offices function matters more than simply opening them. Now, the two models of the IT industry may sit 10 minutes apart in the city's infarpark. But for companies to go from one way of functioning to the other will take considerably longer. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings.

A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Vargis and edited by Rajiv Sien.