Basab Pradhan, Infosys’ global sales and marketing head, believes the company’s strategic road map is on track. He also feels that, like in the past, the firm will prove detractors wrong, and create a business proposition that will be followed. In an interview with Shivani Shinde & Malini Bhupta, he shares the road map. Edited excerpts:
Why has Infosys’ performance been behind its peers?
Where you stand is where you are. Our outlook is based on our client’s outlook. They are going through certain market perturbations that is making them under-confident about the future. Given the macro environment, the US economy is not doing well, and Europe’s turmoil continues. If Europe sneezes, everyone catches a cold. Unfortunately, this is also when the emerging markets are not doing well. This is the way the world economy is, and our business is similar to our clients’.
Many of your top clients also work with competitors, but they seem to be able to continue their business with them. Comments?
We have some common clients with other firms, but the work that we do is different. We are also into the outsourcing business but we get most of our business from discretionary IT projects. We want to move a large part of our business into non-discretionary. We have lined up whatever discretionary resources we have under our command to propel the growth of consulting and systems integration (CSI) and products, platform and solutions (PPS) business. But as we started doing it, we had an economic recession. You have to see all of this in context.
You say your business model is different. What is it that Infosys is doing so differently that brings it this pain?
There are people who think we should continue to do what we have been doing for long, but that’s not feasible. In the 1990s, when I joined this company, everybody was going after the staff augmentation business. It was easy money. We said we were going to take the high road and build a model that was long-lasting, and we built the offshoring model. Of course, others also did that. Remember there were many other companies, bigger than us and growing faster, but we took a different path.
Second, we said we would build the packaged implementation business. Everyone told us it wasn’t possible. Today, it is a $2-billion-revenue business. So, we opened up a very early lead over other companies. Now, we are taking another step in that direction. We are saying we need to create an IP-based, non-linear model, otherwise we will never be able to get away from commoditisation of our services. If we choose to stay there and not move away, we are jeopardising our future. Many people have questioned our strategy. That’s ok, we can live with it; but we cannot jeopardise our business.
But flipping the revenue the other way is not going to happen soon, and your other business is suffering, too. How do you see your non-linear business forming a majority of your revenue?
We will look at both organic and inorganic routes. We have a healthy cash pile that we intend to use for acquisitions. But a lot depends on the timing, and the sector in which we might get the target. Almost 33 per cent of our business comes from CSI. We do plan to grow in CSI and PPS and those will grow faster than the company average.