The Path-breaking Company

Circa 1981. Seven software professionals

pool in their money to start a software company, which almost two

decades later has changed the infotech scape in India. The vision

of the company, when it was incorporated on July 2, 1981, in Mumbai,

was to become a globally respected corporation that provides best-of-breed

software solutions delivered by the best-in-class people. Today,

it has transcended all barriers to become the number one IT company

in terms of market capitalization. It has been a trendsetter and

a path-breaker, by being the first Indian company to be listed on

a US stock exchange. In recognition of this achievement and effort

DATAQUEST confers on Infosys Technologies the special Path-Breaker

award 1998-99.

Nagavara Ramarao Narayana Murthy and

associates have shown the world that India and its software talent

are second to none. From a leftist-turned-capitalist to a visionary,

philosopher and entrepreneur par excellence, Murthy along with his

troupe have brought in respect and value that has made other Indian

companies pitch themselves onto the global bandwagon. Infosys has

grown from strength to strength, right from the time it came out

with an initial public offer (IPO) in 1993 by raising Rs13 crore.

Then came a private placement of Rs25 crore in 1994 and the Nasdaq

listing on March 11, 1999, to raise $70.38 million (Rs296.86 crore).

It has blazed a trail that many Indian companies are only now following.

The

trail left behind by Infosys has become a role model for the other

companies to follow. Its stock option plans are evidence of the

paramount importance that the company attaches to its employees–passing

on the wealth created by it. As Murthy had told DATAQUEST when he

won the IT Man of the Year award in 1996, “Unless you create wealth

by legal means, you cannot distribute it. And without the two, you

do not have progress.” A clear reflection of the integration of

the principles of socialism and capitalism that Murthy has been

able to incorporate in his corporate life. And to supplement that,

Infosys today has one of the best employee stocks option plans (ESOPs)

in India, one of the lowest turnover rates and the best talent working

for it. As Murthy had said, “You have to be a caring employer. Sharing

of gains and successes makes a family of workers. Wealth is not

given. And if ethics underlie the creation thereof, it is good to

send it around.” A principle that he and his company have followed

throughout the entire success-span.

In 1981, it was a tough decision to

make. To choose a software company when the Indian strength was

seen in the body shopping area. And the team that came together

to form Infosys had the right mix of technocrats and entrepreneurs

among them. Nandan M Nilekani is a good communicator; NS Raghavan

is a great humanist; S Gopalakrishnan is a great technical person;

SD Shibulal, K Dinesh and Ashok Arora–the only one who left Infosys

to float his own company in the US–are good technical project managers;

not to speak of Murthy himself, who is considered the best marketing

person in his line. The Infosys ball was set rolling, propelled

by the vision of Murthy, and the enthusiasm and urge to do something

different from the rest. The evolution of Infosys has been one of

the inherent strengths of quality, value system, good corporate

governance and respect for human beings at large and society in

general.

Headquartered in Bangalore since 1983,

Infosys today is a ‘role model’ IT services company in India. It

utilizes an extensive non US-based infrastructure with its state-of-the-art

offshore software development facilities to provide high-quality,

cost-effective services to clients in a resource-constrained environment.

Through its worldwide sales headquarters in Fremont, California,

and 16 other sales offices located in the US, Canada, UK, Japan

and India, the company markets its services to large IT-intensive

businesses. The company’s compounded annual growth rate (CAGR) for

1990 to 1999 has been 76.1%, according to a DQ Top 20 survey, and

its turnover has almost doubled in fiscal 1999 to touch Rs512.74

crore. Even its operating margin of 37.4% is higher than that of

the previous year. The US continues to be a hot-bed for garnering

revenue, with nearly 80% of the revenue coming from that region.

But it is the repeat business from its existing clients, to the

tune of 90%, that shows the faith reposed in Infosys by its clients.

Infosys’ vision has been simple yet tough. To pursue a world-class

operating model, to invest heavily in human resources, to focus

on managed software solutions, to capitalize on a well-established

offshore development model and to maintain a disciplined focus on

business and client mix, and pursue growth opportunities.

More about Infosys