Annuals

'There's big opportunity in niches'

DQI Bureau

25 Jul 2006 00:00 IST

New Update

This is his last month as chairman and chief mentor of Infosys. As he

turns 60 on August 20, and as the company begins its 25th year celebrations, the

iconic NR Narayana Murthy retires (to carry on, as non-executive

chairman.) In a freewheeling discussion with Dataquest's Prasanto K Roy and

Goutam Das, Murthy talks about India's tech industry today and tomorrow,

about Infosys, and value, and more. Excerpts:

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A dozen companies dominate India's software story. What's ahead for

the next tier? The smaller, niche players. Can they aspire to be the next

Infosys?

There is big opportunity in niche areas. It's very difficult to

use the methods that we once used, try and fight Infosys. We are financially

strong. We have created such technology, training and marketing infrastructure

that it's not easy for smaller companies to fight us. On the other hand, if

the youngsters opt for services, they will focus on solutions leveraging a

particular technology, or solutions in very small areas of banking and finance.

That has a better prospect. That is the best way for services. They can beat

Infosys, Wipro, TCS: because they would go deep into a niche. And they will then

have much better chance than otherwise.

Does this cover products as well? The niche route?

On the product side, the niche areas again have good potential. I don't

see India soon coming out with something like Windows. Europe has not, Japan has

not. That's not easy. Or a solution like SAP, which requires intricate

understanding of the business processes of leading-edge corporations in the

first world. I don't know if we can do it quickly. But if someone wants to

work in the area of risk mitigation, which is about reading a lot of advanced

mathematics in finance, he can sit in India or anywhere else and do that. It is

more of a mental exercise than dealing with advanced technology, people, and

different cultures. That is where I believe our youngsters have a great

opportunity if they use the power of their mind, and technology.

Yet most Indian product companies don't reach their first birthday. Is

it just about the missing VC or angel funding?

Yes, we have to enhance the availability of venture capital. But more than

the money, we do not have a platform in India where there is mentoring of these

people. There are very few people in India who have given up their positions in

companies, having made enough money, retire, and do venture funding, sitting on

advisory boards of younger companies. If we can get to the next generation,

where we will have 20 to 30 such people and they get into the boards of

companies and start advising them, I think VC funding will happen. Money will

come, but the ability to advise people, connect entrepreneurs with prospective

key customers, key employees, connect with lawyers-all of that is very

important.

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India's services growth is still linked to headcount. What high-value

propositions would you look at to break this linear rule?

There are many areas. I am running a project at Infosys called 'Thousand

Boardroom Consultants', for two years. We believe that India has a long way to

go before our youngsters can interact confidently with the CXOs of Fortune 500

organizations. I want them to go to the boardroom, explain to them how they can

transform the organization by their domain knowledge, by the kind of solutions

they have in their portfolio. To do that, we have to create people who move from

being reactive problem solvers to proactive problem definers. This is not an

easy task. It requires training, education, and a change of mindset. We are

conducting pilots. Once we get inputs, and we fine-tune it, we will spread it

out in a bigger way. Second, we are conducting another experiment, on leveraging

the strength of large accounts. Indian companies, so far, have been doing small

things in large organizations. How do we bring together all these experiences

and then communicate to the management of these organizations that we can indeed

do big ticket items? That's the other project that we are running.

The Legend of Murthy

The success story of

this Bangalore-based software giant is part of tech and stockmarket

folklore. It needs no retelling. But who can ignore the 25th anniversary

of one of India's finest trophy companies? There was a time when the

name Tata stood as the sole representative of India's industrial face.

In more ways than one, Infosys can be credited with having created such

recognition globally for India, IT, and Bangalore.

So, what did a bunch of

ordinary guys led by the diminutive, mild-mannered Narayana Murthy do that

was so different and radical? Yes, they must have taken personal risks

that others would not have dared to take. And they had faith. It takes a

deep sense of conviction and faith to persevere on a 25-year journey of

excellence in a fiercely competitive area while sticking to a foundation

of ethics.

But one thing is

certain. Infosys is Murthy and Murthy is Infosys. He has dared to think

big and audacious and he has succeeded where few have. Maybe it was a

business strategy to give employees stock options as a means of retaining

talent and curbing attrition, and he couched it under creating wealth in

the middle class. But it was a gamble that paid in real terms. Infosys is

perhaps the only company that has created several hundreds of

'middle-class millionaires'. In a country where wealth is still

largely associated with land, family businesses, or politics.

With that he proved

that while he did business with American companies, he also learnt from

them rapidly the art and the science of marketing.Â

No other Indian company has successfully marketed itself and

created a brand bigger than the sum of parts.

Everything from the

campus to the basketball courts to the food courts, was packaged and sold.

Media, Indian and international, lapped them up, while Infosys set about

creating its real product: the global delivery model.

Today Murthy is a

thought leader and is looked upon by many-heads of countries as well as

corporate honchos-as a strategist. How many Indians have achieved this?Â

The first 25 years of

Infosys has been characterized by Murthy and his fierce belief in making

the impossible possible. What will the next 25 be like? It's a question

that will be debated as Murthy steps down.

But as a campaign for

the FIFA World Cup puts it: Impossible is nothing. Maybe Nandan Nilekani

and his team will make that their anthem.

-Latha Kuttappan

Chandradeep

You are a 'compassionate capitalist' who believes in job and wealth

creation for society. How do you see the great divide in India, such as when

Bangalore burnt in April over the death of an old filmstar, gunning for IT and

other icons of capitalism? Should IT communicate better what it does for

society?

Frankly, this industry is the most enlightened of all. First, it seized an

opportunity in the export market and brought about a fundamental mindset change.

There was an opportunity in manufacturing too and China took it: India did not.

The IT industry, certainly Infosys, created the first experiment in

democratizing wealth. It has been the most progressive part of the Indian

economy. Third, this industry invests very heavily in training, in R&D.

Fourth, the senior management and founders of IT companies have contributed much

more than any sector at this stage of development from their personal accounts,

barring a Tata, a Birla, a Bajaj and a few others. Our political leadership has

not understood that there is no other method of solving the poverty problem than

creating new jobs. They have to encourage such ventures; they have to create

better infrastructure, education, roads, airports. If they do not do this and

then blame people, that's not fair.

The Indian tech story is built on a financial services foundation...is

there a next big domain we can look to?

The most competitive areas in the world are manufacturing and retail, after

BFSI.Â Because of the demographic

profile of Europe and Japan, healthcare too is a promising field. You will need

more and more healthcare for these people, which means there will be greater

volumes and competition and costs have to go down.

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