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NS Ramnath
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Today in Tech: Indian IT in global rankings; Infosys 3.0 Vs Cognizant H3; Wozniak on Apple

Indian IT in a bigger canvas
The most interesting thing about a table that Gartner published yesterday is not that Indian IT sector growth slowed down (in fact, the new normal is no longer called the new normal); it’s certainly not that Cognizant has replaced Infosys as number 2 in terms of revenues (that inevitability happened early last year), but it’s in two sets of figures that place IT in the global context.

Indian IT Services : the top 5

One, the top five Indian IT companies account for just 3.7% of IT services market. And even 13% growth against the industry growth rate of 2% has increased its share by a mere 2 basis points. It grew from 3.5% to 3.7%.

Two, it’s tougher at the top (as in any running race). HCL Tech which grew at 18.1% moved up 6 places in the global ranking, and Cognizant, which grew faster at 20.1 on a much higher base, moved up 5 places.

Three, despite the negative perception, the ranking of Infosys has actually improved, and it retains its global market share. For HCL Tech, which has been impressing the market like none of its rivals could, that share hasn’t changed. For answers, you should not look at growth numbers, but at incremental revenues. In terms of incremental revenues, HCL Tech made $ 188 million more than Infosys.

 

 

How Infosys 3.0 is different from Cognizant’s H3
My story on Infosys in the recent issue of Forbes India (Did Infosys get it wrong with 3.0 strategy?) argues that the reason for the company’s difficult times these days doesn’t lie so much in its lack of hunger for acquisition or the salesmanship of its CEO, as it’s on the the nature of its new strategy. Implementing 3.0 took the attention away from scaling itself up and towards building tomorrow’s enterprise for client. The one uniform question I was asked during the discussions that followed the publication of the story is this: Aren’t others getting into products / platforms? Aren’t TCS and Cognizant, which were also restructured, doing well?

Infosys Cognizant

A good way to think about the difference is this. Congnizant H1, H2, H3 is structural. Infosys 3.0 is chronological. (So, at Infosys, contrary to what many people believe product and platform is not Infosys 3.0, it’s only one part (and presently a very small part) of Infosys 3.0. The image in the left represents the key difference.

The promise of this strategy was that it will make Infosys both revenue and margin leader – without having to compromise on pricing, without having to make risky acquisitions. But, it’s also more complex than what others did. In fact, one would argue, TCS and Cognizant simplified the structure, while Infosys tried to align it with a much more complex reality. Check out the story, and let me know what you think.

 

Steve Wozniak on Apple
Over the weekend, I read this in an Engadget interview with Steve Wozniak

Which company does the most to push the industry?
You have to be kidding. Apple leads the way. A bunch of companies could be like an ocean of products with waves and ripples. But Apple is an Everest. The day Apple introduces a new product you know it’s not the same as before and you know it’s the future for everyone. More…

And, today Reuters reports:
Apple Inc Chief Executive Tim Cook said on Tuesday he expects the iPhone and iPad maker would be responsible for “several more gamechangers” and that wearable computers could be the next big thing. More…

 

 

Also of interest

  • Many users are realizing that everyday computing, such as accessing the Web, connecting to social media, sending emails, as well as using a variety of apps, doesn’t require a lot of computing power or local storage. Instead, they are putting a premium on access from a variety of smaller devices with longer battery life, an instant-on function, and intuitive touch-centric interfaces. These users have not necessarily given up on PCs as a platform for computing when a more robust environment is needed, but this takes a smaller share of computing time, and users are making do with older systems. ~ IDC
  • A leading Nordic beverage company, Olvi, just reported an 85% increase in soft drink sales and its impressive growth is attributed almost entirely to the new range of Angry Birds sodas. ~ BGR
  • An engineer’s revolutionary new chip, inspired by how our own brains work, could turn computing on its head. ~ Discover

 

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I'm surprised that the top 5 giants are just accounts for 3.7% of IT services market. But it's no surprise that TCS is no 1. Even if you see figures of 2013 there are very large deals being awarded to TCS. So no doubt it will be the first this year as well!
Dr.A.Jagadeesh
I am glad that TCS is on the top in Indian IT in global rankings. Congratulations. Indeed TATAs have a unique business culture always standing for quality. Dr.A.Jagadeesh Nellore(AP),India
In the Infosys 3.0 story, you mention that "Implementing 3.0 took the attention away from scaling itself up and towards building tomorrow’s enterprise for client." How is this dichotomous? How is helping clients prepare for their tomorrow bad for business? Besides, company spokespersons have indicated that Infosys 3.0 is NOT a jettisoning of 1.0 and 2.0; all three exist co-terminus, with the preponderance of each depending on the maturity of a client engagement or acceptance.
Your very assumption that "Infosys 3.0 is chronological" is flawed as it assumes an abandoning of 1.0 and 2.0 with the progress of time. As mentioned above, company spokespersons have explained that Infosys 3.0 is co-terminus with 1.0 and 2.0. Moreover, even a cursory look at the company's results shows that business from Infosys 3.0 is still in the building phase, with the bulk of the business still coming from 2.0 and 1.0. This flies in the face of your above assumption.
Your manner of comparison of Infosys, TCS and Cognizant leads me to sense a certain predicated prejudice. You speak of one's strategy as complex and the others' as simplified, without really offering an objective explanation. Also, your assumption that Infosys does not want to make an acquisition is not borne out by reality; the pace and regularity with which a company can make an acquisition is dictated business sense, not popular demand.
(Full disclosure - I am an employee of Infosys and the above comments are my personal opinion)
Hi Abhijith, thanks for the comment. Three points. One, Kris Gopalakrishnan and Shibulal have given a couple of very good presentations on Infosys 1.0, 2.0 and 3.0 to analysts. Please do have a look at them. They clearly say it's chronological. Two, I guess you are also under the assumption that Infosys 3.0 is just about products and platforms. Infosys has repeatedly said it's just one part of Infosys 3.0 strategy. And three, it's exactly this kind of confusion (even among Infosys employees, of mistaking just products and platforms as 3.0) that suggests Infy's strategy is more complex than Cognizant's or TCS's. I have nothing against complexity. It might still work in the longer run. That's a point I made in the story as well.
 
 
NS Ramnath
I have been with Forbes India since August 2008. I like writing about ideas, events and people at the intersection of business, society and technology. Prior, I was with Economic Times. I am based in Bangalore. Email: ns.ramnath@gmail.com
 
 
 
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May 31, 2013 14:04 pm by Vijay
I'm surprised that the top 5 giants are just accounts for 3.7% of IT services market. But it's no surprise that TCS is no 1. Even if you see figures of 2013 there are very large deals being awarded to TCS. So no doubt it will be the first this year as well!
May 30, 2013 20:46 pm by Dr.A.Jagadeesh
I am glad that TCS is on the top in Indian IT in global rankings. Congratulations. Indeed TATAs have a unique business culture always standing for quality. Dr.A.Jagadeesh Nellore(AP),India
NS Ramnath
NS Ramnath
May 30, 2013 14:40 pm by NS Ramnath
Hi Abhijith, thanks for the comment. Three points. One, Kris Gopalakrishnan and Shibulal have given a couple of very good presentations on Infosys 1.0, 2.0 and 3.0 to analysts. Please do have a look at them. They clearly say it's chronological. Two, I guess you are also under the assumption that Inf...
May 29, 2013 23:32 pm by Abhijith
In the Infosys 3.0 story, you mention that "Implementing 3.0 took the attention away from scaling itself up and towards building tomorrow’s enterprise for client." How is this dichotomous? How is helping clients prepare for their tomorrow bad for business? Besides, company spokespersons have indi...
 
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