Infosys turns aggressive
Infosys deciding to focus on growth is an old story. In July 2008, Mint quoted the then CEO Kris Gopalakrishnan as saying “In the past 12 months, we had focused on margins because of an appreciating rupee and slowdown, and now we are focusing on growth.” The report added, “Gopalakrishnan admitted that the company had in the past been “selective in chasing deals” because the “focus was on (profit) margins”. Things will now change, he seemed to suggest.
It didn’t turn out that way. Far from running faster, Infosys seemed to flounder during the years that followed. This year, its top executives told analysts that the company, once the industry bellwether, might not even meet its 5% growth guidance.
So, when I read in Business Standard that – “Infosys has tried for a long while to maintain its prices and margins, even if this hits growth. This seems to be changing.” – my reaction was: “Or, may be not.”
It quotes analysts analysts Viju George and Amit Sharma of JP Morgan Asia Pacific Equity Research: “(Basab) Pradhan explicitly confirms that the company has turned aggressive on pricing to drive volume growth, primarily in traditional IT (information technology) services. Also, the company is much more flexible in negotiations with clients on various issues such as contract structuring.”
It’s not clear what the term ‘turned aggressive’ translates to. Infosys might have become more aggressive than it was, but what matters is how aggressive it is in relation to its competitors. An executive from a rival IT firm (speaking about the status of IT sector in general) quoted Lewis Carroll: “Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
N Chandrasekaran on the changing landscape
TCS CEO N Chandrasekaran, in a short piece in, Business Line reminds us of big trends, and how companies must react: IT industry needs to raise its game to be effective in such a fast evolving climate. Organisations need to be able to not just collaborate but co-create. Instead of delegation, we must create democratised organisations and lastly create a culture of empowerment through engagement not only for our employees but all stakeholders. More..
Read our earlier story – The Planet of Apps – to get a sense of how Chandra himself is trying to do it.
Microsoft Vs Google
Earlier this year Microsoft mocked Google for trying to get into its territory – of serving large enterprises – by posting a video, of all places, on YouTube.
As 2012 ends, Google’s grin seems to be widening. New York Times reports that Google Apps is gaining acceptance in larger companies too. “In the last year Google has scored an impressive string of wins, including at the Swiss drug maker Hoffmann-La Roche, where over 80,000 employees use the package, and at the Interior Department, where 90,000 use it.”
Over at AllThingsD, Amit Singh, a Vice President at Google and head of its Enterprise unit, explains how it managed to get them on board: Its a combination of things. In this industry, once you see others going for it, you do it. However, there have been some confidence-building measures….. More