Vishal Sikka, chief executive officer and managing director of Infosys, said on Wednesday that despite the firm’s rapid progress in bringing innovations powered by automation, artificial intelligence, products and platforms, there is no way it would become a product company. This is because of the fact that the world itself is moving the services way with disruption happening in every segment, he said, while addressing the Morgan Stanley TMT (technology, media and telecom) conference held at San Francisco on Wednesday.
“The endeavour is not to become a product company; that will completely miss the point. At a time when everything is becoming a service, why would a services company want to become a product company?”
The Infosys CEO also reiterated the commitment to achieving the industry leading growth in the ongoing financial year and the long-term goal of touching $20 billion in revenue with 30 per cent operating margin and $80,000 revenue per employee in calendar year 2020. The company, he said, would be able to achieve these with minimal investments, both in people as well as acquisitions.
“I’m quite satisfied with the early progress, but it is still early and a lot is still in front of us. Our endeavour is to have consistent profitable growth and we don’t believe in sacrificing margins in order to grow. We are on track to get to industry leading growth in the next financial year. We want to be a global leader in this new kind of IT services,” Sikka added.
After Sikka assumed the charge of CEO & MD at the Bengaluru-based firm in August 2014, Infosys had introduced a new strategy with a focus on renewing the existing services and getting into newer areas. A part of that strategy was to acquire newer capabilities by acquiring small but niche technology companies. Sikka said the company would continue to look for such companies, but it’s not looking at any large acquisition for scale.
“Our objective is to have consistent profitable growth and we believe we can achieve all of these without making too many investments,” said Sikka. “We will make acquisitions, small ones, very niche, focused on high and complex technologies, which will give us a jump in our road forward and enable us to accelerate our journey, and that is something we are excited about.”
During the past 18 months, it has shown steady improvement in its performance, led by the new management team with Sikka at the forefront. The firm’s deal win rate has risen considerably while the size of the deals has doubled to $800-900 mn in a quarter compared to the earlier period.
Besides, the growth rate of the top clients has now exceeded the average company growth rate.
Sikka said as the company was now in the midst of a journey to become the next generation services company, its focus would be on getting into more outcome-based and fixed price projects that would require new kind of expertise to sell the software and IP-led innovation.
“I think, going forward the go-to-market has to scale to bring innovation to every client. We need to bring this to every client now and that’s our big endeavour as we look at the new financial year ahead of us.”
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