Now, Infosys looks at tomorrow's enterprise!

BANGALORE, INDIA: After quarters and quarters of cautionary guidance and talks about clouds in the horizon, IT giant Infosys Technologies is finally doing something to reap results from the coming demand and growth.

Criticized by market for just doing the ADM (Application Development and Maintenance) jobs, the company seem to have started paying some heed to market movements.

Established in 1981, instead of leading the market, the IT major is following the peer. IT is looking at capitalizing on enterprise business solutions and looking beyond its traditional Application Development and Maintenance business. Going by the results, it looks like declines in ADM revenues in the past quarters have forced the company to look out for options.

At the time of announcing the results for Q4 FY 2009-10, S D Shibulal, COO of the company, announced that while the revenues from systems integration had a marginal boost, the revenues from ADM business suffered. He said, “I believe the trend will continue and our revenues from non-ADM business will see an increase as a percentage.”

According to a market researcher who requested anonymity, “Companies like Infosys will have to struggle hard for revenues and growth. And if they do not reduce the pie of ADM business (which is a basic service) and look into more innovative and enterprise-focused offering, they would lose their market stand to the faster growing and more innovative companies like Cognizant.”

From the quarter ending December 31, 2009 to that of December 31, 2010, there has been a further dip in the contribution. It has now come down to 38.1 per cent from 42 per cent. According to a report in Outlook magazine, contribution to revenue from the basic ADM service had declined from 65 per cent in FY03 to 47 per cent in the twelve months ending December 2008.

This could have been a sign of an ongoing evolution towards their new mantra of building tomorrow's enterprise, but there does not seem to be a focused direction, as the percentage drop in ADM failed to show substantial rise in any other service offering; only consulting services and packaged implementation, testing and system integration showed marginal increase.

The company had been criticized for its defensive approach in announcing the guidance. While IT majors like TCS and Cognizant talk about strong growth and defeating the recession, Infosys takes cautionary step.

There are a lot of questions to be answered by the company, but unfortunately in this era of free press, and burgeoning citizen journalism, Infosys chose just two media agencies to share their viewpoint. They ignored the host of newspapers, magazines, tabloids, news portals, bloggers and investors (reading these news).

The announcement for this branding exercise is not new. During the Infosys analyst meet in November 2010, CEO Kris Gopalakrishnan, while talking to their investors after the Q2 FY 2010-11, had shared that the company would soon announce the Infosys 3.0 which would have five transformations.

Starting with building tomorrow's enterprise, Infosys will look at commerce, change market focus from North America to emerging economies. They will also look at East Europe, China, Philippines, Latin America and lastly bring new business models for clients.

One may question the newness about the new mantra, as they talk about doing transformational, operational and innovation partnership, but it had been an ongoing practice.