"The next $ bn will not take 23 years"

One of the core member of the team that decided to set up Infosys Technologies under the leadership of Narayan Murthy in 1981, Nandan M Nilekani today heads India's second billion dollar IT company, Nilekani. Talking to Prasanto K Roy and Shubhendu Parth of CyberMedia News, Infosys’ Managing Director, President and Chief Executive Officer shared his views about what it means to be in the $ billion club. Here are some excerpts of the interview.

What does becoming a billion dollar company mean to Infosys?

It certainly is a milestone that signals the arrival of Indian companies on the global stage. However, what is important is to understand that this milestone has happened during one of the most difficult times in the industry. Infosys went public on March 11, 1999 and during the fiscal ending, on March 31, 1999, we were a $121 million company. This was the height of the bubble. Five years since then, the customers have changed and the industry also witnessed a economic slow down. During this time, Infosys grew from $121 million to $one billion. I think the billion-dollar mark is the manifestation of what is possible and what we can do even in such difficult environment.






How would you describe this achievement in the global context?



I think it's a progression. Today we have three clients who earn us more than $50 million in revenue every year. Our total revenue was round $50 million six to seven year back. So it’s just a progression. You just keep growing, adding customers, adding services, building capabilities... but the more important point is that at $one billion, we have 25 percent net margin. Its not just about size, it’s also about profitability at that size.






When do you think Infosys will be hitting the next billion mark?


It certainly won't take 23 years. But I cannot predict that. All I can say is that this year we expect to grow at about 30 percent in dollar terms.





Would Infosys focus more on the domestic market, henceforth?


I think as the years go by, the Indian market will begin to assume more importance for us and it will be one more market that we serve globally. But at this point of time, we have a big foray in banking. We have the largest market share of banking sector through Finacle-Punjab National Bank, Oriental Bank of Commerce, Bank of India, ICICI-you name it. I think we are dominant in the banking sector and that would remain our focus area for the time being on the domestic front. Decision not to tap the domestic market is not an ideological one. It's just about the right time, value proposition and the right size. We keep assessing these and once we figure out the right mix, we will do it.





Do you think the company would have grown faster, had you taken the inorganic route?



Let me make it very clear that we will not acquire anything just for growth. We are open to acquisition if it helps us fill any strategic gap in our vision and mission of building the next generation IT services and consulting firm. So anything that we will look for acquisition has to essentially be something that we cannot possibly do organically or something that will take too much time. However, what is more important is that we should have the confidence that we can seamlessly integrate the two companies, including the people. Remember that a service business is all about people and you loose the entire game if people from the company you have bought walk out. Acquisition is not an alternative means of growth, neither are we looking at it as a substitute. Growth must come essentially from treading organic plan and acquisition might just help us to do something faster or acquire a new technology. It may also help us add new client base or a new geography, but it has to be strategic in intent. Acquisition for just bulking up is a clear no.






How did the Infosys model really work out?



Actually when Infosys was formed, all of us were working with Patni in Mumbai and Narayan Murthy was our boss there, heading the software group. The group strongly felt that there is a need to create a very professional company, one that was based on very strong ethics and values. We also wanted to create a company that really valued people. That is how we started. The fact of the matter is that there were many such companies that started at the same time during early '80s, however, what made us different was that we stuck it out-we realized that it was not a sprint but a marathon and we were long distance runners. We went through difficult times, but none of us digressed from the common vision. All of us believed that Infosys was bigger than any of us and we were willing to subordinate our egos and our desire to larger boats. I think that determination to create a world-class company, to stick together, willingness to keep Infosys ahead of any individual-perhaps these are the characteristic not many people and companies had to the extent we had. That's why we were able to last the marathon for last 23 years.