January 28, 2021

Infosys Eyeing Startups, Sees Over $1 Billion Revenue Boost

infosysInfosys is set to identify and incubate about a dozen new ideas that could potentially bring $100 million (about Rs 620 crore) each and a total of over a billion dollars in incremental revenue annually over the next few years, as part of a strategy being spearheaded by CEO Vishal Sikka to propel growth at India’s second largest software exporter.

The company is in the process of identifying new ideas after zeroing in on areas such as artificial intelligence, automation and Internet of Things, two people directly familiar with the strategy said on the condition of anonymity.

Incremental revenue or the amount of additional revenue an IT company pulls in a year is a key indicator of market share gains because it includes wins of new contracts. “Realistically, generating revenue on such a scale consistently from new bets will take at least two-three years,” one of the persons said.

Executives including Edge-Verve head Michael Reh, platforms head Abdul Razack, and architecture and technology head Navin Budhiraja are currently already working on some of these projects.

“Some recent hires from SAP were a step in the direction of this strategy — Sikka wants people like Michael Reh, Abdul Razack, Navin Budhiraja to specifically take charge and execute some next-gen ideas that could translate into millions of dollars of fresh business for the company,” the person added. Infosys did not respond immediately to an email query.

In a meeting towards the end of last year with top customers, advisors and analysts, Sikka had presented a broad outline of this strategy and spoke at length on the potential of these ideas, said one of the people present at the gathering.

Already some results are visible. One of the new ideas in the area of automation has already resulted in a customer outsourcing project being completed a few months ahead of schedule, according to a person cited earlier. This rarely happens in the business of IT services, the person said, explaining that IT firms typically want to maximize revenues from a project by extending the tenure of a contract.

“Abdul (Razack) was one of the key architects of HANA — Abdul has a software development background and what they’re building now is a team that can build intellectual property. They’re also building models around partner ecosystems,” said Ray Wang, founder of Constellation Research. “To succeed in a digital world, you need to have people who are excited and capable of building on top of platforms — you have to build software and attract people to your platform.

Since Sikka took charge, hundreds of company executives and employees have done a course on design thinking that aims to solve problems with a creative, systematic approach.