With Salil Parekh set to take charge of Infosys from January next year, the software major is betting big on cloud computing and cybersecurity to reignite growth. India’s second-largest software exporter, since its initial days, thrived on getting technology projects for Fortune clients, which involved writing or maintaining software codes for these companies.
With its recent acquisition of UK-based design firm Brilliant Basics, Infosys has managed to bag banking deals for its Finacle product, which could give a much-needed fillip to its platforms business. Sanat Rao, Chief Business Officer and Global Head of Finacle, told BusinessLine over the telephone that the software major was able to get orders from three banks recently, including two in West Asia and one in the US.
Salil S Parekh, the former executive of Capgemini who will take over as the new chief executive officer at Infosys, has an unenviable task at hand. From addressing the stakeholder concerns to managing investor expectations to taking the company through a big transformation, Parekh has a work which is truly herculean. Above all, his relationship with both the founders and the board will be closely watched.
NEW DELHI: On Saturday, India’s second-largest software provider Infosys announced the appointment of Salil S Parekh as their new MD (Managing Director) and CEO (Chief Executive Officer), bringing an end to a three-month search. Parekh who joins the company from French IT services company Capgemini has been appointed a five-year term and will take office from January 2, 2018.
Infosys may have overcome a big challenge by finding a new chief executive, but that’s not even half the battle won for the country’s second-largest IT services company which has been struggling for years to regain industry-leading growth. On Dec. 02, Infosys said it has appointed 53-year-old Salil S Parekh as its CEO and managing director effective Jan. 02, 2018. An IIT-Bombay alumnus, Parekh joins Infosys from French IT services company Capgemini where he was a member of the group executive board, roughly equivalent to a deputy CEO’s post.
Salil S Parekh’s experience in handling multi-cultural work environment combined with his strong grip on technology and sales make him the perfect choice for leading Infosys, say IT industry experts. Parekh was named as the CEO and Managing Director of Infosys and is slated to take charge at the helm of India’s second largest IT firm on January 2, 2018 for a period of five years.
Infosys Ltd. on Saturday named Capgemini veteran Salil S. Parekh as CEO and MD, filling the vacancy created at the top following the sudden resignation of Vishal Sikka on August 18. Mr. Parekh, who holds Master of Engineering degrees in Computer Science and Mechanical Engineering from Cornell University and was a member of the Group Executive Board at Capgemini, will join Infosys on January 2, 2018.
Salil S Parekh, the new CEO of Infosys, is described as a soft-spoken yet determined man by those who know him. And, they said, these skills will certainly come handy when he takes over the top role at India’s second largest IT company that is recovering from a year-long acrimony between the previous management and the founders, led by NR Narayana Murthy.
Infosys said today that its Board of Directors has appointed Salil S Parekh as Chief Executive Officer and Managing Director (CEO & MD) of the company effective January 2, 2018. The appointment ends a nearly four-month long search for the top job at India’s second largest IT services firm.
There was a time when the Infosys’s quarterly results set the tone for the $150 billion Indian IT service sector’s performance. The bellwether’s numbers influenced not just its own shares but even the benchmark IT indices on Indian bourses. But on Oct. 24, when the country’s second-largest IT company posted its financial results for July-September 2017 (Q2), the spotlight wasn’t on its net profit or revenue. Instead, it was mostly on the tussle between founder NR Narayana Murthy and the newly-appointed leadership.
A sense of excitement, of jumping into something green or greener, pervades right through IBM India offices today. The organisation is in the midst of transforming itself to focus on the Indian market. It is metamorphosing with the aim to grow the more profitable India business, even as globally IBM has reported 21 quarters of declining revenues.
Indian IT firms, especially in the mid-tier segment, have seen a rise of private equity firms placing stakes on them. While faster technology at mid-size IT services companies have attracted PE firms such as Blackstone, Carlyle, ChrysCap, Bain Capital, The Baring Asia and others to invest in the sector; PE-backed companies have seen faster growth at a time when their large listed peers slowed down due to uncertain market.
Corporate tussles have rarely been as public as the one between Infosys founder and former CEO N.R. Narayana Murthy and MD and CEO Vishal Sikka. That wrangle, which led to the latter’s resignation, has brought to focus many issues at the company.
As Abidali Neemuchwala completes six quarters as the chief executive of India’s third largest IT services firm, he seems to have figured out a way to break the jinx of sluggish growth that the company has seen for years.
Catch Sanchit Vir Gogia, Chief Analyst, Greyhound along with Anshoo Nandwaani, Principal Analyst, Greyhound on our latest Greyhound TV series, Analyst Axiom, a Greyhound Studios production.
A replacement for Vishal Sikka, the first non-founder to become the CEO and MD of Infosys, must be an internal candidate who has risen up the ranks and is favoured by co-founder N.R. Narayana Murthy, industry analysts said.
When Vishal Sikka took over at Infosys he was prescient about automation taking away jobs and clients shifting investment dollars into newer digital technologies.
India’s largest IT firm Tata Consultancy Services has appointed veteran Ravi Viswanathan as its global chief marketing officer. Viswanathan’s appointment comes at a time when the company, like its peers, is battling not just increasing competition but also heightened protectionism in its largest market — US. Viswanathan, who will be in charge of the marketing and communications functions and based in Chennai, will directly report to new CEO Rajesh Gopinathan.
On May 2, 2017 Infosys announced plans to hire 10,000 American workers over the next two years.
At Greyhound Research we believe, steps such as these by IT Services Providers eloquently tell a tale of the pressure they are experiencing under the new Trump administration.
The software industry is facing mounting challenges as countries from Australia to the United States have moved to tighten work visas to limit the influx of foreign workers.
American President Donald Trump’s policy to protect jobs by imposing restrictions on H-1B visas is unlikely to be of any help to that country and may hurt US interests, say experts. What Trump is seeking to protect are entry level jobs that are being phased out by the tech majors, with automation, artificial intelligence and robotics paving the way to increased productivity.
With the latest missive from the Donald Trump administration on H-1B visa, cautioning companies against misuse, the immigration issues of the Indian IT sector are back in news. And it is not the US alone that is drumming up protectionism for political gains. However, industry observers say that Indian IT services companies are resilient enough to weather such issues.
In a fresh blow to software professionals, the Trump administration has moved to bar entry-level programmers from the H-1B visa programme.
US’ decision to temporarily suspend the expedited premium processing of H-1B visas will lead to process delays for IT firms too.
The Indian software services companies will breathe a sigh of relief as the Indian ministries, authorities and industry lobby had a dialogue with a visiting eight-member US delegation headed by Congressman Bob GoodLatte, on the ongoing concerns of H1-B visa holders.
Despite the impending dark overtones cast on India’s IT sector, the reality on the ground is far from anything bleak. Irrespective of the announcements from US president Donald Trump, Brexit concerns and the slowing global economy, the IT sector seems to have factored the low spell and will be only marginally impacted. The sector will likely grow 8-9 percent in FY2017E and could grow at same pace or accelerate in FY2018, according to a technology report from Kotak Instituitional Equities released a week ago.
Donald Trump’s efforts to limit the number of temporary workers in the US will dent India’s software industry.
India’s famed multi-billion dollar information technology (IT) industry has been facing challenging times over the past 6-12 months with top-notch IT companies already facing earnings pressures in recent quarters due to tough business environment prevailing in their most lucrative US and European markets.
Today a legislation impacting H1-B visa programme has been introduced in the US House of Representatives making it difficult for companies in the US to employ skilled foreign workers. Among other things, the bill more than doubled the minimum wage requirement of H1-B visa holders to US $130,000.
It may not be a good time to be a techie in America. Correction: It may not be a good time to be a non-American in Trump’s America.
Software services industry, already facing pressures on profitability and revenue, has become the latest target of the Trump administration’s moves to protect American jobs.
Hoping for a “business-friendly administration”, Infosys chief Vishal Sikka says Trump himself is an entrepreneur and a business leader and therefore, he “expects that this will be the case where business and innovation friendly regime.”
“2017 is going to be a volatile year for the Indian IT industry,” says Sanchit Vir Gogia, Chief Analyst and CEO, Greyhound Research. “The pace of technological changes is very high and it will lead to substantial job cuts. The companies will try to be a lot leaner,” predicts Gogia.
Indian IT services companies have been facing competition from upstart players with highly specialised skill sets based in advanced markets, especially in areas such as cloud services and analytics. The cash-rich Indian IT companies are responding to this by acquiring companies overseas and thereby enhancing capabilities. Wipro spending nearly $1 billion in acquisitions last year is a case in point. In 2017, we are likely to see big boys of the Indian IT industry loosening their purse strings to make large acquisitions. “They will look at companies with sizeable revenues,” says Gogia.