How Infosys Became the Second Largest IT Company in India

Infosys is the 2nd largest Indian IT company after TATA Consultancy Services. Founded by seven engineers in Pune, this company has risen to be one of the most recognisabe brands in India and the World.

In this article we look at the journey of this prestigious company and its marketing strategy.

The Infosys Story

Infosys was founded in 1981 at Pune, by Naryana Murthy, Nandan Nilekani, N. S. Raghavan, S. Gopalakrishnan, S.D. Shibulal, K. Dinesh and Ashok Arora.

All of these founding members were former employees of Patni Computers.

Infosys was shifted to Bangalore to Pune in the year 1983. After the move, Infosys got a contract from an US based company Data Basic Inc.

Infosys set up an office in California (US). This was done to capture clients from US and bring to India. Currently this is also their headquarters in the US.

The year 1989 was a year of difficulties for Infosys. KSA, a company in collaboration with Infosys collapsed, and one of the founding members, Ashok Arora quit the company.

Founders and team members of the company gathered for a meeting in Bangalore to discuss next course of action.

In the meeting, it was suggested that the company be sold. Infosys was already getting offer worth $1 million from investors.

Narayana Murthy, a founding member of the company objected to the suggestions and wanted to buy shares of all the shareholders. He wanted to be with the company through thick and thin.

This resilience of the founding memeber touched the whole team and they united to work even harder.

For the next 2 years, the company members worked day and night.

As luck would have it, in 1991, India took the first steps towards a liberalised economy.

Big foreign companies started to come to India. General Electric, Nortel Networks, Reebok were some of the brands that entered India at that time.

These companies needed software and Infosys became their vendor.

The foreign companies preferred India because of the cost factor. They were getting their software jobs done and 1/4th of the cost due to the coparatively cheaper and skilled engineers of India.

According to NASSCOM, the number of skilled engineers in India in the year 1998 was 2 lakhs.

Another factor that contributed to Indian engineers doing well in this industry was their ability to pick up English fairly quickly. Most software was done in English and it helped when enginners were able to speak and write the language well.

The proliferation of the software industry was also helped by better telecom services at that time. Govt. also poured in money for the software industry.

From 1991 to 1996, India saw five successive governments. But the good thing was that the sofware sector continued to get Govt. support throughout.

During that period, Indian sofware industry grew by 56%.

But Infosys was facing competition too. Wipro, TATA Consultancy, Satyam Computers, NIIT and Mastek were giving Infosys competition for projects.

These companies together accounted for almost 60% – 65% of total software work in the country.

In the year 1993, Infosys went public with a share price of Rs. 95. Initially the shares did not get the desired response and was undersubscribed.

Undersubscribed means that the demand for the shares went below the number of share issued.

It was bailed out by US investment Morgan Stanley, which brought 13% of shares at the offer price.

Infosys shares got listed in Nasdaq in 1999. Nasdaq is an online marketplace for buying and selling securities headquarted in New York.

It was the first company to be listed in Nasdaq. Share price of the company jumped to Rs. 8,100 making it the costliest share listing at that time.

Products and Services

Infosys core products and services are –

• Next Generation Integrated Artificial Intelligence Platform (was called MANA previously)
• Global Management Consulting Services
• Cloud based enterprise transformation services
• Banking Solution including retail and corporate banking
• A Cloud Suite of products
• Infosys Equinox for E-commerce

Infosys provides software development, maintenance and consultancy services to various companies across multiple industries. They serve clients from both private and public sectors.

One of their best known products is “Finacle”. It is a banking solution used by more than 152 banks across the world.

Focus on Enterprise Software

Infosys stared a subsidiary product company in July 2014, called EdgeVerve Systems. This company was formed to look after the enterprise products suite of software.

EdgeVerve Systems software provides solutions for business operations, customer service and procurement with a focus on Artificial Intelligence, Automation and Analytics.

Since inception EdgeVerve Systems has been growing rapidly and has more than 400 worldwide customers at present.

Business Model

The business model of Infosys revolves around software products and managed IT services.

In most cases the IT services follow the products and vice versa.

Initially Infosys focused on providing solutions to finance sector, mainly banking and was also active in testing and maintenance of software services.

Later it expanded to multiple sectors, offering solutions in various categories.

Infosys tries to establish a long term relationship with clients and covert them to partners. The company has sustainably implemented this strategy over the years.

Infosys also tries to develop unique products and services with AI and automation.

All their products and services are created to solve business problems. With a robust supporting service they make their offerings irresistible.

Infosys has made several strategic acquisitions. The acquired companies give Infosys the required leverage in producing better services.

Presence in multiple countries

Infosys is present in several countries across the world. It has sales and development centres in the United States, Australia, China, Japan, Middle East and Asia (including India).

Revenue

A large part of Infosys’ revenue is generated in the US followed by the Europe.

Here is a list of revenue from each area:

United States – 60%
Europe – 24%
India – 3%
Rest of the World – 13%

Infosys Acquistions

Infosys has acquired sixteen companies till date and the number is going to increase in the coming days.

It has made strategic acquisitions in the following areas of IT Services, Automation, Machine Learning, Management, Product Design, Salesforce, Customer Experience, Advertising and Digital Experience.

Marketing Strategy

Infosys has reached a point where it is a well known brand. Marketing has become much easier for the company with the kind of reputation it has acquired over the years.

Despite that, Infosys regularly organises and conducts marketing activities. To increase the goodwill of the company, Infosys has undertaken various academic initiatives.

Infosys offers sponsored trips, case studies and various speaker sessions that contributes to brand exposure and authenticity.

Infosys Foundation is an initiative that was founded for looking after social aspects of the company. Currently it is engaged in creating a equitable society and provide more opportunities for the underpriviledged.

The Infosys Prize is an effort of its science foundation and it honors outstanding achievement in contemporary research and science in India.