The only dark spot has been consulting. The contribution of consulting revenue to total revenues has declined from 4.3% in FY 03 to 3.6% in FY 07. But that includes the parent companys revenues from consulting. Infosys Consulting contributed just about 1.5%. Though it grew 49% last year on a very small base, losses more than tripled. On revenues of Rs 213 crore, it made losses of Rs 110 crore.

Infosys Consulting, even today, has a separate website. Its composition of workforce is very different with 80% of its workforce non-Indians. In Infosys overall, that is just about 4%. Though it has tested success in some engagements the long-term impact that Infosys was expectingeither in terms of revenue contribution or mind sharehas been negligible. Infosys has to take a tough callit has to choose between completely integrating it with IT (and probably stop measuring it as a separate service line) and maintaining the structural status quo with added effort to make it viable as a separate service line. We expect to see some strategic decisions this year on that.

The other two subsidiaries of InfosysInfosys China and Infosys Australiahave performed along expected lines. While the China subsidiary did make losses, it is still clearly in the investment phase and every company in China is figuring out how to make the business work. Analysts say that, if anything, Infosys is a little ahead of other IT services players in China. Infosys Australia, that it built through acquisition in 2004, has stabilized and is making profits.

The year 2006 was Infosys 25th year. It celebrated the occasion in style, ringing the NASDAQ bell from its campus in Mysore. The year also saw Infosys announce a change of guard. Nandan Nilekani, the man who gave the idea of a "flat world" to Tom Friedman decided to relinquish the post of CEO in favor of S Gopalakrishnan. In August, Narayana Murthy stepped down as the executive chairman. Nilekani became executive chairman of the company on June 22, 2007, the day Gopalakrishan became CEO.

Infosys denied rumors that it was bidding for Paris-based European services major Capgemini.

Infosys not only grew much faster (45%) than peers Wipro and TCS, it also saw net profits soaring by 56%. The contribution of application development and maintenance came down to 58%. IP creation, another priority, got a boost as Infosys had 81 patent filings at the end of FY 07.

The most important achievement, operationally, however, was an impressive rise of close to 4% in revenue per employee. DQ

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