Six people dreamed a crazy dream 20 years ago. In socialist India, they believed they could make money—lots of it—honestly. They believed they could put India on the technology map of the world. And they believed they could do something everyone desires but few manage—make a difference. Well, they did. That dream is called Infosys Technologies and it has grown from six people to over 9000, from one room to a sprawling 52-acre campus in Bangalore and 21 offices worldwide. But most importantly, it has grown, as president, MD and COO Nandan Nilekani calls it, "from an idea to a Rs 1,900-crore company".

It has not been an easy journey. In 1991, after ten years in existence, gross revenue still stood at a mere Rs 5 crore—all of it came from really low-end grunt work. The work was as uninspiring as were the financials. Then suddenly, things changed. The founders went through an intense bout of soul-searching, around the same time the economy opened up. The ten years since have seen Infosys growing from Rs 5 crore to a Rs 1,900-crore behemoth, of which last year was easily the best.

Despite the US downturn, the company’s revenues grew by 115% from Rs 882 crore to Rs 1,900 crore. Gross profit went up by 113% and net profit jumped 114% to Rs 293.5 crore. In simple growth terms—the company far outstripped every other company.

While the financials did well, Infosys hit the high spots in other areas as well. It almost doubled its workforce from 5,389 to 9,831 people; topped various Asian and Indian surveys on human resources and business practices (including Dataquest’s survey on ‘Best Software Employers’, May 31, 2001 issue); and chairman NR Narayana Murthy became the best-known and most-talked-about Indian businessman last year. Last but certainly not least, the company finally moved into the Big Five—from a DQ Top 20 ranking of Number 9 last year to Number 5 this time around.

De-risking its business

This was both a year of change and of constancy at Infosys. To begin with, it continued de-risking its business with a smaller proportion of revenues coming from its Top 5 and Top 10 customers. An unhappy experience with GE—its largest customer—at one point of time ensured that the company would never again depend so heavily on any single client. At the same time, its SEI-CMM Level 5 certification and a sound global delivery model ensured that 85% of its revenues still came from repeat customers. The company also began the process of diversifying its geographical reach. The overwhelmingly US-centric business orientation began to change as the downturn hit Indian shores in Q4—which was when most software exporters began to question the wisdom of having all their eggs in the US basket and started exploring the European and APAC markets. As a result, 18.8% of Infosys’ revenue came from Europe, while that from the US came down from 78% to 73.5%.

There have been no major changes in the verticals that Infosys has traditionally dealt in. In line with previous years, the company continued to be strong in the banking and financial services segment, with 33.7% of its revenues coming from here. Some of this was foresight, some fate—financial services remained the only sector that remained more or less unaffected by the economic slowdown.

Other verticals where the company showed a strong presence was utilities, transport, logistics and manufacturing (clients included Siemens Energy & Automation and Dell). The most interesting development, though, was the company’s relatively strong showing in the telecom sector where it bagged some large clients. These included Vodaphone Networks—one of the largest mobile telecommunication companies in the UK, China’s Huawei Technolgies—the telecom equipment company—and CopperCom.

The focus in application areas also shifted. The company had started phasing out low-level Y2K work by the fourth quarter of 1999-2000 itself. And last year, it finally moved completely out of the Y2K and post-Y2K application areas to more complex projects, including technology road map and processes consulting. It also began a shift from grunt work like coding and debugging to higher-end tech services like e-biz consulting, design and implementation. Its banking software—Finacle—made no waves overseas, but was picking up in the domestic sector at last count.

That really was the Infosys story this year—shifting geographies, a slow move up the value chain and greater investment in HR—all of which added up to an over 100% growth. But some of the changes that were set into motion may have come a little late, leading to the only sour note in last year’s upbeat story—chairman Narayana Murthy’s announcement during the Q4 results of a drastically curtailed 30% growth projection for 2001-2002. But then, that is next year’s story.