december 29, 2017 forbes india | 85This near-term turnaround in
fortunes has been triggered by a
broader rally in top Indian IT stocks
this year as well as a strong growth
in the American economy, the largest
market for Indian IT. The latest
report released by the US’s Institute
of Supply Management shows that
manufacturing activity in the US has
surged to a 13-year high in September.
The IT behemoth that failed to
latch on to the tailwinds was Infosys,
which saw an 11 percent drop in its
stock price after the conflict between
founder NR Narayana Murthy and
Vishal Sikka, the company’s first
professional CEO. In absolute terms,
Murthy’s wealth fell only by a small
amount—as little as $50 million, in
comparison with his estimated total of
$1.82 billion after the fall—but his rank
tumbled 22 places to 84. Co-founder
Nandan Nilekani, who is now back in
the Infosys saddle as non-executive
chairman, saw his rank dip by nine
places to 89. This despite his wealth
rising by $90 million to an estimated
$1.71 billion over last year’s numbers.
Third co-founder Senapathy (Kris)
Gopalakrishnan maintained as much
wealth as he did last year, but dropped
11 places in the rankings, from 81 to 92.
Infosys stocks tanked close to 10
percent on August 18 itself, the day
Sikka announced his resignation, and
hadn’t recovered much by the end
of the September quarter. Nilekani’s
return brought about a semblance of
stability, but only just. In comparison,
Tata Consultancy Services gained
over 3 percent in the first nine
months this year, Wipro a solid 17.8
percent and HCL Technologies
5.6 percent. Only US-based rival
Cognizant Technology Solutions,
which has most of its employees in
India, did better than Wipro, adding
29.5 percent in the same period.a
s the outsourcing industry
struggles, India’s top IT
companies are trying to
build new products that deliver
data analytics and predictive data
analytics-based information around
which they can offer higher-value
services. This is part of a larger shift
towards providing digital solutions,
the demand for which is quickly
shifting from small, pilot projects
to large-scale implementations
that clients expect will increase
revenue and boost profitability.
“It’s almost a Darwinian scenario,
as you will either be a disruptor
or be the disrupted,” says Frances
Karamouzis, vice president and
distinguished analyst at IT research
and consultancy company Gartner.
“These were once the darlings,
everybody loved them [in India]
because they created jobs, but now,
here they are in a very different place.”
The linear structure where net
new headcount correlated with net
new growth is being dismantled,
and “hence you see development
of Ignio, Holmes, and what was
once called Mana and now Nia [the
artificial intelligence platforms
for TCS, Wipro and Infosys,
respectively]”, Karamouzis says.
An important way these companiesare adding new capabilities is by
buying them. HCL, for instance, has
most recently purchased Britain’s
ETL Factory Ltd, which sells a data
management automation platform
called Datawave. Indeed, over the
last several years, HCL has emerged
as a strong player in infrastructure
management services, which has
helped it win large contracts.
Wipro’s Premji has invested both
in acquisitions to build Wipro’s
capabilities, and via his family-office
private equity firm Premji Invest,
which most recently invested $50
million in Apttus, a California-based
software startup. Apttus, which
counts salesforce.com as an investor,
is said to be close to an IPO, which
could make Premji even wealthier.
Acquisitions such as the
$500-million purchase of cloud
solutions provider Appirio and
reputable Denmark-based design firm
Designit, a little over two years ago,
have put Wipro on a strong footing
in the digital era, writes Phil Fersht
of IT research and advisory company
HFS Research in a September 2017
report. “We view Wipro as a well-
resourced, disciplined outfit that
could emerge as a genuine contender
in the digital race,” he writes.
However, says Karamouzis, the
time for incremental change
is over and even plans like Infosys’s
to hire 10,000 people across four
innovation centres in the US just
aren’t bold enough. “In their DNA,
they are engineers, so they are not
afraid of technology or what it can
do, therefore in that sense, that part
of their foundation is strong,” she
says. On the other hand, with more
than 80 percent of their workforce
being in India, and even many of those
permanently based in the US being
Indians with a green card, they have
a homogeneity, which works against
them, she adds. “Eventually if they
really want to be global, they need
to create more heterogeneity.”TOP GUNS
Azim Premji, wipro, 2*
Shiv Nadar, hcl technologies, 7*
NR Narayana Murthy, infosys, 84*
Nandan M Nilekani, infosys, 89*
Senapathy Gopalakrishnan, infosys, 92*
*rich list rank“it’s almost a darwinian
scenario, as you will either be a
disruptor or be the disrupted.”