Infosys, India’s second-largest IT services exporter, will look to acquire niche firms engaged in next-generation technologies, such as artificial intelligence, automation, internet of things and collaboration and design technologies.
Addressing the Infosys analyst meet in Pune on Thursday, chief executive officer Vishal Sikka said, “The core focus is our own organic growth but we believe it is necessary to complement it with an active inorganic strategy as well. We are interested in acquisition of small innovative companies. We are not interested in acquiring technologies of yesterday but in acquiring technologies of tomorrow.”
Sikka, who took over as the first non-founder CEO of Infosys in August this year, remarked the company would also look at inorganic options in under-penetrated segments and geographies. Infosys has always been cautious on acquisitions. The last company it acquired was Lodestone, in 2012.
However, it has now intensified efforts of engaging with software startups globally. The IT major, which has created a separate fund to invest in these startups, is already holding talks with three such firms. Sikka said, “We have been working with startups to bring their capabilities to our clients and also extend it our operational services.”
Sikka, who presented an overview of the future direction of Infosys, affirmed that there was a massive and fundamental transformation occurring in the software industry. This is being driven by the increasing use of technologies such as artificial intelligence, automation and mobility among others. However, the Infosys CEO reiterated that it would not reduce its focus on existing lines of services while scouting for new businesses. He said that Infosys would be renewing existing businesses while searching for the new avenues.
On the operating profit margins of the company, Sikka maintained that as it goes about building a next-generation IT services company, Infosys will aspire to be a industry leader in revenue and margin growth. The IT major is expecting to maintain an operating profit margin of 25-28% over the medium to long term.
“Once again, we aspire to become the leading bellwether IT company we used to be, but it will take time and will not be easy,” Sikka remarked.
Addressing the meet, Infosys Chief Operating Officer Pravin Rao said that the company has been making efforts to improve sales effectiveness and has hired over 200 such professionals.
He said that they have undertaken various measures to bring down attrition through a combination of improved compensation packages and attractive career paths.
Sikka wants fundamental change in mindset
CEO Vishal Sikka has said he wants to change the fundamental mindset at Infosys, which revolves around following orders. “One of the depressing things that I have learned in last four months is that clients think of us as a beautiful follower of orders and not people who are bringing innovation,” Sikka said during the analyst meet. The next wave of murmuration — a new initiative for employees to share ideas — will be for those learning to speak up. Sikka felt that a change in mindset from problem-solvers to problem-finders will be the essence of innovation.