The software product revenues of India’s second biggest IT firm Infosys declined by close to 10% in FY15 largely due to certain challenges associated with Finacle, its core banking software. The software product revenues of Infosys stood at Rs 1,653 crore last fiscal as against R1,828 crore in FY14, revealing a decline of 9.5%, according to the company’s latest annual report.
Software products contributed about 3.2% to Infosys’ overall revenue in FY15 as against 3.6% in FY14.
Finacle, which is present in 84 countries with 547 million customers, saw its revenue during FY15 declining by 9% in constant currency terms but showed signs of turnaround in the last six months of the fiscal. In Q3 of FY15, it recorded a sequential growth of 4.9% and 14.2% in Q4, both of them in constant currency terms. The software products and platforms business of Infosys has all been consolidated under its subsidiary, EdgeVerve, which was formed in April, 2014. Infosys has also brought in Finacle under this fold and the final integration will be done by August, 2015.
Infosys, which is charting the “renew & new” strategy under CEO Vishal Sikka, has laid emphasis on faster acceleration from the products, platforms business of the company though the core focus would be on its bread-and-butter services business.
“We are a services company, we are going to continue to be a services company, but we do foresee that the next generation services company is one where the traditional services are augmented or amplified by software or product-type services, IP-oriented services. We see now that happening with Edge, with Finacle, as well as the platforms that we are surrounding with,” said Sikka during the company analyst call following the fourth quarter results of FY15.
The EdgeVerve and Finacle businesses of Infosys are now headed by Michael Reh, senior vice-president and global head, who was formerly with SAP. EdgeVerve Systems currently has a 600-plus member team with R&D centres located in Bengaluru and Pune. This does not take into account the members of the Finacle group.
In April, 2015 Infosys executed an agreement to bring Finacle and Edge services into EdgeVerve at a consideration of R3,400 crore and R220 crore, respectively.
Infosys has a long history with providing banking products which in its earlier form was called Banc1993. In 2000, it was relaunched as Finacle and currently provides host of solutions, which include core banking, e-banking, mobile banking, CRM, etc.