March 15, 1999
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INFOSYS TECHNOLOGIES: N R
NARAYANA MURTHY Imagine and Arrive " We feel happy at having made the employees and shareholders rich".
At the squeaky-clean headquarters of Infosys on Hosur Road, 20 km from Bangalore city, the mood is so upbeat now that it is difficult for either Murthy or Nandan M. Nilekani, fellow-founder of the company and its present managing director and chief operating officer, to even remember the struggling years. They are young by Indian corporate standards; Murthy is 52 and Nilekani is 43. But the employees of the company -- with branches spread across the US, Canada, England and Japan -- have the average age of a little over 26. Across the age barriers, what binds the "Infoscions", as Murthy likes to call the employees, is neatly summed up in the words of George Bernard Shaw as quoted in the company's latest annual report: "Imagination is the beginning of creation. You imagine what you desire; you will what you imagine; and at last you create what you will." In the infancy of the computer industry in India, when Murthy struck out, there wasn't much on offer except imagination, the import duty on computer hardware then being a dreadful 335 per cent. The duties were cut later, but for companies like Infosys the road to growth lay in software, not hardware. In knowledge, not the tools of knowledge. The "knowledge opportunity" opened up when the falling prices of micro-processors motivated businesses across the US and most of Europe to use their information systems for efficiency improvement. That required zillions of bytes of data to be processed, reprocessed, codified, compressed and made usable any which way its owner demanded. Infosys, like most others, sent its pack of software professionals to the customer site in the West for "body shopping". But labour export is hardly the stuff of imagination. Infosys found its inner rhythm in the mid-'90s when the steady fall in chip prices loosened the monopoly of long-distance telephone companies and telecom prices dipped the world over. In India, there were only 10 dedicated high-speed (64 kbps and above) data links used by software companies in 1992; the number has become 590 now. "Death of distance," as Nilekani puts it. As geographical barriers crumbled, Murthy and his team changed outstation software jobs from on-site to offshore, honing programmes for client companies in Chicago or Los Angeles from Bangalore or Mumbai. Now, of the 3,593 Infoscions, only 625 are working on-site. While the shortening of the virtual globe has given Infosys flexibility, its customer base is breathtakingly global. Infosys has built the software infrastructure for the French sports equipment major Groupe Salomon. It has given US fashion speciality Nordstrom the computer programme to forecast and plan what to buy, when and at what price. It structured for Nortel, the $18-billion US telecom equipment giant, a software that monitors wireless phones' performance growth and traffic trends. And now Murthy is holding roadshows in the US for a $75 million (Rs 315 crore) American depository receipt (ADR) issue, the first by an Indian software house. That globalises the company's ownership, besides giving the staff the privilege to hold their stock options in dollars. In an industry with a high burn-out rate, actuated by rapid changes in technology, holding assets in dollars is a welcome privilege. Though the required changes in the law to make it possible has not come about in the recent budget, the industry is convinced that the policy shift is imminent. Murthy eats his lunch with staff at the canteen and lives in his modest three-bedroom house in the decidedly middle-class Jayanagar. But his vision is truly global. Under him Infosys has now been showing its accounts under both Indian and US accounting procedures. After the ADR issue, the Infosys stock will be the first Indian stock to be traded on Nasdaq. Murthy imagines what he desires, which is: "Indian software exports must reach $50 billion (Rs 210,000 crore) in the next seven-10 years from today's $2 billion (Rs 8,400 crore)." |
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In 1981, when N. R. Narayana
Murthy -- an M.Tech from the first batch of computer engineers at IIT Kanpur -- gave up
his job in a Pune company alongwith three of his colleagues to start Infosys Technologies
in Bangalore, they fished for the last coin in their pockets to find just Rs 10,000 as the
share capital. Eighteen years down the line, that investment of the promoters has become
worth more than Rs 1,500 crore. The smart investor who picked up 100 Infosys shares at Rs
9,500 in 1993, when the company issued its maiden public issue, can now rake in around Rs
13 lakh following two stock-splits in 1994 and 1997. 
