Infosys Drama: Nandan Nilekani In, Vishal Sikka Out

RTIwala Explains:  Infosys was started by Narayan Murthy, Nandan Nilekani, N.S. Raghavan, S. Gopalakrishnan, S.D. Shibulal, K. Dinesh, and Ashok Arora, all of whom were former employees of Patni Computer Systems.

July 7, 1981, marked the birth of an NYSE listed global consulting and IT services company, Infosys. From a capital of US$ 250, Information Systems aka Infosys has grown to become a US$ 10.4 billion company with a market capitalization of approximately US$34.50 billion.

India is now perceived as an economic giant to reckon with, bursting with brilliant software engineers and ambitious entrepreneurs. All thanks to a fateful morning of January 1981 that led to the birth of a company that has out passed all barriers and today is the 2nd largest Indian MNC IT services company. It was the fateful morning of January 1981 when Narayan Murthy and six software engineers sat in his apartment debating how they could create a company to write software codes. Six months later, Infosys was born. Infosys co-founder N S Raghavan’s house in Matunga, North Central Mumbai, was its registered office. It was then known as Infosys Consultants Pvt. Ltd. Today it is known as Infosys Limited, after it went public limited company in June 1992.

The spices of struggle, day in and day out at Infosys

When they began moving ahead with Infosys, the founders took a firm decision that their wives would not be involved in the running of the company. There was no luxury, only struggle, day and night. They had no car, no phone. There had been days when Murthy did not have any money in his pocket, but he had dreams. The first years of Infosys were not smooth. Murthy, Nilekani, Dinesh, Shibulal, and Gopalakrishnan were into writing codes. However, they wanted to make an impact and make their presence felt in the American market.  So, Infosys got its first joint venture partners in Kurt Salmon Associates. But the joint venture collapsed in 1989, leaving Infosys in the lurch.

“We had nothing after eight years of trying to bring up a company. Those who studied with us had cars and houses,” says Gopalakrishnan. 

When Infosys listed on NASDAQ

Infosys Founders
(Photo Credit: Successtory.com)

It is said that Infosys began getting big breakthroughs from the US market. How? The initial foray of Infosys into the US market was through a company called Data Basics Corp as a ‘body-shop’ or on-site developer of software for US customers. Later, Infosys formed a joint venture with Kurt Salmon Associates to handle marketing in the United States. Even today, Infosys derives about two-thirds of its revenue from the United States, serving corporate clients like Reebok, Visa, Boeing, Cisco Systems, Nordstrom and New York Life.

Infosys is the largest publicly traded IT services exporter in India, providing services to 315 large corporations, such as GE and Nortel, predominantly in the USA. It was the first Indian company to list on the NASDAQ stock exchange in 1999.

1981-2002: An Aeon of Traditional Headways at Infosys

Narayan Murthy
(Photo Credit: Infosys Official)

Going by the records, most of the biggies in the realm of Indian corporate have had their fair share of hardships, to begin with. The story of Infosys is no different. Since its inception in the year 1981, there has been a considerable amount of changes in the company’s core functioning body. Further, let us go through the various appointments and attritions behind an indomitable brand of the Indian IT era.

The company has visibly remained traditional in its managerial approach until recently. The fact that one of the founders himself headed the company’s operations as the Chief Executive Officer, Mr. Narayan Murthy, since the beginning. It was only when Murthy decided to step down in the year 2002 after his 21-year long tenure as the top executive that Nandan Nilekani, one of the co-founders took up the top job at Infosys. By then, the company recorded a revenue worth $400 million.

Murthy at EY Awards
(Photo Credit: Pinterest)

Although Murthy stepped down as the CEO, he continued as the Chairman and Chief Mentor to the company till the year 2011. However, the year 2003 marked a key milestone in his more than three decades -old career, owing to the Ernst & Young World Entrepreneur of the Year award.

2002-2007: An Era of Globalized Dominance of Infosys
Nandan Nilekani
(Photo Credit: The Indian Express)

As Narayan Murthy passed on the Chief Executive office to co-founder Nandan Nilekani, Infosys’ revenue already stood at $500 million in the year 2002. This year also saw a major diversification by the company in the form of Progeon, Infosys’ BPO arm. What followed was a string of global business centers in Netherlands, Switzerland, and Singapore. Moving on, the next couple of years saw major expansions and diversification in terms of the company’s new subsidiaries in China and Australia in tandem with Infosys Consulting Inc. being launched.

On the company front, numbers suggest that the company grew remarkably marking a six fold growth in a mere 5 years of Nilekani leading the company’s growth and executions. The year 2006 happened to be one of the very eventful ones for Nilekani, given that he was honored with Padma Bhushan, one of the most coveted civilian awards of the country.

In the same year, he was named as the Businessman of the Year by Forbes Asia and was also named to be among the youngest entrepreneurs to join 20 global leaders on the World Economic Forum Foundation Board. The year 2006 saw Narayan Murthy retiring from the company’s core body but continue as Chairman Emeritus and a mentor to the IT giant. By this time, the company had reached a revenue mark of $2 billion and an employee strength of over 50,000, under Nilekani’s leadership.

Aadhar by Nandan Nilekani
(Photo Credits: The Daily Mail)

At 62, Nandan Nilekani has time and again proved his excellence in business decisions and timely innovations, not just for Infosys but the country as a whole. The Unique Identification Authority of India (UIDAI), widely known as Aadhaar, was his brainchild. Although Mr. Nilekani decided to step down as the CEO in April 2007, he went on to spearhead the Aadhaar initiative on the UPA Govt.’s invite in 2009.

(2007-2011): An Era of Multifold Manpower of Infosys

Kris Gopalakrishnan quotes
(Photo Credit: Twitter.com)

The year 2007 recorded quarterly revenue of over $1 billion as the latter half of the financial year saw Kris Gopalakrishnan, one of the seven founders of the company, succeed as the top executive. Under Gopalakrishnan’s leadership, Infosys crossed the $4 billion revenue mark and has been growing further since. By 2009, the employee base was approximately doubled up at a whopping 1,00,000.

Accordingly, Nilekani stepped down as Infosys CEO, only to be soon designated as the Chairman of UIDAI by the then UPA Govt. in 2009. Undoubtedly, the introduction and execution of Aadhaar for a 125 billion population is one of the highest benchmarks for any corporate honcho across the globe.

(2011-2014): The Harbinger of Strategic Developments at Infosys

S.D. Shibulal, CEO (2011-14)
(Photo Credits: Business Today)

Owing to the company’s traditional management approach, 2011 saw yet another co-founder turned CEO in S.D. Shibulal., who was also the Managing Director back then. This year also saw Narayan Murthy’s retirement as the Chairman as he handed over his office to K.V. Kamath, one of the few non-founder members of the top management at Infosys. The following year witnessed an unmatchable achievement on the company’s part as it found it’s placed in Forbes’s World’s Most Innovative Companies. Another feather in the IT giant’s hat was it’s listing on the New York Stock Exchange, that happened the same year.

It was under Mr. Shibulal’s leadership that Infosys Edge (an IP-based business platform focused on multiplying business value for the clients) won the prestigious Business Innovation Award by NASSCOM in the year 2013. The National Association of Software and Services Companies or NASSCOM is the apex body of the $154 billion IT Business Process Management industry.

Edge Explained
(Photo Credit: Infosys.com)

It was during this period that the term Infosys 1.0 and Infosys 2.0 were coined by the CEO, which referred to the first and second 12 years of the company respectively. Shibulal is majorly known for his expertise in strategic partnerships and client acquisitions which form the backbone of any major business entity across the globe. In April 2014, the then MD and CEO, Infosys was in talks with the board regarding his exit from the latter, which was declared officially on June 12, 2014.

(2014-17): The Beginning of an Innovative India through Infosys

The Sikka Impact
(Photo Credit: The Hindu Business Line)

The exit of Shibulal witnessed a noteworthy reshuffle at the Infosys’ top level management with the company hiring its first non-founder MD and CEO, Dr.Vishal Sikka.  Now 50, Sikka is a Ph.D. alumnus from Stanford, USA. Under Sikka, the company grew its revenues to an exhilarating INR 50,000 crores plus, during the financial year 2014-15. The year 2015 was of strategic importance to the IT major due to its new acquisitions on the block. California-based e-commerce technology platform Skava, Israel-based software service company, Panaya Inc. and Noah Consulting, a leading provider of advanced information management consulting in Texas, USA were taken over by Infosys as a part of Infosys’ major expansion goals.

As part of Sikka’s undisputed ascendancy, Infosys began its journey towards molding and backing Indian start-ups which are unquestionably what India. socioeconomic realm yearns for. The first step towards this was the $250 million ‘Innovate in India Fund’ announced by Infosys in the year 2015.

Being the first-ever non-founder CEO at Infosys, Sikka was hired to be compensated at $13 million with ESOPs worth $9 million, annually.

How much did Sikka make?
(Photo Credit: Gadgetsnow)

Moving ahead, Sikka’s compensation became one of the key reasons that have reportedly not gone down well with the founder turned lifetime mentor of the company.

Going by the reports from trusted sources, Sikka’s management style and the hefty compensation offered to him were the key issues leading to his untimely resignation in August’17. Meanwhile, Mr. U.B. Pravin Rao has been appointed as the interim MD and CEO, Infosys till the time Nilekani succeeds in his pursuit of finding the right fit as Sikka’s replacement.

Sikka Resigns
(Photo Credit: Business World)

Owing to the current hullabaloo at the Infosys’ top management, the company’s Board of Directors and the major stakeholders have insisted on bringing back the ‘ultimate game changer’, Nandan Nilekani as the Non-Executive Chairman.

Nilekani's Second Inning
(Photo Credit: The Economic Times)

“I am really happy to be back at Infosys and hoping to spend the next few months or as long as I’ll be here to contribute to the future of Infosys,”

     -Nandan Nilekani

                                                                                                                                                                           (Inputs by Gehna Kundra)

Liked the article, review or interview? Then please Share and Comment to express your views on it. We’re the Corruption Crusader! So kindly Subscribe and Join us in our initiative.

Support Us

All the Names, Images and Trademarks are registered property of their respective owners.

Creative Commons License
RTIwala | Empowering the masses… by RTIwala Team is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Based on a work at rtiwala.com.
Permissions beyond the scope of this license may be available at contact-us/

Facebook Comments


What's your opinion on it?

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: