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Sensor technologies to be the new growth driver for Infosys

Sensor technologies to be the new growth driver for Infosys
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First Published: Tue, Nov 30 2010. 11 56 PM IST
Updated: Tue, Nov 30 2010. 11 56 PM IST
Bangalore: The new, new thing, Infosys Technologies Ltd believes, is sensor technologies, and it, along with cloud computing and the mobile Internet will drive growth in its business.
The as-we-know-them IT services are “going down in price”, says S. Gopalakrishnan, chief executive officer and managing director of Infosys.
Sensor technologies integrated with IT networks, cloud computing, and the mobile Internet “will drive investment, and change how companies automate business processes in the future”, he adds.
Sensor technologies essentially relates to the use of sensors to measure and react to events as they happen.
Cloud computing refers to the use of software over the Internet and the storage of information in a virtual “cloud”.
Integrated sensor technologies can recognize a customer walking into a store and offer her new products and customized discounts based on her previous buying behaviour.
Such technologies form an “Internet of things”, says Gopalakrishnan, adding that these would be used in everything from healthcare and retail to smarter buildings and utilities.
“All this is already happening. GPS (global positioning system) services, for example, can sense volume of traffic ahead and reroute you. Sensors placed or embedded in the body can monitor sugar and blood pressure and alert the doctor automatically,” he says.
Gopalakrishnan expects the use of such technology to grow exponentially. “We are just creating point applications, just getting started. There is no reason why this cannot be a global phenomenon where everything is interconnected.”
Industry studies, he says, show the potential market is worth billions of dollars. “We don’t need to capture the market—just a small percentage to start with will make a significant difference,” he adds.
Some of these technologies are already being used in Infosys offices. “Motion sensors in a room, for example, can turn off the lights when there is nobody there,” adds Gopalakrishnan.
Pradeep Udhas, head of IT sector advisory at audit and consulting firm KPMG, says sensor technologies do have a potentially large market.
“Apart from commercial applications, the scope in government and security is also huge. It will be a new play for Infosys. But they should go beyond solutions and integration by investing in applied research. They will have competition from places like China, with their experience in electronics, as these services are not very language dependent,” Udhas adds.
Gopalakrishnan says the diversification will also help Infosys reach new clients.
“Eighty per cent of Infosys’ business comes from 100 clients, with 95% being repeat business. We have to expand that. Any industry must continuously increase the value addition,” he says. The company is targeting one-third of its revenue to come from consulting, one-third from traditional applications development and maintenance, and one-third from products and services that involve the creation of intellectual property (IP).
Currently, 25% is from consulting clubbed with package implementation, with the bulk encompassing traditional IT services. IP driven work is a very small portion.
Infosys earns 65% of its revenue from North America, 22% from Europe and the rest from other parts of the world.
“We want to get a 40:40:20 mix geographically,” says Gopalakrishnan.
sridhar.c@livemint.com
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First Published: Tue, Nov 30 2010. 11 56 PM IST