Mumbai: There was much fuss over the appointment of a new chief executive officer (CEO) for Infosys Ltd in the media ever since the company said it was searching for a new chief in April, prompting the management to even threaten to sue three newspapers over their “speculative” reports that allegedly sullied its image. So, it came as a big relief when India’s second largest IT services provider announced on Thursday that former SAP AG global product head Vishal Sikka will take over from incumbent S.D. Shibulal as CEO and MD on 1 August.
Media excitement over the new CEO was not unwarranted, however much the Infosys management would want us to think otherwise, because it is a unique company in many ways that merit attention.
For one, Sikka is the company’s first non-founder chief executive, elected 33 years after Infosys (then Infosys Technologies Ltd) was founded in 1981 by seven engineers who moved from Patni Computer Systems. Chief among them was N.R. Narayana Murthy (a professional then), who was hired by Narendra Patni—one of the pioneers of the Indian IT outsourcing industry and founder of Patni Computer, who died unsung on 6 June. Patni Computer itself which was acquired by iGate in 2011.
Second, till a little over two years ago, Infosys was the darling of most analysts and the media. It was hailed as the bellwether of the Indian IT industry—ironically, by many of these very journalists who were the ones to get the defamation notices. It was the scorching pace of growth of Cognizant Technology Solutions Corp., which finally overtook Infosys, that made analysts and journalists sit up and take notice of the new bellwether. This, even as Tata Consultancy Services Ltd continues to remain the leader by far in the Indian IT industry.
Third, when the growth of Infosys was slowing, it was but natural to put the blame on lack of leadership from Shibulal who was heading the company. There was clamour for the return of Narayana Murthy—who was Infosys’ CEO from 1981 to 2002—to restore the company to its former glory, especially since Nandan Nilekani, the other co-founder, was then leading India’s Aadhaar unique identity project. Nilekani later joined the Congress party and contested unsuccessfully from Bangalore South Lok Sabha seat.
Many expected a quick turnaround when Narayana Murthy, then chairman-emeritus, took an active role as additional director and executive chairman of the Infosys board on 1 June, 2013. Murthy, though, repeatedly cautioned that he would require time to restore the company’s growth. Over the last one year, however, there were almost 10 high-profile exits, including that of B.G. Srinivas, who was seen by many as the “probable” CEO. These, coupled with the earlier high-profile exits of former CFOs Mohandas Pai and V. Balakrishnan, affected the morale of employees, leading to higher attrition rates.
Fourth, Murthy brought in his son Rohan Murty as executive assistant, fuelling further speculation that a “successor” was being groomed, though Narayana Murthy rubbished rumours of any such plan.
In the light of these developments, the Infosys management has sent the right signals by ensuring that Sikka gets a free hand, and be ably assisted by Pravin Rao as chief operating officer.
To begin with, Narayana Murthy and S. Gopalakrishnan, executive vice-chairman, will both step down from their posts on 14 June. They will continue on the board till 10 October as non-executive chairman and non-executive vice-chairman, respectively, “to ensure a smooth transition”. K.V. Kamath will become the non-executive chairman on 11 October, and Murthy will be designated chairman-emeritus with effect from 11 October.
Shibulal will step down as CEO and MD, and from the board on 31 July.
After his appointment, Vishal Sikka @vsikka, tweeted: “Humbled to lead @Infosys an iconic pioneer in IT. Looking fwd to learn & work w/ infoscions & global clients on breakthrough innovation.”
Work for this Ph.D. in computer science from Stanford University has been cut out for him, even as his moves will be closely watched by analysts and journalists alike.