Infosys CEO fires warning to western rivals
Published:26-September-2005
By BR staff writer
Indian IT services providers will replace their western rivals as leaders of the industry, according to Nandan Nilekani, CEO of Infosys.
Nilekani, in bullish mood following the win of its largest contract to date - an application development deal with the financial services company ABN AMRO - claimed: "The industry is in a state of flux, after the dust has settled there will be a new set of leaders in the IT industry."
"We are a disruptive force in the industry, like what Dell is doing with computers," he said. "Global [IT services] companies will find it harder to compete, their revenue will be reduced as they are forced to charge less as they send work offshore, and they will have to cut SG&A and will face many other challenges. Customer pressure has pushed them into using the offshore model, and they have to redesign their business model to look like us."
Nilekani said that the current trend towards signing multiple vendors in major outsourcing deals rather than handing it all over to just one is playing to Infosys' strength as it makes for more digestible deals.
"There was a tendency to 'total outsourcing', but customers are beginning to realize that this is not a smart way of doing things. It leads to an abdication of responsibility and one company cannot do everything. The best of breed strategy decreases customer risk and allows strategic direction to be maintained," he said.
