SAP's former technology chief Vishal Sikka will head ailing Indian outsourcer Infosys, in a marked shift from his focus at his former company on technology and product development.
The appointment of Sikka marks the transition of Infosys from being run by one or the other of its founders to being headed by an external professional.
Sikka will be inducted as a whole-time director of the board and CEO and managing director designate on June 14 and will take over as CEO and MD from the incumbent S. D. Shibulal on Aug. 1, Infosys said Thursday.
Infosys, once the poster-boy of the Indian IT services boom, has been lagging behind its Indian competitors like Tata Consultancy Services. In June last year, the company's cofounder and first CEO N. R. Narayana Murthy returned to the company as executive chairman in a bid to revive the company.
In the last few months Infosys has, however, seen a number of its key executives quit. Its performance has also trailed that of some of its peers despite a revival in outsourcing.
An interesting part of Sikka's appointment is that Murthy will be quitting his post on June 14 and will continue on the board as non-executive chairman until October when he assumes what appears to be an honorific title of chairman emeritus, suggesting that unlike Shibulal, also a cofounder, Sikka will be firmly in control of the company.
Sikka, who oversaw SAP's product development, has championed HANA, the in-memory computing platform at the heart of SAP's development efforts. His product experience will likely be useful as Infosys tries to move from a business model based on the number of people deployed on client projects, popularly known as 'time and materials,' to developing technologies and products that can be reused across a number of clients.
In his new job, Sikka will continue to be based in the San Francisco Bay Area, an Infosys spokeswoman said. Analysts have been insisting that Infosys, which gets most of its revenue from North America, should have a CEO based in the U.S.
Infosys' revenue in the first quarter was US$2 billion, an increase of almost 8 percent over the same quarter last year, according to IFRS (International Financial Reporting Standards). Net profit grew by 9.7 percent to $487 million. Shibulal said that the quarter had been disappointing. The company faced a slow-down in market segments such as retail, and even cancellations in some business segments.
Customers now want more than 'out-of-the-box products,' and are looking for a combination of technology and services to help them meet their business objectives, which may have led Sikka to take the job, said Sudin Apte, CEO and research director at analyst firm Offshore Insights.
The challenges before Sikka at Infosys include reducing staff attrition, restoring confidence with clients, bringing stability to the organization which has seen many reshuffles and exits, and getting a strategic positioning with clients, Apte said. "Mere star value will not help," he said, referring to Sikka's high profile in the tech industry.