On July 2,1981, seven engineers working for Patni Computers, an Indian re-seller of US- based Data General machines, decided to start their own company. Thus Infosys Technologies was born. (One of them, Ashok Arora, left in 1989 to join a US-based software company.) The six remaining engineers, all from middle-class backgrounds in India, had relatively little experience but desired to succeed in what they did and make something of their lives. The total capital the founders scraped together was just Rs.10,000.
From its start in 1981, Infosys relied on overseas business, giving it a global perspective that many other Indian companies lacked. Murthy stayed in India and tried to generate business and manage the corporate office and administrative issues, while the other founders journeyed to the United States, staying for months at a time to perform on-site programming for corporate clients. They shared cheap apartments and did everything possible to keep their costs low. Among the takers for the company’s low-cost, high quality customized software solutions was sport-shoe maker Reebok International Ltd. . . Today, the company has over 100 diversified clients across IT markets in the United States and Europe (see Exhibit 4 for a list of key clients in each of the markets that Infosys serves.)
In 1982, the company hired its first employees – three young engineers from the Indian Institute of Technology, Chennai (formerly known as Madras.) “We had very little to offer our first employees and so attracting talent was extremely difficult,” Murthy recalls, “All I could promise them were tremendous opportunities to grow and learn and a work environment that would never be lacking challenge!” “They were really surprised when they showed up the first day for work and discovered that the office, which they all three shared with me, was a converted bedroom in my little apartment,” he now recalls. Infosys trained each of its early employees at its offices in India and then dispatched them to work at client sites in the States.
Gradually, the company’s revenues started increasing, allowing it to invest in resources for training and product development. In those days, the Indian economy was closed to outside investment and the policy context was heavily bureaucratic. For a relatively simple task like importing a computer (no computers were manufactured domestically), a company both had to demonstrate that it was generating significant revenues in foreign exchange and apply for an import license. These licenses took many months to approve, and it was not uncommon for companies to maintain a staff of personnel to negotiate with government offices for approval of their licenses. Although all of its revenues came from foreign markets, Infosys had neither the capacity to incur the cost of purchasing and maintaining its own computer in India nor the space to house such a computer. Its solution to this dilemma was one that is characteristic of its founders’ ingenuity in making do with scarce resources. It purchased the computer and had it installed on the premises of a major customer in India. It then bartered its technical knowledge for computer time and at the same time used the computer to train new employees and develop products. Thus, it realized revenues and gained a valuable tool for training while addressing the costs of maintenance and storage.
The company transformed from a capital-starved operation offering on-site services to foreign customers into a provider of turnkey software development and maintenance. “On-site services were a step in confidence building with our customers. Most of them did not know of our capability and we had to make them feel comfortable with our model before moving our software development offshore to India. We also focused on acquiring domain knowledge in key vertica segments such as retail, distribution, finance, and telecommunication,” explains Murthy . By setting up software factories in India for its growing client base, Infosys could take advantage of lower costs and economies of scale, as well as implement processes and systems that would allow it to gain a strategic advantage for future customers
1. Infosys Technologies Ltd, was established 1981 by seven people with US$ 250. Today, Infosys is a global leader in the “next generation” of IT and consulting with revenues of over US$ 4.8 billion.
1. Infosys Technologies Ltd, was established 1981 by seven people with US$ 250. Today, Infosys is a global leader in the “next generation” of IT and consulting with revenues of over US$ 4.8 billion.
2. Its offerings span business and technology consulting, application services,Systems integration, product engineering, custom software development, maintenance, re engineering, IT infrastructure services and business process outsourcing.
3 Infosys has a global footprint with over 50 offices and development centers in India, China, Australia, the Czech Republic, Poland, the UK, Canada, and Japan. Infosys and its subsidiaries have 113,796 employees as on Marche 31, 2010.
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