The most successful start-up venture in the country, founded at a time when start-ups were largely unknown here, has just set foot into a new era. After being led for the last three decades and more of its existence by one or the other of its co-founders, the $8.25-billion Infosys has now been passed on to the hands of its first non-founder CEO who is also an outsider. The appointment of 47-year-old Vishal Sikka, former Chief Technology Officer of SAP Labs, as CEO-designate brings to an end a turbulent period in Infosys — once a stock market darling — ever since N.R. Narayana Murthy returned to helm the company last June. Mr. Murthy stepped in after the Board requested his return to steady the ship, but ironically, the fact of his return together with his son as executive assistant was seen as a retrograde move in terms of corporate governance. High-profile senior executives, some of them groomed over the years for the top job, headed straight for the exit as their career paths suddenly turned uncertain within the company. Infosys lost more than a dozen senior managers in the last one year alone. The fact that the search committee formed by the Board to identify the next CEO had to settle for an outsider to lead a company that was once known for its top-management bandwidth tells a story in itself.
Significant as this is, equally so is the fact that Mr. Murthy, Rohan Murthy and co-founder Kris Gopalakrishnan, currently the executive vice-chairman, are stepping down right away. This is pragmatic and prudent even as it dispelled doubts that were expressed over the rationale for Mr. Narayana Murthy’s return and over the nature of governance in the company. In a sense, Mr. Murthy has proved his critics wrong. With the seniors out, Dr. Sikka now gets a free hand to mould the company without having to keep looking behind his back. The exit of top-drawer talent over the last one year may have left Infosys poorer, but it can also be argued that it is an opportunity for Dr. Sikka to assemble a team of his choice. He will need a strong A-team to back him up, especially because he will be operating out of the U.S. That Dr. Sikka, a Stanford University computer science PhD, faces a stiff challenge will be stressing the obvious, but the fact is that Infosys — and indeed the entire IT industry in India — needs to recode its business model. The company needs to move on to the next level from simple IT services and systems management to software and product platforms in the era of newer technologies such as cloud computing. This is where Dr. Sikka’s educational and professional background will be of value. Watching him and his moves closely will be not only the founders of Infosys and its investors but also competitors who are grappling with similar issues.