‘Competitors will have an edge’

‘Recent senior departures from the firm will make it tougher to reassure clients’

Siddharth Pai

The turmoil at Infosys may turn out to be a blessing for its competitors, as clients could, over time, start seeking answers to some tough questions India’s second-largest software company. Siddharth Pai, a technology consultant who has advised clients across the industry on about $20 billion worth of IT deals. He has also been the chief negotiator for clients in some of the large deals that Infosys has won over the years. Excerpts from an interview:

How would the latest developments at Infosys influence decision-making with their existing clients?

Clients always consider corporate stability as a factor while making sourcing decisions. The current events will undoubtedly cause turmoil in the market in the short term, at least until the future path becomes clear. Interim CEO Pravin Rao has himself acknowledged as much

What would a large existing client's major ask be at this point in time?

Clarity on future path from a management perspective and for an end to board vs minority shareholder battles.

Would Infosys find it difficult to enter new clients due to the current situation? Would that be a deterrent for a new client to come in or for growing a moderately-sized client to a large one?

Yes. There will be difficulty since the events will have to be explained each time. Competition will not be hamstrung in this way and will have an edge.

What should the new CEO, as well as Sikka as Vice-chairman, do to assuage client fears?

Point to continued stability at operating and delivery management levels despite C level turmoil. There have been other senior departures recently so this will be tougher to pull off than if it were just Sikka leaving. Even so, making sure there are no hiccups on client delivery at the operating level is of paramount importance

Do you see competitors, including India heritage companies, making the most of this and sneaking into accounts where Infosys is entrenched?

Yes, without a doubt.

Would you know of any client that has exited from a relationship with Infosys in the last few months citing the current turmoil as being detrimental to their work?

No I am not aware of any edits tied specifically to the turmoil. However, client churn is normal in a market that is largely based on renegotiations and re-competes so the competitive pressure from 5 above will be intense.