Narayana Murthy and Infosys

The Strategist Contd...

Analysts felt that unlike elsewhere, India's sharpest minds were heading for a career in software, and the best of these aspired to be at Infosys. Infosys also competed with consultancies as Anderson Consulting and Ernst & Young, which positioned themselves as information management specialists. In 1994, the joint venture with KSA was dissolved. In 1995, Narayana Murthy created Yantra Corp.⁸ in Acton, Mass. US. Around the same time, Infosys entered into a joint venture with Satyam Computers⁹ and DCM.¹⁰ During 1998-99, Narayana Murthy planned to position Infosys as a true global company – global clients, global operations, global staff and a global brand image. In 1998, to support his global ambition, Narayana Murthy listed the shares of Infosys on Nasdaq through American Depository Receipts (ADR) issue worth US$75 million.

With this, he took the Indian software industry global. Narayana Murthy's global strategy comprised three features. The first one was the "global delivery model." The model emphasized on "producing where it is most cost effective to produce and selling where it is most profitable to sell."

Cost effective production meant doing as much of the software development work in India and profitable selling meant focusing almost exclusively on foreign markets, particularly the US.

The second feature of the strategy was "moving up the value chain" – which meant getting involved in a software development project at the earliest stage of its life cycle¹¹.

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8] Yantra helps companies to unlock value from multi-enterprise trading networks. Yantra solutions enable companies to sell complementary products and services, reduce inventory, coordinate outsourcing partners etc.

9] Satyam Computer Services Ltd., based in Hyderabad (Andhra Pradesh), is an end-to-end IT solutions provider and offers a range of expertise aimed at helping customers re-engineer and re-invent their businesses.

10] DCM provides design services in the areas of ASIC & FPGA, Communication Software and Web Applications.

11] A typical software development project's life cycle comprised designing, coding, conversion and maintenance.

Case Details

Case Code : LDEN003
Themes: Corporate Social Responsibility, Great Leaders
Case Length : 8 Pages
Period : 1981-2001
Organization : Infosys
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Software

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