Pravin Rao UB, the newly elevated President and member of the Board at Infosys, spoke to Business Line on the changing nature of software services delivery and continued opportunities in Europe.
Revenues from Europe have been steadily rising over the past 3-4 quarters. What is working for you there?
Europe has been growing for us since the last four quarters, albeit from a relatively small base. At the end of 2014 fiscal, Europe contributed 24.4 per cent to our revenues.
While Europe historically was not that open to outsourcing, the European economic crisis is opening up outsourcing avenues. In the past, majority of outsourcing was coming from English speaking countries but now even others are opening up to outsourcing, especially Continental Europe. In addition to that, we are seeing opportunities in Germany and France, which are starting to pick up.
There seems to be persistent slowdown in traction from North American geography. Why?
We do not see that as a secular trend. Frankly, the fourth quarter was a surprise and we did not expect it. The macroeconomic conditions also did not play to our advantage. For example, take the case of retail. The holiday season was a dampener of sorts as there was adverse weather condition and credit card frauds, which impacted some of our retail customers who had to fix those problems and hence stalled or pushed out some of the projects.
Business IT services have grown well during the quarter. But are discretionary spends not forthcoming?
Consulting and business IT services are growing as spending on technologies like cloud computing and mobile are picking up.
Then there are legacy modernisation projects (refers to the rewriting, conversion or porting of a mainframe system to a modern computer programming language that can be accessed from tablets or smartphones).
The telecom has looked up after a prolonged lull. Will that be a secular trend?
The telecom sector still continues to be under a lot of stress. Most of them are not doing well, especially the wireline ones.
Only the cable companies seem to be doing well. While this quarter has been good, a lot more needs to happen consistently to call it secular.
With a new management team has the mode of software delivery changed significantly within Infosys?
We have developed tools and platforms, virtual operations (trying to simplify complex global multi-party transactions by leveraging cloud computing and mobile technologies).
Also, we are constantly looking at ways to increase speed to market by constantly training employees in technologies such as Agile which can help them in improving their productivity.
While we were doing this in bits and pieces, now we are institutionalising these practices across the organisation.