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In Vishal Sikka, Infosys gets innovator as CEO

Friday, 13 June 2014 - 6:30am IST | Place: BangaloreNew Delhi | Agency: dna

"Sikka means coin and Vishal means big. So Vishal Sikka implies big money. This is what we need for Infosys. He is the man who represents big money and intellectual competence," said N R Narayana Murthy while introducing the new CEO and MD designate, Vishal Sikka.

Sikka, a former member of executive board of SAP AG, is the first non-founder to head the company which relies on labour-intensive, low-margin contracts from Western clients. He starts from August 1.
Sikka, 47, is considered to be an innovator in the global software industry.

He is seen bringing into Infosys his expertise in newer technology areas, like cloud computing which allows clients to ditch bulky and costly servers for network-based software and storage in remote data centres.

The appointment coincides with Murthy and his remaining founding team, including current CEO S D Shibulal and executive vice chairman Kris Gopalakrishnan, calling it quits.

"The mandate given to me when I was brought back, that of finding an excellent CEO and creating a strong foundation for the future growth of Infosys, has been completed. Hence, it is appropriate to leave," said Murthy, whose son Rohan, brought in last year as executive assistant, would also leave.

The move is seen by industry experts as a 'clean-up drive' to revive the company's image and growth that had taken a beating of late.

According to Moorthy Uppaluri, CEO, Randstad India, though Sikka is the first non-founder professional CEO, the challenges will not be very different than what earlier management had faced.
Analysts feel the move of bringing in Sikka will boost Infosys's image.

"We believe that clarity in senior leadership will also improve confidence of employees, as well as investors. Vishal is young and has enough time to drive his strategy within the company," said an analyst from Religare Capital Market.

Some feel the new CEO should be given a free hand to run the company with no dual power centres.

"Narayana Murthy not continuing as the executive chairman basically gives the new CEO a free hand to run the company, instead of what could have been otherwise a dilutive/conflicting dual power arrangement," said Ashwin Mehta, analyst from Nomura.

Mehta also feels that Sikka's appointment raises the profile of Infosys in the eyes of clients, given Sikka's earlier position as a board member at SAP, and "brings the company at par with key competitors like Cognizant and TCS".

Partha Iyengar, country manager, research, Gartner India, said the new CEO will have to move very quickly to first calm the three key stakeholders, that is employees, customers and investors, in that order. "Infosys cannot afford any more resource departures especially at senior levels. He will next have to establish credibility with those stakeholders."

However, some believe that the move can lead to fresh round of attrition.

"Infosys has made an unorthodox choice with respect to the CEO which separates it from its peers. We see a possibility of fresh round of attrition at the senior management level," said Shashi Bhushan, senior research analyst, Institutional Equities, Prabhudas Liladher.

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