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Vishwanath Kulkarni

Bangalore , Dec. 5

THE similarities are uncanny. Technology giants Microsoft and Infosys are celebrating the Silver Jubilee of their incorporation this year.

The two companies were set up within a week of each other way back in 1981. The Redmond-based Microsoft Corporation was incorporated on June 25, and the Bangalore-based Infosys Technologies Ltd was established on July 2.

Both MS, which dominates the global software products arena, and the home-grown Infy, an emerging leader in the services space, have demonstrated that entrepreneurship can cross borders and economies.

It only seems natural that their leaders — the Microsoft Chairman and Chief Software Architect, Mr Bill Gates, and the Infosys Chairman and Chief Mentor, Mr N.R. Narayana Murthy — are coming together on Wednesday at an event organised by The Indus Entrepreneurs (TiE) in New Delhi.

Both Mr Gates and Mr Murthy will voice their thoughts on entrepreneurship and provide insights relating to the early beginnings of their respective companies. The IT stalwarts will also share their vision on going forward.

Despite being in the same industry, the IT Czars pursued business models with divergent results. Originally founded in 1975, MS stayed focussed on the products space and made it to the 46th position, among the Fortune 500 companies this year. At present, its revenues stand at about $40 billion with net earnings of $12 billion (as of June 30, 2005).

MS follows a royalty-based licensing revenue model. Infy follows the software services model, wherein revenues are project-based and billed on per-person per hour. This could be one of the reasons why it took some 23 years to get into the billion-dollar revenue league. Infy is on the verge of crossing the $2-billion revenue mark in the current fiscal.

However, revenue per share for both companies are almost comparable with a marginal difference. For MS, revenues per share stood at $3.73, while for Infy it was $3.23. MS's market capitalisation is close to $300 billion, while that of Infy is at $40 billion, which is equivalent to MS' last year's revenues.

Moreover, the future earnings prospect of Infy also appears to be far more optimistic than Microsoft. This is evident from earnings discounting. Infy's earning discounting (number of times the market price discounts the earnings) manifested by price earning ratio is 88 times. In the case of MS, it is 24 times.

While MS had some 63,564 employees as on September 30, 2005, Infy's headcount is expected to cross the 50,000-mark this quarter. Compared to MS, Infy is relatively younger with the average age of employees around 26 years versus 36 years of the product-giant.

Though the two companies share certain similarities, the two founders pose some striking contrasts.

While, Mr Gates went on to become one of the richest men in the world, Mr Murthy, who could have joined the billionaire club, perhaps, chose not to.

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