Steering questions

Investors will be watching keenly to see how Sikka uses the ₹30,000 crore (about $5 billion) on Infosys’ books.

Ravi Menon, IT Analyst with Centrum Broking, expects some small acquisitions, especially small product firms that can help boost the company in areas such as analytics, or firms that can provide very specific differentiation, such as a risk management consultancy for capital markets.

But Sikka needs to keep these acquisitions separate instead of merging them with Infosys. “Culturally,” a senior executive with Infosys says, “product and services’ companies are different and need to be handled with care.”

Others believe that apart from the cultural shift, the company under Sikka will look at inorganic growth in areas such as social mobile analytics and the cloud.

“There will be more tie-ups with Silicon Valley firms, considering Sikka’s background,” says Kris Lakshmikanth, CEO of Head Hunters India.

Then there is the much-talked-about products strategy that Sikka will bring to the table, considering his success with SAP’s HANA data processing software.

Products Platforms and Solutions contributed 5.2 per cent of Infosys’ revenue in fiscal year 2014, marginally less than the 5.7 per cent in fiscal year 2013.

Sikka, however, believes that the game has changed and the distinction between software products and services has blurred. “Large machines are delivered as services and I think that in some of the recent breakthrough innovations, software is coming into parts of businesses where it was never before and this is unprecedented,” he said at the press conference held to announce his nomination as CEO.

Industry watchers will appreciate this. Peter Schumacher, CEO of Value Leadership Group, sums it up by saying that to get back on track, Sikka will need to push himself and the company to critically examine its fundamental assumptions. Understanding these core assumptions will help him determine the magnitude of change that will be required and how fast it must be performed.