Infosys: The Pinnacle Of India's IT Efforts
Infosys Technologies is an Indian multinational gigantic software company that changed the way the world looks at India.
India's information technology glory days started in the early 1990s, but now, the country is in the same bracket as technology giants such as the US, Japan, and China.
Infosys wasn't just a rider on the technology start-up train, but a pioneer in the field of software companies in India. With a market capitalization of over $47 billion in 2020, it serves as an inspiration to millions aspiring software developers - anything is possible if you're determined and work extremely hard to achieve that!
This is the story of how seven Indian engineers with no business background, led by Narayana Murthy, built Infosys from scratch to become one of the leading IT companies in the world!
The Inspiration Behind Infosys
Infosys was founded by seven engineers, but the brain behind it was Narayana Murthy.
Born in 1946 in Karnataka, India, he had seven siblings and was raised into a conservative Brahmin family. Although they were a middle-class family, to humble his child, Narayana's father always made the boy clean the lavatory before bed. This matters because at that time, there was a tradition in India that only the lowest class of people cleaned the toilets - and his father believed that to be wrong. Now a billionaire, Narayana claims that he still cleans the lavatory when he gets home, and he believes this approach may have been the key to his company's success!
He graduated from the National Institute of Engineering in 1967 and got his master's from the Indian Institute of Technology Kanpur - a premier engineering institute in India.
Following his graduation, Narayana served at the IIM college in Ahmedabad as a chief systems programmer and worked on India's first computer system.
While growing up, Narayana was a strong leftist and firmly against capitalism. But after a 'seminal experience' in Bulgaria in his 20s, where he was detained by the authorities for 3 days over nothing, he changed his mind. It was then when he realized that the only way for countries like India to solve the problem of poverty is by entrepreneurship.
During the mid-1970s, he started his first own company named Softronics, but it was short-lived, so he moved to Pune, India, and joined Patni Computer Systems.
Narayana was already a senior engineer, so he was given a team of six young soon-graduated engineers, eager to implement their skills and take a bite of the corporate world.
Founding An IT Company In India In The 1980s
Computer software and IT technology were rather new at the time, and very few companies offered custom software for large corporations. The world was shifting toward digitalization and the seven of them would often sit in Narayana's apartment and discuss the idea of launching a company that would develop custom software for large corporations.
Although the meetings were casual, the guys were serious, and they founded Infosys on July 2, 1981 in the home of one of the co-founders. Besides Narayana, the other co-founders of Infosys are N. S. Raghavan, N. Nilekani, S. Gopalakrishnan, S. D. Shibulal, K. Dinesh, and A. Arora.
The team named the company 'Infosys Consultants Private Ltd', and the first office was at Narayana's home at Pune. The initial investment came from none-other than Narayana's wife, Sudha Murthy. Although it was just $250 (₹10.000), it was enough for the engineers to fire up the company and start looking for potential customers. One of their decisions turned out to be a game-changer for the company's future: instead of choosing India as their customer base, they aimed for the entire world!
In the beginning, all of the co-founders traveled to the US to hunt down customers, while Narayana stayed in India to represent the company. Luckily, they managed to find their first client just before they ran out of their initial $250 investment - a New York-based company.
When the first deal landed, it was time to write some code lines. However, running an IT company from India in 1981 was challenging, due to the lack of relevant infrastructure and the extremely unfriendly business environment. Getting the basic technology needed to run a startup was a real battle.
It took Infosys nearly a year to get a telephone connection so they could communicate with their overseas clients, and three years just to get a license for an imported computer. Nevertheless, the guys managed to land a few deals with clients, and after four years, the company was finally self-sustainable.
This meant only one thing - it was time to move from the home office in Pune.
Failed Venture Joint With An American Company Broke Infosys To Pieces
In 1983, the Infosys guys moved their office to Bangalore, where they finally received their first computer. Although they had a few clients under their belt, money was tight, so they had to stay in cheap motels and travel by bus.
Two years later, Infosys had the first joint venture with a US-based consulting company Kurt Salmon. They named the venture KSI, and Gopalakrishnan moved to the US to represent Infosys. Although it was a risky move, the joint venture proved to be a success, and Infosys opened the doors to its first international office in Boston in 1987. The company had made a name for itself and was developing customized software for big American companies.
Following the implementation of several restrictions on foreign trade imposed by the US government, the joint venture collapsed in 1989 and it shattered Infosys into pieces.
The guys were on the verge of shutting down the business. After 8 years of trying to bring up a company, they had nothing, and the disappointment hit them like a truck.
Not every member of the group could sustain such pressure, and A. Arora decided to quit.
However, Narayana wasn't thinking of quitting at all!
Infosys Weathered The Storm And Rose From The Ashes
A leader's true colors are revealed when times are tough - and times were certainly tough for Infosys. All of the remaining group members were scared for their future, so Narayana gave them a speech that would change their lives forever. He told them that if they want to leave, they can, but he's going to stick with it and either make it or die trying. The encouragement words resonated with the co-founders and they all decided to stay.
The turning point for Infosys came in 1991 when the wave of economic liberalization hit India and the country opened its policies for foreign direct investments. This meant that Infosys' founders finally got the green light for importing electronics, getting consultants to India and travelling without special permission.
The company offered its initial public offering in 1993 with the price of ₹95 per share. The IPO was undersubscribed, but luck was on Narayana's side, and it was bailed by US investment bank Morgan Stanley, who bought 13% of the company's shares. Infosys offered another IPO in 1993 with the price of ₹145, and it made most of its initial investors millionaires.
Following the second successful IPO, Infosys never looked back.
It took big strides, and its growth was unprecedented!
Infosys From 1995 Until Today
Following the late-1980s and early-1990s crisis, it was smooth sailing for Infosys. In 1995, they opened their first office in the UK, followed by global development centers in Toronto, Canada, and Mangalore, India.
The corporate clients Infosys was working for included big names such as Visa, Boeing, and Reebok - talk about globalization!
The year 1999 marked an important milestone for Infosys - it was the first time the company made an annual revenue of over $100 million, and that number doubled in 2000. From 2000 onwards, Infosys led India's IT expansion and grew to a total of over 234,000 employees in more than 46 countries!
Narayana was the CEO, board chairman, and chief mentor of Infosys from its foundation in 1981 until his retirement in 2011.
However, he doesn't measure the success of his company by the figures and revenues it generates, but by the happiness it created - not only to its employees but to their families and beyond. Narayana, together with the six co-founders put India on the map of IT developed countries, proving the evergreen recipe for success - determination and hard work!