Bengaluru: Infosys Ltd has appointed Pervinder Johar as the new chief executive officer (CEO) of Edgeverve, its wholly owned products and platforms subsidiary, according to an executive familiar with the development, more than a year after the abrupt exit of previous boss Michael Reh.
Edgeverve brought 5.6% or $143 million of the company’s $2.5 billion revenue during the October-December quarter.
Johar was previously CEO of Steelwedge Software Inc., a US-based cloud-based supply-chain planning company, which last month merged with E2open, the largest purely cloud-based supply chain software company.
Johar, a graduate from Indian Institute of Technology (IIT) Roorkee, has also worked at Hewlett Packard Inc. and Fidelity Investments. An email sent to Infosys on Sunday seeking comment went unanswered.
Infosys expects its products and platforms business to bring in $2 billion out of its March 2021 target of $20 billion. For this reason, Johar faces an uphill task to revive the struggling business division and generate more business from monetizing platforms.
Over the past few years, homegrown technology companies’ traditional model of deploying an army of engineers to run every technology process has been getting commoditized. To counter this, companies like Infosys, its larger rival Tata Consultancy Services Ltd (TCS) and Wipro Ltd are focusing on building platforms.
TCS set up a new business unit called Digitate dedicated to its artificial-intelligence (AI) platform Ignio, and Wipro launched its Holmes platform. Since Vishal Sikka took over as the first non-founder CEO of Infosys in August 2014, the firm has launched three platforms, including Infosys Intelligent Platform, Infosys Automation Platform and, artificial intelligence platform Mana.
This was made possible after Sikka hired senior leaders, including two of his former SAP colleagues, Navin Budhiraja and Abdul Razack, and entrusted Razack with the responsibility of heading the platforms business.
Last year, Infosys hired Google executive Sudhir Jha to help it monetize Mana. Separately, Infosys also carved out its core banking software Finacle from its services business, and clubbed it with Edgeverve, as Sikka worked towards his strategy to sharpen focus on high-margin business of platforms.
Finally, the company has also brought in new solution offerings under Finacle, including offering blockchain-based solutions to banks. Still, Infosys continues to struggle to scale up business from its Edgeverve offerings.
It accounted for 4.6% or $102 million of company’s $2.21 billion in revenue during October-December 2014, and now accounts for 5.6% of company’s revenue. During the past 34 months, even though Infosys has managed to grow its quarterly revenue by 15%, a 40% growth in business from Edgeverve is not very assuring as its contribution continues to be tiny.
A bigger worry for Infosys is that over the past 15 months, three challenges—slow growth, a clutch of senior leadership departures and most recently, a tussle with the founders—have made many question CEO Sikka’s current strategy to engineer a turnaround at the Bengaluru-based company.
Infosys, which ended with $9.5 billion in revenue last year, expects an at-best 7.6% in dollar revenue growth in the current financial year ending 31 March, slower than the 9.1% growth recorded in 2015-16. This is mainly on account of poor execution, a challenge further exacerbated by the churn in senior leadership.
Eight executive vice-presidents, or EVPs, the second highest designation after CEO and chief operating officer, have quit under Sikka’s watch.
Finally, last month, some of the founders, led by N.R. Narayana Murthy, citing corporate governance lapses, lambasted Infosys’s board and even suggested that non-executive chairman R. Seshasayee consider stepping down, before the two sides seemed to settle their differences.