1. *Infosys wasn't N.R. Narayana murthy's first entrepreneurial venture*.
That would have to be a company called *Softronics*, an IT consulting firm
that Murthy founded in Pune in 1976. He wound it up (when he realised that
focusing on the domestic market wouldn't take the firm anywhere) and signed
up to head Patni's software business.
2. *Murthy is employee # 4*, not employee number # 1 at Infosys. Although he
resigned on December 29, 1980, the day he decided to start Infosys, Murthy
did not join Infosys, which was incorporated on July 2, 1981, until 18,
March 1982. He had promised Ashok Patni that he would complete two projects
and it took him that long to do that. "I must have served the longest notice
period in the history of corporate India," laughs Murthy. P.S: N.S. Raghavan
was employee # 1
P.P.S: Infosys doesn't repeat employee numbers; today, the number for fresh
employees in the software business is well into the 60,000s.
3. Nandan Nilekani decided to become an entrepreneur a few days before his
marriage. Nilekani was to get married in the first week of January, 1981. In
late December 1980, when Murthy and Raghavan told him of their plan to quit
and start a company he cast in his lot with them.
4. *Infosys has seven founders, not six*. The names of the six are well
known: apart from the three mentioned above, S. 'Kris' Gopalakrishnan, S.D.
Shibulal, and K. Dinesh. The seventh was Ashok Arora. However, he left in
1989, in what would later become the company's first major 'point of
inflection'.
5. *Infosys didn't have a computer in its first two years of existence*.
Even as the company waited for permission to import a computer it started
operations as a body shopper in the true sense of the word. The computer
came later, and the global delivery model much later, although, documents
show that the company had started speaking of this trend as way back as in
1993.
6. Murthy was (and could well be) one of the best software engineers ever
produced by India. At least two of Infosys' early recruits-both have left
the company now; one runs a software products firm, and the other is a
consultant- speak highly of Murthy's technical capabilities, something that
is all but forgotten today by most people. "As long as computers continue to
be based on the Von Neumann architecture," says D.N. Prahlad, Founder and
Managing Director, Surya Software Systems, and a former Infosys employee (he
left in mid-1998 when he was heading one of the company's business units),
"Murthy will probably be on top of systems and software."
7. *Sharad Hegde was Infosys' first non-founder employee*. A former Patni
employee, Hegde was Infosys' tech-guru in its early years. He left the
company only in the early 2000s and is currently working on setting up a
golf resort near Bangalore. His wife, Anu, who left the company in the early
1990s, was an expert in quality and processes. The two met in Infosys and
were Infosys' first 'office romance'.
8. Infosys' early recipe for success would now be considered a radical
innovation in the software industry: zero-defect code. Murthy, one early
employee recalls, was obsessed with zero-defect code. Even today, the
accepted way to code is to write software, then debug it. Murthy would have
none of that. In the company's early years, Murthy and Dinesh and Shibulal
and Kris taught recruits how to write code without errors.
9. One of Infosys' early go-to-market vehicles was a joint venture with ksa,
ksa-Infosys. And Kris, who spent much of the 1980s in the US, was Infosys'
face in the jv. The joint venture collapsed in 1989.
10. *Infosys almost wound up in 1989*. "Our peers had cars and houses,"
recalls Kris referring to one reason for what he calls "a major
introspection" that happened in 1989. "And we had nothing." "The JV with KSA
collapsed in that year," remembers Dinesh. Arora, too, decided to leave that
year. Murthy asked his co-founders whether they wanted out. They did. He
offered to buy them out. "At which point," says Dinesh, we said, 'We thought
you wanted out too'." They decided to stick it out.
11. Most people attribute Infosys' success to its superior planning process.
Well, this started in 1989. "It wasn't anywhere near as sophisticated as
what we do now," says Nandan, "but it started then." The first plan gave the
founders who had just come off a gut-wrenching discussion on whether to wind
up or not, several immediate objectives. The first was the decision to build
a campus (… "and spend more on it than our turnover then," says Murthy). The
second was the decision to make an initial public offering.
12. Manmohan Singh facilitated Infosys' IPO. Infosys wanted to issue its
shares at a premium. Until the early 1990s, issue-pricing was decided by the
Controller of Capital Issues. The CCI decided that Infosys could make an
issue at a premium of Re 1 (issue price: Rs 11). The company demurred. Then,
Singh abolished the post of CCI in the first wave of economic reforms and
Infosys went ahead with an issue (in February 1993) at a premium of Rs 86
(issue price: Rs 96).
13. The market may love Infosys today, but most brokers thought the company
was just another fly-by-night operator in the 1990s. A consultant involved
in the IPO remembers that when he spoke to a few brokers in Mumbai about the
issue, the unanimous response was that since an unknown company was trying
to make an IPO at a premium "its promoters were certain to be thieves." "I
knew things had changed when a few months after the issue, one of those same
brokers called me up and asked whether I could arrange a meeting for him
with the promoters."
14. Infosys' promoters are rich today because of a decision they took early
in the company's existence. "We decided that we would pay dividends from day
one, pay taxes on the dividend we received, and re-invest the entire sum as
equity in the business," says Murthy.
15. The Infosys IPO almost devolved. Murthy claims that the issue was
subscribed 1.06 times, and it was, but fact is, it almost didn't go through.
Eventually Vallabh Bhansali's Enam Financial Consultants, the lead manager
(along with SBI Capital Markets), had to push it through.
16. Nilekani's quiz-club members struck it rich. Well, some of them did.
Nilekani was a quizzer in college and was part of an informal group that
would meet and quiz in Bangalore. One member remembers that Nilekani came to
a meeting with a battered attache case, pulled out some IPO forms, and tried
to interest them in the offering. "I did invest in Infosys," says the man,
"and never had cause to regret it." Nilekani also remembers visiting some of
his IIT batchmates working in Mumbai "with the same battered attache case"
and trying to interest them in some shares.
17. If there's a photographic history of the early years of Infosys,
Shibulal is the man to thank for that. "I was always interested in
photography," says Shibulal, Director and Head, Worldwide Customer Sales &
Delivery, "and in collecting photographs." For some time in the 1990s,
Shibu, as he is known within the company, left Infosys to work for Sun
Microsystems in the US. The official version is that he did that to acquire
some perspective on how a large technology company works and that it was
always clear that he would return to Infosys.
18. Nilekani may be CEO today and Kris coo, but the latter was actually
senior to the former at one point in time. Nilekani, most Infoscions and
Exfoscions agree, was always the big-picture man at the company. "It was
Kris himself who suggested in the 1990s that Nandan could be given a larger
role and that he wouldn't have a problem with it," says Murthy.
19. The real reason for the GE-business falling through in 1994: Murthy
wanted the Indian software industry to stick to its guns; it didn't. In
1994, Infosys said it would no longer be doing work for GE, thereby closing
the door on a business that then accounted for almost a third of its
revenues. The reason had to do with GE's decision to ask for a reduction in
billing rates. Murthy met with the heads of the other major Indian software
firms then working for GE and suggested that if they all refused to work on
the lower rate, the company would have no option but to give them a fair
deal. The CEO of one company didn't agree and Infosys ended up being the
only company to opt out of doing business for GE.
20. Infosys has reason to remember Nordstrom fondly: the retailer agreed to
what was then a record billing-rate. The first major customer Infosys signed
on after refusing the GE business was Nordstrom, and at a far higher
billing-rate. Not surprisingly, one of Nordstrom's senior executives was a
honoured guest when Infosys showcased its Electronics City campus to the
world in 1994. One individual present on the occasion remembers that the CEO
of a large rival software firm based in Bangalore and his deputy were keen
to meet with the man, but that Phaneesh Murthy, the man who had signed the
deal for Infosys, kept them at bay.
21. Mohandas Pai works for Infosys because he asked difficult questions at a
shareholder meeting. Give me any annual report and I can analyse it
threadbare in minutes," says Pai, who, at the time he posed the questions,
was working at Prakash Leasing, Bangalore. Murthy and Nilekani decided that
Pai would be a good resource; he signed on as a consultant initially. P.S:
Pai has been reading annual reports since the age of 15.
22. Most people in Infosys saw Phaneesh as Murthy's successor in the late
1990s and the early 2000s. Murthy, most Infoscions (as employees are known;
former employees are called Exfoscions) admit, was inordinately fond of Pai
and Phaneesh simply because he thought their performance extraordinary.
Given Phaneesh's age (he is now 44) and his profile (he was head of sales
and was responsible for helping the company grow from a $10 million one to a
$700 million one between 1992 and 2002) most people within the company saw
him as Murthy's successor. Then, the sexual harassment suit (circa 2002,
when a former Infosys employee in the us, Reka Maximovitch, alleged that she
had been harassed by Phaneesh) happened, and Phaneesh had to leave the
company.
23. Infosys picked Nations Banc Montgomery Securities as lead manager for
its 1999 NASDAQ listing because … The firm, one individual in the know
claims, was the only one of around 10 i-banks that pitched for the business
to acknowledge that the company's services-play was a good thing. All the
others harped on the importance of products.
24. Surprise: Infosys itself thought it would have to necessarily have a
product play. For much of the 1990s Infosys projected that between 30 per
cent and 40 per cent of its revenues would come from products.
25. The NASDAQ issue almost didn't happen. Everyone was working hard in the
run-up to Infosys' IPO on nasdaq and two departments (one of which was Pai's
finance
to call off the issue if it meant this would be the impact of growth and
success on the company's culture. Pai admits that "… around the time of the
IPO, there was an event where Murthy had to choose between me and the
company and he chose the company."
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