Infosys’ new CEO hire marks shift to higher margin software products

vishal-sikkaIn conjunction with a rekindling of rumors that celebrated Cisco boss John Chambers may soon step down, Infosys has named Dr. Vishal Sikka as its first outside chief executive. The historic appointment comes just over a month after the veteran technology and business leader departed SAP, where he spearheaded the development of the HANA in-memory analytical database that now underpins its cloud portfolio.

Sikka’s induction as the CEO of the Bangalore-based IT outsourcing giant marks the culmination of a long career split between research and management. After earning his doctorate degree in computer science from Stanford University in the late 1990s, Sikka joined Xerox as a researcher in its Palo Alto lab, where he focused on applying existing database technologies in then-emerging web use cases such as e-commerce.

“Vishal has been a big for in the web services trend in the early 2000s which set the stage for what [Wikibon chief analyst] Dave Vellante calls the ‘API Economy.’  All the efforts in those early days set the stage for cloud computing and DevOps,” notes SiliconANGLE founder John Furrier.  Sikka eventually moved on to found a software shop called iBrain and later another, Bodha, which was acquired by Peregrine.

Sikka ended up joining the company as vice president for platform technologies following the deal in a decision that set him on the corporate leadership track in the IT industry’s big leagues. A few years later, he hopped over to SAP, and the rest is history.  With the backing of the German business intelligence’s influential co-founder, Hasso Plattner,  Sikka quickly moved up the corporate ladder to become CTO, a position in which he almost single-handedly refocused SAP’s long-term product strategy on cloud computing and mobility.

Sikka’s central role in driving the firm’s direction is the reason his departure, vaguely attributed to “personal reasons”, came as such a shock to outside observers.  But insider leaks soon revealed that the resignation was the direct result of him being passed over to replace former co-CEO Jim Hagemann Snabe, with whom he reportedly had a tense relationship. A few weeks later, Bill McDermott was named the sole head of SAP.

Being the CEO of Infosys seems to be the next best thing from Sikka’s point of view, but it’s hardly a compromise for the outsourcing juggernaut. In fact, the hire marks the first decisive milestone in its ambitious shift from labor-intensive services to higher margin software products, according to Constellation Research founder and theCUBE alumnus R “Ray” Wang. The transition carries short-term challenges but has the potential to pay massive dividends on the long run if executed correctly, he wrote in a blog.

It will be up to Sikka to see that formidable task through. The good news is that the Infosys board has apparently given him a free hand in carrying out his plans,  a decision Wang says is reflected in the changes made to the firm’s leadership against the backdrop of the appointment. Most significantly, executive Chairman N.R. Narayana Murthy stepped down, with CEO S. D. Shibulal and director Srinath Batni following him into retirement. Meanwhile, former head of retail Pravin Rao is taking over as chief operating officer and some 12 insiders have been promoted to the rank of executive vice president, forming a new management layer meant to to streamline the company’s journey into the cutthroat enterprise software market.

Image courtesy of Infosys