The Billion Dollar Year

First Infosys, then Wipro. What a start to the new fiscal year. April was the
month Indian IT’s Billion-Dollar Club really kicked off.

TCS made it there a year ago. But a lone member does not a club maketh. And
somehow, the euphoria and hype was a bit lower when TCS crossed US$1 billion in
2002-03.

Attribute that partly to listed vs privately-held. But also to the image
cultivated by Infosys over a decade. It’s the darling of the media, a brand
that makes Indians proud. It’s shown near-60 percent growth over the past five
years, nearly double that of Wipro and TCS. It’s grown tenfold in a period
that included some of the global economy’s worst years.

Wipro too has a great image. The name spells respect, ethics, consistent
performance. But it falls short of the excitement that the larger-than-life
Brand Infosys commands. These three billion-dollar entities have severely
differing philosophies about image management and public relations, and each is
a success story. But my proposition to those looking for inspiration is: Image
makes other things easier. An all-round "superbrand" image makes a lot
of difference not just in investor confidence but also in employee and customer
acquisition and retention.

The differences between the companies start right from the top: the very
accessible and visible Murthy and Nilekani vs the reclusive Premji or the quiet
and nearly-as-inaccessible Ramadorai (though customers, I hope, can access them
more easily). Then, the actions at the $1 billion milestone: Infosys gifted an
average of $1,000 per employee, a Rs 100+15 per share dividend, and a 3:1 bonus,
adding up to euphoria and "feel good". Wipro’s 2:1 bonus and Rs 25+4
per share was mitigated by its small float. With over 80 percent of stock in one
person’s hands, the impact was the most on Mr Premji, making him richer by
nearly Rs 600 crore. (TCS, being unlisted yet, is rather constrainted in this
department.)

There’s good news in the domestic market too. Our annual Megaspenders
survey in this issue shows a recovery in enterprise spending of nearly 6
percent, close to the 7 percent we predicted after last year’s survey. Small,
but a good break after bleak years, and after last year’s 17 percent drop.

It’s no surprise that 70 percent of this spend was in two verticals:
Banking, and ICT. Banking has been a long-time driver of tech in India. Both in
terms of IT in India, and of domain expertise that our services exports are
centered on. That the strongest domestic vertical is also the domain that
generates between 40 and 60 percent of our software and BPO services exports is
no coincidence. Nor is the fact our weakest markets are also the weakest domains
for exports: gaming, for instance. But all in all: IT is back. This year, IT
will be shining.