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July - 2010 - issue > Cover Story
Infinite-Scripting-niche-in-IT-services-market
Christo Jacob & Vimali Swamy
Friday, July 2, 2010
The last three years, had been testing times for the IT industry across the world. While large corporations hardly grew by 10 percent, the mid tier companies were on a decline. However, there is one among the few companies that managed to change the script – Infinite Computer Solutions, posted a growth of close to 35 - 40 percent; a feat rarely accomplished.

Founded by Sanjay Govil in 1999, the Bangalore headquartered company is one among the many mid-tier IT service providers in application development and maintenance, testing, infrastructure management and intellectual property (IP) leveraged solutions. But what sets it apart in the vast pool of players? Upinder Zutshi, CEO, Infinite, is quick to answer, “A healthy mix of Fortune 100 and mid level organizations as customers coupled with IP based solutions in niche services areas across large number of verticals.”

A step ahead of others

Zutshi believes that to exist in a competitive market as that of IT services, one has to build long lasting partnerships, to make every association mutually profitable, rewarding and enjoyable, thus enhancing the scope of engagements by expanding the breadth of services, cross-selling opportunities, delivering end-to-end solutions and addressing new areas within clients’ organization. While, disruptive innovations, especially, in the areas of technology, revenue and delivery models have created a level playing opportunity for players globally; a reflection of strong understanding of the business, customer centricity, and desire to constantly innovate and do all this with simplicity and trust, has been Infinite’s edge. Through strategic and truly collaborative relationships with top technology providers, Infinite brings its business insight, accelerated methods and greater convenience to customers.

The company’s global delivery model and offshore transition methodologies ensure that customers enjoy all the benefits of off-loading work offshore. It works with a variety of engagement models, and recommends the one most suited to the customer's specific needs. “Our staff is highly skilled and has significant experience overseeing large-scale Application Management Outsourcing engagements for Global 1000 companies. We employ a scalable staffing approach as well as a 24x7 virtual workday model to meet the specific needs of each client,” says Zutshi.

The engagement model also offers flexibility in terms of tailoring these models to suit customer’s business requirements. The value proposition in these models is built around the theme ‘cost effective, faster and better’. Further, Infinite’s Global Delivery Framework coupled with the three-tiered delivery approach comprising on-site, off-site and offshore delivery options complemented with the wide range of flexible engagement models provides clients the flexibility in terms of engagement with access to best of the processes, methodologies, tools and resources across various global locations. This framework focuses on bringing in processes, efficiencies and productivity tools to enhance revenue productivity and deliver time and cost efficiencies. The Technology and Solutions Framework is integrated with Infinite’s engagement and Global Delivery model, to ensure effective and efficient delivery execution. The engagement models start with onsite managed projects and extend up to IP leveraged, revenue sharing model.

“We are testing out new business models that could be crucial to future growth and profitability. In a re-set world post the recession, old equations of more people equalling more revenues may no longer hold true,” says Zutshi.

The company, for instance, has entered into a 10 year strategic alliance with Motorola to develop and support its software enabled messaging products — SMS and MMS. Infinite will acquire a non-transferable, royalty bearing worldwide license to Motorola’s messaging product solutions. It will now develop an application product that will be sold as a licensed implementation back to Motorola, its clients, and third parties. While the IP of the licensed messaging product will remain with Motorola, Infinite will retain rights to the IP of all add-on software that it develops.

“Our sustainable engagements with clients using innovative risk-reward, revenue-sharing models, acquiring proven revenue generating IP or creating our own, together with our improved value offerings allow our customers to better align their R&D spend, extend flexible multi vendor product portfolios to their end clients, with reduced risks,” Zutshi adds.

The strategy has worked well. Today the company is witnessing growth, from $85 million revenue in 2008 to $140.9 million in 2010, out of which 90 percent of the revenue share is from top 10 customers which are Fortune 100 companies.

The recession has been a key driver in helping us reach this stage says Zutshi. While IT outsourcing is part of 'business as usual' CIO strategies in the aftermath of the recession, most technology leaders are paying "far more attention" to what they are getting for their money. Hence, CIOs of Fortune companies are under pressure to strike a balance between innovation and transformation thereby putting pressure for IT services company. “Today quite a lot of companies have started engaging with mid tier companies as they are looking at right mix in their vendor list, provided they have a good track record. Infinite is rightly positioned to serve this market,” says Zutshi.

Today, Infinite has emerged as the alternative mid size provider of Application Management outsourcing (AMS), Infrastructure Management Services (IMS) and Intellectual property leveraged solutions (IP) for several large clients in telecom, media, energy, manufacturing and healthcare verticals.

Businesses Galore

Being a mid-level services company, Infinite has its presence in multiple sectors providing a myriad of services, but Zutshi is sharp to realize that having competence in niche areas is the way to go in the long run. Hence, Infinite is focusing strongly on multiple service lines like AMS, IMS and IP leveraged solutions.

Having traditionally started as an AMS shop, the company today takes care of development, management and maintenance of IT applications for its clients. Infinite provides various levels of support and enhancement ranging from handling initial service desk queries and correcting application errors, to preventive maintenance, for both packaged and custom application systems. “While AMS continues to be our bread and butter, currently IMS is our key focus, as we have traditional strengths in this area.” says Zutshi.

IMS represents a massive $126 billion market—virtually untapped by Indian players. While this market is still a tough one to crack and remains dominated by global giants — the likes of IBM, EDS and CSC—Infinite sees itself competing with pure-play Indian software services biggies by leveraging its offshore expertise.

Most Fortune companies are reluctant to hand over control of their networks to outsiders. Also, unlike application development, infrastructure management is a critical issue where even minutes of downtime can cripple a client’s business. The ideal route would be to start with an onsite model and then move the services offshore, as is done in the software services industry. However, Infinite has taken this route years back and this has given confidence to its customers.

Today, Infinite’s IMS business is gaining momentum and this year IMS brings in close to 16 percent of the overall revenue. One of the major reasons is its strong traditional capabilities in IMS like supporting the back end like servers, switches, routers, applications and managing them remotely. Infinite has a three year alliance with iYogi, to setup and manage service desk operations and also provides L1, L2, L3 support for iYogi’s clients across the U.S, Canada, United Kingdom, Australia and other geographies in the future. This business is expected to scale between 500 to a 1000 employees for Infinite over next 12 months. This comes in as a catalyst for Infinite to get more big deals and look for acquisitions in this space to strengthen its presence.

Infinite has made significant progress in moving its revenue base to IP based revenue sharing model. This shift is achieved via a combination of acquiring customer IP in exchange for a revenue share model and their own investment in IP creation.

“We are bundling our service offerings to enhance customer time to service initiation or significantly reduce the operating costs,” says Zutshi. In this model the company takes ownership of the customer IP under a licensing agreement and provides full lifecycle R&D support in exchange for revenue share on the business. This allows the customers to better align their R&D spend, reduce their risks and Infinite in exchange gets a more profitable business model. This also allows the company to increase its value offering for customers. The alliance with Motorola is an example of the new IP based model. The company expects the share of revenue from this project to be $20 million in fiscal 2010-11, while starting fiscal 2011-12 this is expected to be upwards of $40 million per year. However, as a large part of the revenue will be derived from the sale of Capacity Licenses, which is based on growth of customers and the messaging usage in the future, the total deal value may be significantly different from the current forecast range.

Having established its competence in the telecom services industry, Infinite is now eyeing the remote infrastructure management (RIM) in the U.S, Europe and Indian markets. While currently it serves few key customers in RIM vertical in these markets, the company is hoping to be a major player in this domain in the near future, as companies in U.S. and Europe are moving from software outsourcing to RIM outsourcing to India.

The Work Culture

The true testimonial of a company’s strength lies in its employees and the culture and value imbibed in them by the organization. Zutshi beams proudly when he talks about the company’s work culture. The Infinite DNA provides a non-hierarchical open work environment. “At Infinite, we are proud to offer employees a workplace infused with positivity and laced with a feeling of happiness. We believe that workplace celebration is an opportunity to relive accomplishments – both personal and professional, providing a platform to celebrate them is integral to our “Infinite Spirit” he says.

Infinite’s employee recognition program is a combination of both informal and formal acknowledgement of a person’s/teams’ performance, efforts or business results that support the organization’s goals and values, where often performance has been beyond expectations. Employee recognition is therefore a potent communication at Infinite, with awards like the Star Performers, Eagle of the Year, Best Project/ Best Department Awards, Best Quality Person of the Year and many others.

Celebration of success at Infinite is not only about employee recognition, but is also about building a happy and fun-filled work culture. I-verve -Infinite’s Employees’ Club represents the collective energy of the organization. Apart from infusing an element of fun and frolic in the Company, I-verve also works towards social causes.

Infinite’s other initiatives like I-engage, are focused on conceptualizing and organizing activities to deliver engaging and compelling communication for employees and the community. This initiative facilitates pro-active conversations between the employees and their managers, buddies and mentors.

“Our focus on unique people management initiatives has been enviably electrifying and it’s been our constant endeavor to build Infinite into a 'great' place to work. Our global headcount as of now is about 3800 employees and contractors put together, with attrition rate way below industry average at 8.67 percent, thus strengthening our commitment to service,” explains Zutshi.

The Vision Ahead

With Indian IT industry pegged to grow significantly year on year and off-shoring increasingly being accepted, with large global corporations consolidating and reviewing their vendor list, putting higher emphasis on specialization, flexibility, agility & focus, with growth in R&D and IMS Services, the market looks interesting and challenging too.

‘‘In past, several mid-tier companies have been high on spurge of growth but have become dormant after crossing a certain revenue mark. Our strategy for long term growth is simple. We are looking at engaging with at least 10-20 Fortune 100 companies for a long term business relationship and the rest with mid-sized clients. This will ensure that there is constant source of revenue in tough times while we constantly scout for more business,” explains Zutshi.

The latest landmark in Infinite’s journey so far, has been its IPO early this year in India. Zutshi believes that being a publicly listed company brings in additional advantages and at the same time pressures of more expectations of the shareholders- the new owners of the company.

As the world-wide industry moves ahead after the recession and the outlook for growth of the Indian IT industry looks strong, Infinite is well positioned to grow ahead of the industry average. Infinite today has established its presence in most of the large Telecom & IT Services markets of the world with offices in the U.S. in multiple locations, as well as in the U.K., India, Singapore, Malaysia and China, thus increasing its geographical footprint in an aggressive manner while bagging some of the leading global names as its clients.

Infinite has expanded its delivery centers in India, including its subsidiaries; Infinite currently has five delivery centers in India – with two in Bangalore, one each in Chennai, Gurgaon & Hyderabad. “Our Corporate campus in India is housed in Whitefield, Bangalore in an area of about 4.48 acres. We have also been allocated 4.87 acres of land in the Special Economic Zone (SEZ) in Hyderabad for our plans to build a second campus,” Zutshi says.

Having a legacy in telecom, Infinite is now also geared to tap opportunities in the emerging verticals like healthcare, energy and utilities. Its recent win of the Uttarankhand R-APRDP project bears testimony of its strengths in the utilities vertical, where some of the leading Indian IT companies dominate. Moreover Zutshi is confident that each of the three businesses of Infinite- AMS, IMS and IP leveraged solutions, will contribute about a third of the revenue by Fiscal 2014.

As per the Nasscom study, the Indian IT industry is expected to be worth USD 225 billion. This also reflects that this growth will bring in opportunities for mid-size players like Infinite, who have all the requisites in place.

Infinite’s business model of focus on areas which are unique and differentiated, has helped it grow its net profit by $4.8 million in the quarter ended March 31, 2010.

With veterans at the helm and committed associates and well satisfied customers, Infinite is a trend setter for unique engagement model and niche in the IT services market, to define the way global leaders engage with vendors in India

Fast Facts

Founded: 1999
Founder & Chairman: Sanjay Govil
Managing Director: Upinder Zutshi
Headquarters: Bangalore, India
Revenue: $140.9 Million
Headcount: 3800 (as of June 2010)
Vertical: IT services
Website: www.infinite.com




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