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Infosys sets up team to scale platform unit

BENGALURU: Infosys has set up a multi-disciplinary internal team to help scale up its platforms business, as the Bengaluru-headquartered IT services company looks to tap the growing demand for products from clients.

The platforms could be proprietary software used to host educational content or process mortgages. IT companies are betting on a platform play to help offset margin contraction caused by the increasing commoditisation of their core business. Software companies need to make one-off investments in building the platform, but the returns could be exponential if a slew of customers adopt it. “We have a platform council which looks at how to scale these platforms faster. It is a cross-functional group of people,” Salil Parekh, CEO of Infosys, told ET in a recent interview. “We have a clear view that we want to scale our platforms. If we see the client view is that they want to use platforms, we will continue to build them out,” he said.

The council comprises 14 senior executives from its marketing, delivery and service teams to leverage both existing platforms and create new ones, Parekh said. “This is an internal construct to accelerate it because when you build a platform you do need multiple disciplines to work together,” he pointed out. Infosys’ larger rival, Tata Consultancy Services, has seen multi-billion dollar deals from its insurance platform and has built others for pharma and retail.

Infosys bought mortgage platform Stater last year and has its own insurance platform, McCamish. It is also looking at growing its skilling platform WingSpan and a blockchainbased platform to settle trades. Parekh, however, said building and scaling platforms will not be a quick process. “It takes a lot of time and it also takes multiple attempts. What I think is more likely is that we will work on five to 10 platform concepts, and in three, five, seven years, one or two of them will be quite successful,” Parekh said. Infosys does not break down standalone revenue from platforms.

There are two types of platform strategies, analysts said. One, in which the IT firm owns the entire intellectual property (IP) and the other, where the it helps the client build the platform and contributes intellectual property or a component of the platform.

“It appears that Infosys is increasing its investment in IP so it can better participate in both strategies. The total ownership strategy is the most risky of the two, and takes considerably more investment,” said Peter Bendor-Samuel, CEO of IT advisory firm Everest Research.

Source: Economic Times