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October 27, 2003

Products and services businesses require completely different DNA: Infosys sales chief


"(When) someone asks me why my company (Infosys Technologies) isn't being more aggressive with products, I will just put it down to misplaced national pride. They want India to be known for great software products. It should. But India is already well known for its services companies. And that's something to be proud of," says Basab Pradhan, Infy's Senior Vice President and Head - Worldwide Sales & Retail (North America), in a column for Rediff.com.

Some extracts:

* The products and services businesses are so different, that the odds against a company with a dual strategy are fairly high.

* Indian IT services companies Infosys and Cognizant both show far better margins and growth compared to leading software product companies Siebel and PeopleSoft. (Pradhan substantiates this statement with a table containing actual figures.)

* It is true that in the last two years, rates in the IT services industry have been pummeled like never before. Clients won't pay what they used to simply because their businesses can't afford it. (However) the need for IT services has not diminished in any fundamental way.... Enterprise software, on the other hand, is in a bit of a pickle. Most industry pundits believe that the licensed software sales model needs a serious overhaul. Customers are just not willing to pay large sums of money towards license fees up front.... And then there's open source. Open source is the biggest force shaping the enterprise software industry, especially on the tools and platforms side, where some believe open source will suck the value out.... On the other hand, open source or proprietary software, you always need an integrator. Services never go out of fashion.

Click Here to read the full column.