Business Cloud News
S.D. Shibulal, chief executive officer and managing director, Infosys

S.D. Shibulal, chief executive officer and managing director, Infosys

IT outsourcing company Infosys announced ten per cent year on year growth for the quarter to end December 31, with net profit rising to nearly 21 per cent quarter on quarter. The company said Friday that much of its success and efficiency gains are owed to new inroads it is making in the cloud and big data space, marking the beginning of a transformation many of its competitors are vying to make.

The company released its Q3 earnings ending December 31, 2013 on Friday, announcing solid earnings across the board and a stable engineering and offshoring business.

Revenues for the company stood at $2.1bn for the third quarter, and net profit grew to $463m, up 6.7 per cent year on year. The company took in $1.91bn last year, and net profit stood at $434m.

“The year ahead looks exciting for the IT services industry. We believe the global economic environment has improved and our clients are gaining confidence to invest in their strategic initiatives,” said S.D. Shibulal, chief executive officer and managing director of Infosys.

Shibulal said the company’s focus on cloud computing technologies and big data as new growth areas for Infosys continue to yield solid results, with the company executing more than 200 cloud and big data-related contracts and striking more than 20 new deals in the past quarter.

Despite adding about 6,682 employees globally for the past quarter the company has become more profitable, owed in part to the growth in its cloud / big data analytics business and an ambitious restricting plan outlined in 2012.

The lift in quarterly revenues prompted the company to boost its revenue growth expectations to 11.5 – 12 per cent, up from 9 to 10 per cent for the fiscal year ending March 31.

Infosys’s shift to offering more cloud and big data services is one outsourcing companies need to make in order to stay relevant, some analysts say. Research and analysis firm Gartner told Business Cloud News last summer that a drop off in the growth rates for India’s biggest offshore and IT outsourcing providers over the past three years – from 21.8 per cent growth in 2011 down to 12.7 per cent in 2013 – needs to be countered by the adoption of more industrialised, automated, cloud-based solutions.

These companies can’t continue to compete on the cost of cheap labour alone, the firm said, and need to start carving out niches where cloud-based services plus some offshoring could be value adding. That said, Infosys competitors like Wipro and Genpact have moved in recent years to ink agreements with companies like Cisco, EMC, NetSuite and Google to develop more vertically-focused cloud-based offerings in a bid to do just that.