Infy goal to touch $20 bn by 2020

Is buying US-based Kallidus for Rs 760 cr

Infosys Technologies, the country's second largest information technology services company, said on Friday it had set an aim of $20 billion in revenue by 2020.

By which, it said, it would strive to achieve an operating margin of 30 per cent, driven by much higher employee productivity.

All this is despite short-term pressure due to cross-currency headwinds and changed in buying patterns of its global clients.

Vishal Sikka, managing director and chief executive officer of the Bengaluru-based company, said $1.5 bn of this aspired-for revenue would come through inorganic (acquisition) means. Around $2 bn (10 per cent) would come from newer services, harnessing the power of technologies like artificial intelligence, design thinking and so forth, on which the company has made inroads already as a part of its 'Renew-New' strategy.

Infosys also announced on Friday that it had entered into a definitive agreement to acquire US-based Kallidus Inc, a provider of digital experience solutions, including mobile commerce and in-store shopping experiences, to large retail clients. The company would pay $120 mn (around Rs 760 crore) in cash, including retention bonus and a deferred component.

This is the second acquisition by Infosys in the areas of newer technologies. The first one, done recently, was of Panaya, a provider of automation technology, for an all-cash deal of $200 mn (Rs 1,250 crore).

"That is the aspiration we have, of getting to $20 bn by 2020 at a 30 per cent margin and $80,000 revenue per employee. We will see new kind of services, what we have referred to as next-generation services. Where people are surrounded by software and technology and, therefore, you have much more productive and capable individuals, to take advantage of automation around them to become much more amplified," said Sikka.

Infosys also announced it had invested $2 mn to acquire a minority stake in Airviz, a personal air quality monitoring start-up, a spin-out from Carnegie Mellon University. "The acquisition positions us as a driving force in the fast-growing personal health monitoring market, with a big data solution that provides indoor air pollution sensing and visualisation," the company said.

This is its second investment from a $500-mn Innovation Fund. The first was an investment of $15 mn (Rs 95 crore) in a spin-off of DreamWorks Animation, a Nasdaq-listed animation studio which develops animation movies.

As a part of its Innovation Fund, it has additionally said it would launch an incubation programme for innovative ideas from within the company and outside. "This incubator will help identify, nurture, grow companies engaged in innovative, new and disruptive technologies that can help our business and create future growth areas," the company said. "By guiding and mentoring these businesses early, we hope to have the first pick of new innovations that we can bring to market and scale, thus improving the chances of viability and long-term success for the start-ups involved.