March 23, 2003

Interesting interview with Phaneesh Murthy

In a wide ranging interview to Business Line, Phaneesh Murthy speaks about some of the sales and marketing techniques he used as marketing head of Infosys Technologies, how he sees the BPO opportunity evolving and other related topics.

Here are extracts from the interview that I found particularly interesting:

On his pitch to global clients:
Today most large companies have their cost structures in developed countries but have the bulk of their growth markets in developing countries. I am saying I am going to try and change the cost structure to a developing country so that you can compete more effectively in the growth markets that you have. If you build that story, if you can educate the board on that story, they are unlikely to go to somebody else just because they are offering at $2 less.

On why software companies can't be into both products and services:
Except for IBM, there is no other company, which has got successfully both product and general services. Reason? In a services company, sales and marketing costs as percentage of revenues are about 6-7 per cent while in a product company it is about 25 per cent.

In a services company, engineering costs are about 50-60 per cent of revenues while in a product company it is about 20 per cent .The models are very different and it is very difficult to figure out how to make them co-exist under the same management.

At some point of time, a services company fresh into a product starts wondering if it would be a great opportunity to do a 25 people or 50 people project. "There are guys here whom I can use for the project where as they are building some products whose revenues will come in a year or two later." That's a destructive but inevitable thought.

Click Here to read the full interview at the Business Line web site.