Infosys to hive off products business, Sanjay Purohit to be CEO

Infosys will hive off its products, platforms and solutions (PPS) business into a separate subsidiary at the beginning of the next financial year, Rohan Murty said in an address to employees at an informal JAM session held at the company's Electronics City campus on Tuesday.

The new division, called Edge Works, will have a three-tier structure, one focusing on understanding market needs, another on product development and a third on implementation at client sites, said sources at the session. Sanjay Purohit will be the CEO of the division and Samson David will be the COO.

Murty is Infosys founder and executive chairman N R Narayana Murthy's son and part of the chairman's office. The possibility of a hive-off of the PPS division was first reported by TOI in December. Infosys's successful banking product, Finacle, will be part of the subsidiary.

The division accounts for about 5.5% of Infosys' over $8 billion revenue. The IT company's vision under its Infosys 3.0 strategy has been to raise it to 33%, but more than three years into this strategy, the PPS needle has barely moved. The primary argument for a hive-off is that the culture and compensation structure of a products and platforms business has to be vastly different from that of a services entity. Infosys has said that acquisitions would be important for PPS to make a leap.

"How you build PPS is very different from that of services and BPO. The move gives the PPS team the freedom to build out the software and products culture required for success. This means building in a more long-term software orientation. This also allows the company to make acquisitions should it wish to do so," said Ray Wang, CEO of US-based research advisory firm Constellation Research.

It is learnt that the company has dissolved the existing PPS structure. The company has recruited 600 senior level executives (delivery managers and VPs) from within the company to be a part of what it calls the business platform group (BizP), a product insight group to conduct market feasibility, sources said.