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 NR’S SYSTEM ON STANDBY
N.R. Narayana Murthy did not just co-found India’s favourite IT company; the Infosys boss showed that someone with middle-class values and a non-business background could make billions the honest way.
India Empire Feature
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SOFTWARE SULTAN
Under NR, Infosys has touched sales of $2 billion
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Twenty-five years ago, N.R. Narayana Murthy and six other computer engineers launched a start-up that has since grown into India’s second largest software company. It cost $250—mainly borrowed from the spouses of the founders— to launch the firm. Today, riding a global outsourcing boom, it has grown into an international company with a value of $21 billion.
While Infosys made its way into the management books, Narayana Murthy, went into the history books as one of the most charismatic CEOs in the country. So when he reached the company’s retirement age of 60 in August, he called it a day. No more board meetings, no more sales targets, for this IT pioneer. The softspoken NR, who will continue as non-executive chairman and mentor, said: “It’s not easy to be away from something that you put heart and soul for the last 25 years and for which almost 24 hours a day you lived for in that sense.”
The company’s success has made Narayana Murthy, the fifth of eight children of a school teacher, an icon for India’s emerging middle class which traditionally shied away from running businesses. “He was one person who became the symbol of what I would call the most important part of new India,” said Kiran Karnik, president of the National Association of Software and Service Companies.
Narayana Murthy symbolised the coming of age of the Indian middle class. He showed that someone from the non-business classes could build a multi billion-dollar empire. Somebody with only knowledge as his capital and somebody who holds on to values that are middle class can not only do well but outstandingly well. “Till 20 years ago, people assumed if you are in business you probably inherited a lot of money or you are a crook,” said Karnik. Murthy, who owns 5.9 per cent of Infosys along with his wife and two children, is worth $1.2 billion, according to Forbes.
Unlike many who flew off to the US after graduating from the prestigious Indian Institute of Technology, Murthy took a masters in computer science and decided to stay in India.
Most new Indian businesses in the 1980s were usually set up to take advantage of a Government licence or preferential access to largely Government-controlled markets. Infosys, however, chose the less proven route of offering IT services to customers abroad. The company, which is located in Bangalore, is the second-largest Indian outsourcer after Tata Consultancy Services. In the fiscal year that ended March 31, Infosys crossed the $2 billion revenue mark to post a revenue of $2.15 billion, up 35 percent over the revenue of $1.6 billion in the previous fiscal year.
Murthy was a socialist in his younger days. While employed in France, he campaigned during Francois Mitterrand’s unsuccessful bid for the French presidency in 1974. He became disillusioned with socialism after he was detained and kept in inhuman conditions at a railway station in communist Bulgaria on his way back to India. His crime: He had a conversation with a Bulgarian on the train.
Murthy’s new prescription for countries like India is to create a large number of high-quality and well-paying jobs. “If we have to create jobs, if we have to create wealth, we have to do it in the private sector,” Murthy said.
Infosys employed 58,409 people as of June 30. It was the first company in India to offer stock options to employees. Murthy now describes himself as “an evangelist for capitalism”.
Despite the billions pouring into his bank accounts every year, the man prefers a frugal lifestyle. “This is the way I have always lived and been comfortable with,” Murthy says. “You can’t lead a fake life.” We agree.
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September 2006
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