A delegate walks past an Infosys Technologies stall (Photographer: Namas Bhojani/Bloomberg News)

Leading IT Research Firm Advises Clients Against Giving Infosys More Business

Independent advisory and research firm Offshore Insights will advise clients against giving additional business to Infosys Ltd. after Vishal Sikka stepped down as its managing director and chief executive officer.

“We’ll be conducting an advisory for our clients asking them to watch out for Infosys, mitigate their risks and don't give additional work to Infosys because we don't feel this will get over in the foreseeable future,” Offshore Insights’ Principal Analyst and CEO Sudin Apte told BloombergQuint in an interview.

According to Apte, Sikka’s resignation is “unfortunate”, coming at a time when Infosys, for the first time in the last five years, is in a better position to engage with clients.

On field, we could see that their energy levels had risen and they started getting responses and this was the perfect time for the company to get back to their previous growth trajectory.
Sudin Apte, Principal Analyst And CEO, Offshore Insights

With Sikka’s exit, the board, the management and the delivery heads at Infosys will be busy with internal issues. That’s bound to make clients nervous, Apte said.

In this mess of CEO resignation, new CEO appointment, whether a new CEO is appointed or not, if clients start deserting Infosys, it will be a really bad news for the IT giant.
Sudin Apte, Principal Analyst And CEO, Offshore Insights

Apte expects a rise in attrition going forward, including senior-level exits. “I really worry if any capable person in his right mind would join the company at this stage, where founder and minority shareholders can pressurise the company, leading to a person like Vishal Sikka being hounded out,” he said.

‘Deals In Pipeline A Worry’

According to research firm Forrester, Sikka’s resignation will certainly impact deals in the pipeline as the uncertainty of created by the tussle between the board and founders make clients more anxious.

“The instability in the leadership of a large vendor makes its customers anxious. I'm sure they are watching the developments very closely and evaluating their engagements with Infosys,” Ashutosh Sharma, vice-president and research director of Forrestor said in an emailed statement.

Sharma, however, does not expect much impact on ongoing engagements, barring a few which may have had a strong influence from Vishal Sikka and his core team.