Infosys Names Capgemini's Parekh as CEO After Sikka Clash

(Bloomberg) -- Indian software-outsourcing giant Infosys Ltd. named outsider Salil S Parekh as chief executive officer, ending the company’s search for a new leader after previous head Vishal Sikka quit following criticism from a group of founders, landing it in uncertainty.

Parekh, a member of the executive board at Capgemini SE with degrees from the Indian Institute of Technology and Cornell University in the U.S., has been appointed CEO and managing director for a five-year term that starts on Jan. 2, Bangalore-based Infosys said in a statement Saturday.

Sikka had walked out in August after clashing with founders -- led by former chairman Narayana Murthy -- who had run the business for three decades. Infosys is also being buffeted by changing technologies, and needs to switch from basic paid-by-the-hour activities like building software systems, which are fast getting automated, to higher-margin areas like digital services.

Current Chairman Nandan Nilekani said Parekh “has a strong track record of executing business turnarounds and managing very successful acquisitions,” backed up by 30 years of experience in the global IT services industry.

Stability

Nilekani, the co-founder of Infosys, had returned as chairman after Sikka’s exit and recast the board, soothing investor and employee concerns and bringing a degree of stability to the company. Pravin Rao, who had stepped in as interim chief, will become chief operating officer and whole time director.

At Capgemini, Europe’s largest IT-services firm, Parekh had responsibility for an application-services unit that produced about half of group revenues. Ashutosh Sharma, research director at Forrester Inc. in New Delhi, said his appointment should close a “chapter of uncertainty” and re-energize Infosys in markets beyond North America, where outsourcers get the bulk of sales.

Though not regarded as one of the front-runners for the CEO post, Parekh is known as affable but aggressive, qualities he may need to draw on in navigating the relationship with the powerful founder cohort at Infosys, which has $10 billion in annual revenue.

Narayana Murthy said in an emailed statement that he was “happy” with Parekh’s appointment and sent him “best wishes.”

While Infosys hired global headhunting firm Egon Zehnder in its search, Parekh has always worked in India, mostly in Mumbai. That’s in contrast to Stanford University-educated Sikka, who spent his entire career outside the subcontinent and ran Infosys from Palo Alto, California.

To contact the reporter on this story: Saritha Rai in Bangalore at srai33@bloomberg.net.

To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, James Amott at jamott@bloomberg.net, Christopher Jasper, V. Ramakrishnan

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