Murthy to step down, Sikka new Infosys CEO

Infosys today named former SAP executive board member Vishal Sikka as its new chief executive officer, the first time the nation's second-largest software services exporter will have a non-founder as CEO.

Sikka, 47, will replace S D Shibulal, one of the seven engineers who founded Infosys in 1981, from August 1, Infosys said in a statement.

Also, the firm's Executive Chairman N R Narayana Murthy and Executive Vice Chairman S Gopalakrishnan will step down on June 14. Murthy will be designated as chairman emeritus from October 11.

Sikka, who will also be the company's MD, quit SAP in May. He comes in at a time when Infosys has had four straight years of narrowing margins. Besides, almost a dozen senior executives have left since last year when co-founder Murthy returned as chairman.

Murthy brought his son Rohan as his executive assistant.

Infosys said the chairman's office would be dissolved and Rohan would leave the company on Saturday, when the company will hold its annual shareholders meeting in Bangalore.

A Stanford University computer science Ph.D graduate, Sikka oversaw the development of new products, including a platform for quickly analysing large databases as the chief technology officer at SAP, the world's largest maker of business-management software.

His appointment brings down the curtain on a year of suspense, which saw an 11 senior level exists since June last year, when Murthy was brought back from retirement to head the company and put it back on a high-growth trajectory at a time when peers like TCS and HCL Tech were out-performing Infosys.

Analysts feel that his appointment to the corner office at the company will end the uncertainty at the Bangalore-based firm.

The Infosys scrip was down 0.19 per cent on the BSE in the afternoon trade. 

"Dr Sikka will be inducted as a whole-time director of the Board and CEO & MD (Designate) on June 14, 2014. He will take over as CEO & MD from S D Shibulal on August 1, 2014," the Infosys statement said.

Infosys has also elevated UB Pravin Rao, President and whole-time director, as Chief Operating Officer, with effect from June 14.

Sikka, who was previously a member of the Executive Board of German tech giant SAP, was responsible for all products, from traditional and cloud-based applications to technology and platform products including HANA, analytics, mobile and middleware.

In addition, he led multiple initiatives to accelerate innovation and research at SAP. He holds a Ph.D in computer science from Stanford University, USA.

"I am honoured to lead Infosys, an iconic company built by pioneers in the technology industry. Computing technology is reshaping every industry across every walk of life. We, at Infosys, have a unique opportunity to deliver breakthrough solutions that will bring greater value to our clients, employees, investors and other stakeholders," Sikka said.

Infosys said veteran banker K V Kamath will become the Non-executive Chairman of the Board on October 11, while Murthy will be designated as Chairman Emeritus in recognition of his contributions to the company.

Other changes include Srinath Batni, a whole-time Director stepping down from the Board on July 31, and elevation of 12 leaders to the position of Executive Vice President with additional responsibilities.

On Sikka’s appointment, Vice-President & regional director at Gartner India Partha Iyengar told PTI: "The key thing is that uncertainty has ended. The first few months of Murthy's comeback were spent unravelling the product strategy and then parallely handling these exits.

"I can’t say for sure but the wrath of departures brought in a sense of urgency in announcing the next CEO. It is probably the best news in a long time."

Angel Broking’s VP Research Sarabjit Kour Nangra said the entry of a CEO into the company is the much awaited news as it has been searching for the chief, while facing the exodus of key employees. 

"Now with a new CEO, with proven credentials, we believe that the news is positive for the company’s growth prospects," Nangra said.

Murthy was brought back from retirement in June last year as Executive Chairman to turn around the company, which was once the IT bellwether.

Over the last two years, it has lagged behind industry peers like TCS and HCL Technologies, which have been showing stellar performance on strong recovery in demand for outsourcing services.

"Vishal brings valuable experience as a leader of a large, global corporation. His illustrious track record and value system make him an ideal choice to lead Infosys," Murthy said.

Today’s development is expected to put to rest the uncertainties around the company’s CEO selection which in the recent past had triggered a slew of exits including many senior leaders such as B G Srinivas, the then president, and Ashok Vemuri who was then heading North America and manufacturing vertical in the role of a senior vice president and board member.