Dayanand Menashi

Infosys' Q1 Results: Gains From Rupee's Strength

Hi Thomas,
I am glad you liked my article......about aquisitions we are just seeing the one part of story.....the other part can be that a US based company like IBM or HP can aquire Infosys or Satyam and gain the core competance of outsourcing that INFY posseses.

I compare outsourcing and mainstream consulting with icecream and a flull fledged restaurant business. Following is a scenario I would like to describe.

Let us say in your town you have a restaurant that offers people good food and offers ice creams as dessert. A new joint opens up across the street that just sells a large variety of icecreams at about one fifth of price. So people start having food in the restaurant and walk to the icecream joint and enjoy the ice cream at one third of price.

Based on the above story either the restaurant can takeover the ice cream shop or the ic cream shop can takeover the restaurant. The deciding factor for investors would be whose business model would be easier to understand.

Coming back to our discussion , I guess Accenture and IBM have proved their point by ramping up their outsourcing business and generating large outsourcing revenues last few years. Companies like Infosys have yet to prove their point by ramping up their consulting practice.....

As of today people know that it is easir for a consulting company to adopt an outsourcing model than an outsourcing company adopting a consulting model.

Dayanand.