How Infosys Earns Money

How does Infosys make money? This question comes up often, but it’s not always easy to understand. If you’re new to the field of outsourcing and business software, the terminology can be confusing at first glance. Let’s take a look at how Infosys makes money to clear things up in this article on how Infosys earns money.

Introduction

Infosys is an Indian-based business that provides information technology and consulting services. They first began in 1981 with the help of a partnership between N.R. Narayana Murthy, a founder of Softlab; Gopalan Natarajan; S.D. Shibulal; Mohandas Pai; Dr. Narayan Murthy, who is known as India’s Bill Gates founded Infosys in 1981 with six partners and $250. Today, it employs over 200,000 people worldwide and has operations in 36 countries. Its revenue for 2017 was $10 billion USD which was up 9% from 2016. In this blog post we will cover how Infosys earns money: what are its sources of revenue? How does it make money? What are some drawbacks to this business model?

Solutions, Services, and Products

Infosys, a multinational software technology services company based in India, provides software consulting and IT outsourcing services. These services can be grouped into the following categories: Consulting Services, Technical Solutions and Platforms, Data Analytics and Cognitive Services. Here is a breakdown of how these product lines generate revenue for the company.
Consulting Services – This branch generates money from projects that are focused on delivering technologies with best practices in fields such as banking and financial services.
Technical Solutions and Platforms – Revenue from this branch come from licensing fees charged to companies for use of Infosys’s products, as well as its own internally developed software platforms.

What Customers Value

Unlike other software companies that sell individual products, Infosys is a consulting company. Customers value their ability to work with people who are skilled and who understand what their customers need. This allows them to maintain a fairly small development team while still providing excellent service and top-quality solutions. They charge customers based on the number of hours they expect to spend working on their project.

Differentiation (Unique Selling Proposition)

Infosys is India’s second-largest IT services company, which means that it generates most of its revenue from Indian businesses. As India continues to grow as a global leader in the software industry, Indian companies are investing heavily in new technologies and hiring more engineers. One way for them to get their hands on more engineers is by using Infosys. What other ways does Infosys earn money? That answer leads us back to cost.

Product Delivery Process

It’s no secret that the customer demand for digital products and services is skyrocketing. But, what is driving this ever-growing demand? A changing competitive landscape with fierce global competition and an inability to produce traditional goods as quickly or cost-effectively as before, in part due to globalization. These factors have forced companies to re-evaluate their business models, moving from producing goods and then providing aftermarket services when needed to focusing on customer satisfaction through ongoing customer relationship management, rapid customization of a product or service to meet a customer’s exact needs and shorter product cycles. And the impetus for this new type of business model? Digital technologies.

Metrics (What Are We Measuring?)

In order to gauge the efficacy of their business model, it is important for investors to examine how well Infosys executes on the three core components of their business model. These are the software delivery market, global service and consulting offerings, and back-office processing. To judge these more effectively, one can compare them against company targets from years ago.
In order to gauge the efficacy of their business model, it is important for investors to examine how well Infosys executes on the three core components of their business model. These are the software delivery market, global service and consulting offerings, and back-office processing. To judge these more effectively, one can compare them against company targets from years ago.

Customer Relationships & Channels of Distribution Section: Key Resources
Infosys maintains key customer relationships via various channels of distribution. They primarily sell through OEMs, strategic partners, distributors and resellers. In 2012, these accounted for 74% of total revenue with 53% coming from the U.S., 17% from Europe and 18% from Asia-Pacific regions. Channel mix has evolved over time with emerging markets providing an increasing proportion. However, there is still a significant shift in how clients consume technology as they transition to cloud computing models as it provides better flexibility and scalability than on-premise solutions.

Infosys‘ Growth Strategy Section 10) Appendix

Infosys earns money by providing IT services to global enterprises, from the Fortune 500 and Forbes Global 2000 to governments and non-profits. They earn fees based on the type of contract they negotiate with their clients; license fee or time-and-materials. License fees are based on a preset price for every unit of product, while time-and-materials are charged according to a preset value for every hour of work needed. Given that many of these customers have such massive budgets, many deals are made in terms of multiples (1*10 or 2*5) which may then result in prices ranging from $50000-$2500000 per year. In addition, Infosys is able to charge higher rates because they create specialized software tailored to each client’s needs. For example, some contracts might include 100 hours of maintenance for one million dollars.

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