Identifier
Created
Classification
Origin
07CHENNAI709
2007-12-14 10:36:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Chennai
Cable title:
INFOSYS FOUNDER ON IPR IN CHINA, HIRING IN U.S.
how-toVZCZCXRO1869 RR RUEHCN RUEHGH DE RUEHCG #0709 3481036 ZNR UUUUU ZZH R 141036Z DEC 07 FM AMCONSUL CHENNAI TO RUEHC/SECSTATE WASHDC 1384 INFO RUEHCG/ALL SOUTH AND CENTRAL ASIA COLLECTIVE RUEHBJ/AMEMBASSY BEIJING 0193 RUEHCN/AMCONSUL CHENGDU 0007 RUEHGH/AMCONSUL SHANGHAI 0004 RUEHSH/AMCONSUL SHENYANG 0020 RUEHGZ/AMCONSUL GUANGZHOU 0141 RUEHHK/AMCONSUL HONG KONG 1156 RUEHIN/AIT TAIPEI 0057
UNCLAS CHENNAI 000709
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ETRD EFIN EINV CH IN
SUBJECT: INFOSYS FOUNDER ON IPR IN CHINA, HIRING IN U.S.
REF: SHANGAI 785
UNCLAS CHENNAI 000709
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ETRD EFIN EINV CH IN
SUBJECT: INFOSYS FOUNDER ON IPR IN CHINA, HIRING IN U.S.
REF: SHANGAI 785
1. (SBU) SUMMARY. In a wide ranging discussion with us, Founder
and Chairman of the Board of Infosys Technologies Narayana Murthy
discussed the state of Infosys, with particular emphasis on its
expansion plans outside of India. Murthy told post that his
company's expansion into China has been hampered by his clients'
concerns about China's poor intellectual property protections. He
also said Infosys plans to dramatically expand its hiring of U.S.
graduates from its current level of 300 per year to 3000 students in
2008. Murthy acknowledged that the appreciation of the Indian rupee
has hurt his company, but did not appear overly concerned. END
SUMMARY.
LACK OF IPR PROTECTIONS HURTS CHINA BUSINESS
--------------
2. (SBU) When we asked about Infosys's expansion into China,
Murthy admitted that it is not going as well as he hoped. Murthy
said his clients, particularly European and American ones, are
reluctant to have their work done in China due to their concerns
about China's poor intellectual property protections. He explained
that "we have to spell out all of the locations where we'll do their
work in our Master Agreements" and that clients are initially
reluctant to allow China to be included. Murthy said it takes time
-- four to five years -- to overcome that reluctance. He said he
understands his clients' misgivings, pointing to a recent visit he
took to China. Stepping out of his central Beijing hotel to go for
a stroll with Peter Bonfield, CEO of British Telecom, the two turned
the corner and encountered a sidewalk vendor selling pirated
Microsoft and Windows products. Murthy said that Bonfield jokingly
asked the vendor if he had Finacle (an Infosys banking software
product) and the vendor replied "I can get it for you tomorrow."
3. (SBU) Murthy said that right now Chinese leadership does not
understand the impact of their weak intellectual property rights
protections. But he was optimistic about the long-term potential,
saying that "there is nobody better than the Chinese at solving a
problem once they are serious about it." Murthy also described
challenges on the human resources front in China. He said qualified
graduates are available, but those who have sufficient English
skills command a high premium. He also said retention is more
difficult in China than in India, as Chinese professionals are more
willing to leave for a higher salary where Indian ones value
institutions a bit more.
INFOSYS TO HIRE TEN TIMES MORE U.S. GRADUATES
--------------
4. (SBU) Murthy said Infosys is planning a major expansion of its
U.S. hiring. He explained that they have been hiring around 300
U.S. graduates per year for the last few years but that they plan to
increase that to 3,000 in 2008. To date, Infosys has brought its
U.S. hires to its Mysore campus for their five months of new-hire
training. But Murthy said they are planning to set up a U.S.
training center to deal with the major increase in U.S. staffing.
Murthy said ninety-five percent of the U.S. hires will work in the
United States, with a small number sent to work in other countries.
PHILOSOPHICAL ON THE RUPEE APPRECIATION
--------------
5. (SBU) Murthy was philosophical when discussing the effect of
rupee appreciation on Infosys. He admitted that it has a negative
impact on the company's profitability, but said "one of our founding
principles is to focus on things that you can control" and that the
currency appreciation is "a macroeconomic effect which we have to
live with." He said it gives Infosys an opportunity to try to
improve how it goes about doing its business. Murthy told us that
stepping back and looking at the phenomenon "as an Indian," it is a
benefit since India imports more than it exports. Murthy added that
the impact on a big firm like Infosys is relatively small and that
he feels for smaller businesses, especially textile firms, whose
tight margins are really squeezed by the rupee's appreciation.
HOPPER
SIPDIS
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: ETRD EFIN EINV CH IN
SUBJECT: INFOSYS FOUNDER ON IPR IN CHINA, HIRING IN U.S.
REF: SHANGAI 785
1. (SBU) SUMMARY. In a wide ranging discussion with us, Founder
and Chairman of the Board of Infosys Technologies Narayana Murthy
discussed the state of Infosys, with particular emphasis on its
expansion plans outside of India. Murthy told post that his
company's expansion into China has been hampered by his clients'
concerns about China's poor intellectual property protections. He
also said Infosys plans to dramatically expand its hiring of U.S.
graduates from its current level of 300 per year to 3000 students in
2008. Murthy acknowledged that the appreciation of the Indian rupee
has hurt his company, but did not appear overly concerned. END
SUMMARY.
LACK OF IPR PROTECTIONS HURTS CHINA BUSINESS
--------------
2. (SBU) When we asked about Infosys's expansion into China,
Murthy admitted that it is not going as well as he hoped. Murthy
said his clients, particularly European and American ones, are
reluctant to have their work done in China due to their concerns
about China's poor intellectual property protections. He explained
that "we have to spell out all of the locations where we'll do their
work in our Master Agreements" and that clients are initially
reluctant to allow China to be included. Murthy said it takes time
-- four to five years -- to overcome that reluctance. He said he
understands his clients' misgivings, pointing to a recent visit he
took to China. Stepping out of his central Beijing hotel to go for
a stroll with Peter Bonfield, CEO of British Telecom, the two turned
the corner and encountered a sidewalk vendor selling pirated
Microsoft and Windows products. Murthy said that Bonfield jokingly
asked the vendor if he had Finacle (an Infosys banking software
product) and the vendor replied "I can get it for you tomorrow."
3. (SBU) Murthy said that right now Chinese leadership does not
understand the impact of their weak intellectual property rights
protections. But he was optimistic about the long-term potential,
saying that "there is nobody better than the Chinese at solving a
problem once they are serious about it." Murthy also described
challenges on the human resources front in China. He said qualified
graduates are available, but those who have sufficient English
skills command a high premium. He also said retention is more
difficult in China than in India, as Chinese professionals are more
willing to leave for a higher salary where Indian ones value
institutions a bit more.
INFOSYS TO HIRE TEN TIMES MORE U.S. GRADUATES
--------------
4. (SBU) Murthy said Infosys is planning a major expansion of its
U.S. hiring. He explained that they have been hiring around 300
U.S. graduates per year for the last few years but that they plan to
increase that to 3,000 in 2008. To date, Infosys has brought its
U.S. hires to its Mysore campus for their five months of new-hire
training. But Murthy said they are planning to set up a U.S.
training center to deal with the major increase in U.S. staffing.
Murthy said ninety-five percent of the U.S. hires will work in the
United States, with a small number sent to work in other countries.
PHILOSOPHICAL ON THE RUPEE APPRECIATION
--------------
5. (SBU) Murthy was philosophical when discussing the effect of
rupee appreciation on Infosys. He admitted that it has a negative
impact on the company's profitability, but said "one of our founding
principles is to focus on things that you can control" and that the
currency appreciation is "a macroeconomic effect which we have to
live with." He said it gives Infosys an opportunity to try to
improve how it goes about doing its business. Murthy told us that
stepping back and looking at the phenomenon "as an Indian," it is a
benefit since India imports more than it exports. Murthy added that
the impact on a big firm like Infosys is relatively small and that
he feels for smaller businesses, especially textile firms, whose
tight margins are really squeezed by the rupee's appreciation.
HOPPER