Can Software Help Infosys Out Of Financial Rut?

IBM plunged in over the past two years, buying Unica, CoreMetrics, DemandTec, and Sterling Commerce to manage digital marketing and support e-commerce transactions. This week, marketing automation specialist Marketo bought startup Crowd Factory to give it more tools for managing marketing in social networking. Eloqua is another well-known specialist. It wouldn't be a surprise to see Salesforce.com move into this arena in a bigger way. Most marketing automation software is sold as cloud-based software, like Infosys's BrandEdge.

Infosys will try to make the case for having a comprehensive online marketing suite. It talks about having components for the four key processes: building digital assets, listening to customer reaction, understanding performance through analytics, and engaging with customers through myriad channels, from email to Twitter. Purohit declined to say what Infosys is charging for BrandEdge, but it won't be a simple per-user, per month fee like Salesforce or Google Apps online software subscriptions. Instead, it will be negotiated depending on a mix of factors such as the number of marketing campaigns. "That's what really makes it variable cost," Purohit said.

Infosys has about $350 million in software contracts today. Most of it comes from Finacle, which is used by about 150 banks to do transactions processing and other back-end functions. Infosys' other software products and platforms have only about 40 customers across them. Infosys’s marquee customer for the BrandEdge product is GlaxoSmithKline, a global pharmaceutical and consumer healthcare company.

Infosys certainly brings IT operations expertise and credibility to a cloud software model. It knows how to run large-scale software systems, and companies have a long history of trusting it with sensitive data.

Can it sell cloud software head-to-head against software veterans such as IBM? Can it build easy-to-use software that people outside IT organizations will embrace? Can it build new relationships beyond IT needed to sell this software? Purohit makes no bones that he's selling BrandEdge foremost to CMOs, not to the CIOs, who know Infosys much better. This is new territory for Infosys in more ways than one.