Abhinav Agarwal

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Vishal Sikka's Appointment as Infosys CEO

Thu, 2015-01-15 04:38

My article in the DNA on Vishal Sikka's appointment as CEO of Infosys was published on June 25, 2014.

This is the full text of the article:

Vishal Sikka's appointment as CEO of Infosys was by far the biggest news event for the Indian technology sector in some time. Sikka was most recently the Chief Technology Officer at the German software giant SAP, where he led the development of HANA - an in-memory analytics appliance that has proven, since its launch in 2010, to be the biggest challenger to Oracle's venerable flagship product, the Oracle Database. With the launch of Oracle Exalytics in 2012 and Oracle Database In-Memory this month, the final chapter and word on that battle between SAP and Oracle remains to be written. Vishal will watch that battle from the sidelines.

By all accounts, Vishal Sikka is an extraordinary person, and Infosys has made what could well be the turning point for the iconic Indian software services company. If well executed, five years from now people will refer to this event as the one that catapulted Infosys into a different league altogether. However, there are several open questions, challenges, as well as opportunities that confront Infosys the company, Infoscians and shareholders, that Sikka will need to resolve.

First off, is Sikka a "trophy CEO?" There will be more than one voice heard whispering that Sikka's appointment is more of a publicity gimmick meant to save face for its iconic co-founder, Narayan Murthy, who has been unable to right the floundering ship of the software services giant. Infosys has seen a steady stream of top-level attrition for some time, which had only accelerated after Murthy's return. The presence of his son Rohan Murthy was seen to grate on several senior executives, and also did not go down too well with corporate governance experts. Infosys had also lagged behind its peers in earnings growth. The hiring of a high-profile executive like Sikka has certainly restored much of the lost sheen for Infosys. To sustain that lustre, however, he will need to get some quick wins under his belt.

The single biggest question on most people's minds is how well will the new CEO adapt to the challenge of running a services organisation. This is assuming that he sees Infosys' long term future in this area of services. Other key issues include reconciling the "people versus products" dilemma. Infosys lives and grows on the back of its ability to hire more people, place them on billable projects that are offshored, and then to keep its salary expenses low - i.e. a volume business with wafer thin margins that are constantly under pressure. This is different from the hiring philosophy adopted by leading software companies and startups around the world - which is to hire the best, from the best colleges, and provide them with a challenging and yet flexible work environment. It should be clear that a single company cannot have two diametrically opposite work cultures for any extended length of time. This, of course assumes, that Sikka sees a future in Infosys beyond labor cost-arbitraged services. Infosys' CEO, in an interview to the New York Times in 2005, had stated that he did not see the company as aspiring beyond that narrow focus. Whether Sikka subscribes to that view or not is a different question.

In diversifying, it can be argued that IBM could serve as a model. It has developed excellence in the three areas of hardware, software, and services. But Infosys has neither a presence in hardware - and it is hard to imagine it getting into the hardware business for several reasons - nor does it have a particularly strong software products line of business. There is Finacle, but that too has not been performing too well. Sikka may see himself as the ideal person to incubate several successful products within Infosys. But there are several challenges here.

Firstly, there is no company, with the arguable exception of IBM, that has achieved excellence in both services and products. Not Microsoft, not Oracle, not SAP. Sikka will have to decide where he needs to focus on. Stabilize the services business and develop niche but world-class products that are augmented by services, or build a small but strong products portfolio as a separate business that is hived off from the parent company - de-facto if not in reality. One cannot hunt with the hound and run with the hare. If he decides to focus on nurturing a products line of business, he leaves the company vulnerable to cut-throat competition on one hand and the exit of talented people looking for greener pastures on the other hand.

Secondly, if Infosys under Sikka does get into products, then it will need to decide what products it builds. He cannot expect to build yet another database, or yet another operating system, or even yet another enterprise application and hope for stellar results. To use a much-used phrase, he will need to creatively disrupt the market. Here again, Sikka's pedigree points to one area - information and analytics. This is a hot area of innovation which finds itself at the intersection of multiple technology trends - cloud, in-memory computing, predictive analytics and data mining, unstructured data, social media, data visualizations, spatial analytics and location intelligence, and of course, the mother of all buzzwords - big data. A huge opportunity awaits at the intersection of analytics, the cloud, and specialized solutions. Should Infosys choose to walk down this path, the probability of success is more than fair given Sikka's background. His name will alone attract the best of talent from across the technology world. Also remember, the adoption of technology in India, despite its close to one billion mobile subscriber base, is still abysmally low. There is a crying need for innovative technology solutions that can be adopted widely and replicated across the country. The several new cities planned by the government itself presents Sikka and Infosys, and of course many other companies, with a staggering opportunity.

Thirdly, the new CEO will have the benefit of an indulgent investor community, but not for long. Given the high hopes that everyone has from him, Sikka's honeymoon period with Dalal Street may last a couple of quarters, or perhaps even a year, but not much more. The clock is ticking. The world of technology, the world over, is waiting and watching.

(The opinions expressed in this article are the author's own, and do not necessarily reflect the views of dna)

Flipakart's Billion Dollar Sale, And A Few Questions

Thu, 2015-01-15 04:35
My article on Flipkart's Billion Dollar Sale and an article that appeared in a business daily on the preparations that went into it was published in  DNA on December 29, 2014.

This is the full text of the article:

A Billion Dollar Sale, And A Few Questions, by Abhinav Agarwal, published in DNA, Dec 29 2014
An article published on an online news portal (reproduced from a business daily) claimed that "Flipkart's 'Big Billion Day' was planned over more than 700,000 man hours (six months of work put in by 280 people over 14 hours every day) to get the back-end systems ready." This is a stupendous achievement by any yardstick, and all the more creditable given that Flipkart's infrastructure is nothing to scoff at to begin with, and which is rarely known to keel over during traffic surges. Despite all this preparation however, Flipkart didexperience issues during its big sale, which led to its founders issuing a public apology - an act of entrepreneurial humility that was well appreciated by many.

The article states that Flipkart "clocked a gross merchandise value (GMV) of $100 million". But what is "GMV"? According to Investopedia, Gross Merchandise Value, abbreviated as GMV, is "The total value of merchandise sold over a given period of time through a customer to customer exchange site. It is a measure of the growth of the business, or use of the site to sell merchandise owned by others." But there is some confusion as to what GMV actually means. This arises from the fact that GMV is not a standard accounting term. For instance, a search for "GMV" or for "Gross Merchandise Value" on the web site of The Institute of Chartered Accountants of India throws up zero results. GMV's definition differs based on each e-commerce vendor's assumptions. Therefore, if an item's price is marked at Rs 100, and Flipkart sells ten such items for Rs 70 each, is the GMV 700 or Rs 1000? Let us be generous and assume that GMV refers to the total sale value, before discounts - that would make it easier for Flipkart to claim they clocked in a hundred million dollars in GMV. Plus it is the logical thing to do - from a marketing perspective.
Next, the average discount offered at leading e-commerce sites like Flipkart can be 20%, 30%, or even touching 40% in some cases. It is generally understood, that at least for items like books, wholesalers get a discount of 40% off the list price from publishers. This can be lower for other categories of goods like electronics (retailers do not get the Apple iPhone at 40% off the list price - at least one hopes so!), but can be higher for other categories like clothes. Therefore, assuming a discount of 40% (on the higher end), it means that for the hundred million dollars worth of GMV, Flipkart's cost for those goods was 60 million dollars. Assuming they passed off 20% of the GMV as a discount to the end customer - and discounts were generally higher than 20% during that sale period, it leaves them with a gross profit of twenty million dollars, into which they have to squeeze all their costs, to be profitable. Hold that number in your mind for a minute.

Let us now take a closer look at the other statement in the article's sub-heading, which says, "Flipkart's 'Big Billion Day' was planned over more than 700,000 man hours (six months of work put in by 280 people over 14 hours every day) to get the back-end systems ready." If Flipkart, as the article claims, took 700,000 man hours (the politically correct phrase would be "person-hours", but we will grant the author of the article some leeway here), that translates to a little over $20 million that the company spent on this sale in getting its network infrastructure scaled up. How? My assumptions are, and there are many, many assumptions here, that the base salary for the Flipkart employees that worked on this initiative is Rs 26 lakhs per annum (yes, yes, more on this later). Second, I have taken a year as having 2080 work-hours (52 weeks, times 40 hours per week). Third, I assume that the loaded cost adds 50% on top of a person's actual salary - or Annual Guaranteed Pay (AGP) as is also sometimes referred to. Fourth, I take Rs 65 to a dollar as my exchange rate (the exchange rate was lower a couple of months back; the numbers would look worse - for Flipkart - if I were to use those). Using these assumptions, at an aggregate level, this means a hundred and thirty crores rupees, or US$20 million. You can see the calculations, and the assumptions, in the figure at the end. Hold this second figure of $20 million in your head.

Compare the two figures now. For a maximum gross profit of 20 million dollars from their big billion sale, Flipkart had to spend the same sum on upgrading their hardware and network infrastructure to deal with the traffic to their web site. Ignoring other fixed costs, did Flipkart make money, any money at all from their sale?

One could argue that there are many assumptions in my calculations, and I do agree that there are several. You can plug in your own numbers and the mileage will surely vary, but not by much, I expect. I have used three different sets of numbers (see below)

Second, the argument could be made that these are not contractors who are paid by the hour, and many worked for "over fourteen hours every day" - which is not uncommon for young, passionate employees working at hot startups (I regularly clock in 12 hour workdays, and I am no longer young, nor do I work for a start-up!) On the other hand, I could argue that Rs 26 lakh is not that wildly off the mark a figure, given that Flipkart recently made offers to fresh graduates at IIT-Kharagpur where the average salary offered was Rs 20 lakh - for engineers with zero work experience. Not everyone working on the preparation for the Big Billion Sale would have been a fresh-out-of-college greenhorn. The loaded cost factor could be more than 50%, given that Flipkart would be handing out stock options to its employees, and having other on-premise perks (the role model for all young startups seems to be Google).

But to fixate on the specifics of any one number here would be to miss the wood for the trees, in a manner of speaking. It is not the main point of my post either. The article itself reveals two hidden points. The first is that this article in the business daily is a successful implementation of a company's PR or marketing department getting its point of view across to a news organisation, not in the form of a press release, but as a news article. It lends an air of neutrality and credibility even as it presents the company's point of view, in an unquestioned manner. There is no mention of the article being a paid advertorial. Second, it also serves as an eloquent advertisement for Flipkart's formidable computing prowess and infrastructure. To that end, it serves as a signal of intent to its competitors, especially Amazon, that Flipkart won't be found wanting when it comes to competing with the big bad daddies of the global e-commerce world. In the end, however, the inescapable question remains - to drive its top-line, is Flipkart caught in a situation where the more it sells, the more it loses? Is it finding it difficult to get economies of scale? Or is it still in the growth stage, where margins and profits take a backseat to marketshare and growth? With more than a thousand crores in annual revenues, if one of the most successful e-tailers in the country finds itself in this bind, the other, smaller players will find the going much tougher. Is the online e-commerce space headed for a brutal shakeout in 2015?

Views expressed are the author's own

OBIEE Training Site

Tue, 2014-06-24 13:33
I was contacted by Seth Williams, who pointed me to this OBIEE training site - http://www.fireboxtraining.com/obiee-training, and asked if I would link to it. There is a an online tutorial, as well as a video, on how to create KPIs using OBIEE - How To Use KPIs | OBIEE Online Training Tutorial

I think this is useful, so am posting it to my blog - which, by the way, you would have seen is not being updated regularly. Feel free to browse to the site. Do let Seth and the people at Firebox know what you think of the site and the tutorial.

Disclaimer: I am not endorsing the site or the trainings. But you know that.

Smart View Version to use with OBIEE

Mon, 2013-10-28 00:49
Users who have downloaded the latest version of Oracle Business Intelligence 11g -, and wish to use the Oracle Hyperion Smart View for Office add-in to connect to Oracle BI, need to use the latest version of Smart View - - that is available for download on OTN here.
After downloading this version of Smart View, if you want this version of Smart View to be available as a link from the Home Page of Oracle BI EE (the "Download BI Desktop Tools" dropdown under the "Get Started..." section), you need to follow the instructions (also see Installing and Deinstalling Oracle Business Intelligence Client Tools)
You can find more information in the BI documentation library (Business Intelligence Documentation for Oracle Fusion Middleware 11g ( or in the Oracle Essbase Documentation Library, Release

Happy Monday!
Bangalore, July 08, 2013

OBIEE Bundle Patch Now Available

Mon, 2013-10-28 00:48
Oracle Business Intelligence Suite Bundle Patch is now available for download. The bundle patch id is 16556157 and can be downloaded from the My Oracle Support portal for Microsoft Windows x64 and Linux x86-64 platforms.

The ReadMe states "This Suite Bundle Patch is available for all customers who are using Oracle Business Intelligence Enterprise Edition"

OBIEE Bundle Patch Now Available

Sun, 2013-06-30 22:37
Last week saw the release of the OBIEE Bundle Patch and on Friday bundle patch for Oracle Business Intelligence Enterprise Edition became available on the Oracle My Support Portal.

The tracking ids for the respective bundle patch components are:
  • Oracle Business Intelligence Installer (BIINST): ID: 16747681
  • Oracle Real Time Decisions (RTD): ID: 16747684
  • Oracle Business Intelligence Publisher (BIP): ID: 16747692
  • Oracle Business Intelligence ADF Components (BIADFCOMPS): ID:  16747699
  • Enterprise Performance Management Components Installed from BI Installer (BIFNDNEPM): ID:  16747703
  • Oracle Business Intelligence: (OBIEE): ID: 16717325
  • Oracle Business Intelligence Platform Client Installers and MapViewer: ID: 16747708
Happy Monday to all!