From Labor Arbitrage to Tech-enabled Arbitrage: Infosys’ Enterprise AI Strategy

TBR Digital Transformation Principal Analyst Boz Hristov joins host Patrick Heffernan in this episode to detail Infosys’ key points from Infosys Americas Confluence 2025. Boz shares his insights into Infosys’ strategy changes and why clients choose Infosys, and looks at whether Infosys has figured out the staffing model of the future.

Episode highlights:

• Strategy changes for a bolder Infosys

• Whether Infosys has figured out the staffing model of the futures

• Why clients choose Infosys

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From Labor Arbitrage to Tech-enabled Arbitrage: Infosys’ Enterprise AI Strategy

TBR Talks Host Patrick Heffernan: Welcome to TBR Talks: Decoding Strategies and Ecosystems of the Globe’s Top Tech Firms, where we talk business model disruption in the broad technology ecosystem, from management consultancies to systems integrators, hyperscalers to independent software vendors, telecom operators to network and infrastructure vendors, and chip manufacturers to value-added resellers. We’ll be answering some of the key intelligence questions we’ve heard from executives and business unit leaders among the leading professional IT services and telecom vendors. 

I’m Patrick Heffernan, Principal Analyst, and today we’ll be talking about the Infosys Americas Confluence 2025 event with Boz Hristov, Principal Analyst for TBR’s Digital Transformation Practice. 

Americas Confluence setup and structure 

Boz Hristov, welcome back to TBR Talks. I feel like you’re the most frequent guest, because you’re one of the most prolific analysts here at TBR and one of the people that travels almost as much as I do. And that’s what we want to talk about today. You were at an Infosys event in California just a short time ago, and we haven’t had a chance to really sit down and talk about what you heard from them, what you learned from them, what your thinking is that’s different now about Infosys, and then maybe about how you can apply some of those new learnings to what we’re seeing across the whole IT services and consulting space. So, with that very broad set of sort of parameters, tell us some of what you learned at Infosys in California.

Bozhidar Hristov, TBR Principal Analyst: Well, thanks for having me. Always a pleasure to be here, sitting in the studio and chatting about what we learn in the market and sharing insights and perspectives. So yeah, I mean, the event that I attended was part of the Infosys Confluence series. So, they do host a series of those across the three major markets, Americas, Europe, and APAC. So, this one was here in the US, and it was hosted out in San Diego, specifically in the Coronado Island. So, it’s Confluence Americas, really, I would say it’s the biggest event for the US, largely by the fact that over 60% of their business comes from the US. So, you can imagine that a lot of their customers and partners that have a huge impact on their performance overall are present, a lot of prospects as well. So I mean, the venue aside, which was fantastic, the setup, the agenda was really well managed from having a partner day, having an analyst and advisor day, and having a lot of open plenary discussions, meaning a lot of just really thought provoking discussions across the three and a half days during the conference, and a lot of networking opportunities as well, both formal and informal. 

Plus, a typical kind of a demo setup. So you think about the big technology events, a demo setup that flipped that back into more of the services side, and you have the partners, the likes of ServiceNow and HPE and AWS and many others that are on site and really talking about the capabilities that they work on, that they collaborate with Infosys, and obviously Infosys’ technology portfolio was on display as well, which was really, you know, intriguing just to think about, you know, you have on one side technology partners, and the other side you have Infosys’ offerings. You know, it’s you can say, well, maybe a coopetive setup, but I think it’s more of a complementary setup because of how each side sees each other, how each side communicates with each other, and it was very transparent and very clear that, you know, each of the partners, both technology and Infosys, knew their role well, speaking to across the demo sessions. Now, I mean, like I said, there’s a play of opportunities for collaboration and learning a lot of new things, and I think it was a great opportunity for Infosys’, both existing clients to share experiences, partners to share experiences, also executives to host those panels and really try to instill some good ideas and great aspirations, I would say, with prospective clients as well, because it was not just existing clients, but some prospective clients that were on site as well. So again, it’s an annual recurrence event that they host. They have one coming up in EMEA shortly, and they host one in APAC, as I said, in the beginning of the year. So that’s kind of like on the logistical part and a really high-level setup. 

Strategy changes for a bolder Infosys

From an Infosys perspective, what’s different and how should you think about Infosys? I think, as you have heard me speaking about them before and I write about them extensively as part of our ongoing syndicated coverage and reports. They’re very humble from an organizational perspective, right, from a culture perspective. And I said that before, but their humbleness has allowed them to gain more trust within the ecosystem. But their humbleness this time around has not prevented them to show boldness at the same time. This time around was a little bit, I saw and I heard an Infosys which was bolder in terms of like innovation, challenging the clients and partners in a right, in a positive way, meaning that they can do more with them. And because historically, often services providers are viewed a little bit more like, we’ll do whatever the clients want. And they still do, they do a good job about that. But this time around, as they see the opportunity for them to pivot from being just a services provided to more of a solution broker, they’re trying to be a little bit more like challenging, innovative thinking. Obviously, AI was front and center of pretty much every discussion, but just the nuance of the temper and the focus of the discussions were really focused around we can do more and let us show you how we are different, meaning from a capabilities, skill perspective, client use stories. We are absorbing a lot of that on ourselves and bringing those stories to life.

Patrick: So what do you think changed that allowed them to become more bold and more willing to challenge their partners and their clients, more willing to say everything you just said about the sort of not just being the order takers, but actually being- and in the context for that question, for everybody else, not just the two of us, is one of the first conversations we had about Infosys 13 years ago was what would a successful Infosys strategy look like? So, we’re way beyond them changing their strategy from 13 years ago, but what happened in the last one to two years that allowed them to become bolder in the way you described?

Boz: Yeah. So, I think, as I mentioned, culture definitely has been really solid, I would say, and the internal trust that leadership has been able to gain with its employees, I mean, steady, I mean, everyone, just like everyone else in the service industries have experienced some ups and downs attrition, but they’ve been, kind of, able to maintain a steady attrition levels, lower attrition levels. And I think it’s also that has enabled them to deliver service quality. As I mentioned before, they- staying within their own swim lane and being that kind of like on the services supply side for many years have gained that trust and helped them do that. Investing really strategically in the right skill sets. We talked about how as companies pivot into not just selling services, but also thinking about the evolution of platform-enabled services and pivoting from labor arbitrage to tech-enabled labor arbitrage is, you know, it requires different skill sets, requires different career paths, and, you know, Infosys has certainly been very strategic on the forefront of developing the right careers for the traditional engineers that are still part of supporting the ongoing engagements, but also they’re kind of the power programmers and we just even heard this last earnings call, them talking about the forward deployed engineers as a way to kind of try to- 

Patrick: Right.

Boz: You know, almost, I mean, we know that Palantir introduced that kind of a term, in the last 18 to 24 months, but it seems like Infosys is kind of pushing the envelope with using and then really developing the skills that actually can breach into that kind of a new era of professional services that they do it, really, so that’s kind of on the investment front. 

The other side is also on the expense side, because they’ve been really managing a very well-run financially sound expense, you know, P&L, very tight expense management. And that has allowed them to place those bets and those investments and, you know, some of their sales strategies and how they’ve actually been bringing in and working with partners. And one thing that kind of came a little bit more even as they were going through the conference and having this conversation is the role of Infosys Consulting, which we know that everyone has tried historically to build a consulting brand and everyone’s just trying to use that. And Infosys Consulting is actually a sizable business for them. And, you know, while, maybe three, four years ago, Infosys was maybe leaning a little bit more on partnering with the likes of EY to be more in that kind of a consulting plus services delivery, it appears that Infosys Consulting has gained momentum already on its own to a degree where it’s actually being part of the kind of like the- leading for some of the opportunities that Infosys is doing. Now don’t get me wrong, Infosys is not doing strategy consulting the way McKinsey does, but consulting around the transformation, discussions around SAP S4 migration or anything that’s related to data analytics, you know, any industry-specific discussions as well. So you’re kind of having two-in-a-box, even three-in-a-box models sometimes between Infosys consultants, industry specialization, or maybe a horizontal lead, even now with that case now with forward-deployed engineers, it’s really bringing a lot more value to the clients that they’re trying to be well organized around.

Has Infosys figured out the staffing model of the future?

Patrick: So, I want to come back to a number of things you just said, but I want to go a little closer to 10,000 feet here since you do write our global delivery benchmark, you do look at some of the other scaled IT services companies. And when you talked about relatively low attrition, investing in people and forward deployed engineers, it makes me think, everything is changing within the staffing model for all of these companies. Is your sense Infosys is on the right path to figuring out what the new staffing model is going to look like? And sort of the part of the way that you’re measuring that or you’re evaluating that is that they do have relatively low attrition, that they are investing in the right people, that they have developed or they have adopted this forward deployed engineer model?

Boz: They do have the ingredients; I would say, obviously, it’s a marathon. It’s not a sprint, I would say. Just thinking about the pace of- although all the AI investments that may feel like it’s a very rapid, you know, 100-meter dash, you know, kind of like a Usain Bolt kind of a sprint. I think we’re looking at a little bit more of a marathon style evolution. And why I’m saying that is that if you look at the revenue per employee for the last two years, it has been really on an upward measure, right? So, as we look at services and evolving from that labor arbitrage to tech-enabled arbitrage, is revenue per employee a KPI that really shows that change and departing from a traditional linear to non-linear growth model and Infosys has achieved that. It went from about $49,000/$50,000 revenue per employee to over $60,000 revenue per employee, which is a substantial jump over the last two years. And you can argue that it’s a combination of Infosys’ successful strategy execution, slower growth in headcount, but, you know, so momentum in their revenue performance. So it’s a mix of did they really crack the code on the non-linear revenue growth model or did they just get, you know, did they time it the right way, meaning they slowed the hiring as the market was slowing from a revenue perspective, but they had enough momentum prior to that, and that helped them to expand that revenue per employee? So, I think it’s a combination of all the above. But what these two years have given Infosys is that experience and the knowledge how to manage it better at scale. 

Now, obviously, as I said, it’s a marathon, and it’s just like Infosys and many of its peers, they would not say no to large transformation deals. They just signed a deal with NHS out of the UK, $1.6 billion. So, no matter how much AI and automation there is maybe deployed in this part of that deal, there’s still a need for people. And we saw them have an uptick in headcount growth in this past quarter, which it’s an indication to monitor, see if because of such large use, how they make that pivot, would they continue to keep the revenue per employer that $60,000 mark more or less, or it’s going to start trending down because it keeps start adding people again? I think they want the former, they don’t want the latter. And we also need to keep an eye on how much is their margin evolving, how is their margin evolving as well. So certainly markers that we kind of like, you know, are keeping an eye on for, but as I said, they have the right ingredients, they have the right experience. And I think, you know, we’d probably see in the next five years a more sustained performance when it comes to revenue per employee, more sustained non-linearity from the likes of Infosys and we know what others are trying, but I think Infosys probably has a little bit more of that edge at the moment, just given that their size is not as large as maybe their closest competitors from a people perspective, yet their pipeline is pretty robust overall, and the trust they have in the ecosystem is pretty strong.

Patrick: Yeah, I think for the next few years, one thing that- so I’ve always thought revenue per employee is one of the most important ways of looking at an IT services company or a consultancy. 

Boz: Yeah.

Patrick: And I think for the next few years, we’re going to need to look at the consistency and the trajectory of those for all the companies we look at. And then we’re eventually going to have to start considering revenue per-

Boz: Digital worker.

Patrick: Digital worker, right. That’s going to complicate things, but I think it’ll be fascinating. 

Boz: Yeah.

Why clients choose Infosys

Patrick: I want to put a pin in marathon as well and come back to that in a second. But I want to combine two things you’ve talked about. One was Infosys Consulting, and I fully understand they’re not doing, you know, McKinsey, BCG-like strategy consulting. Got it. Another thing is, you mentioned that there were clients at this event. So, one way that, because we’ve seen IT services companies try to get into consulting, it almost never works. But understand why they do it and the business logic behind it. And we also understand what all the hurdles are and why they can’t overcome them. But one way we would be able to measure how well a company, an IT services centric company, has been able to develop its consulting capabilities is when clients themselves say, we, in this case, it would be, we started with Infosys Consulting and they helped us and then we developed. So when clients talked about why Infosys, I’m guessing Infosys Consulting did not come up, or maybe it did, but when they did talk about why Infosys, what did clients say was the why behind choosing Infosys as the company they wanted to work with, other than the fact that they were in beautiful San Diego?

Boz: That definitely helps. But I think the motto is not just Infosys Consulting in a vacuum. Infosys Consulting is attached with the delivery. Infosys Consulting is attached with, kind of like the two in a box, three in a box model, as I mentioned. That helps them to be a little bit more looking through multiple angles and be a little bit more strategic about it. 

Why Infosys? I think, as we all know, clients are price sensitive. So having the right mix of onshore and offshore effort and the right scale of that effort to be supported by enables Infosys to drive, you know, to have a good conversation starter. But I think it’s also, because you can argue the same thing with some of its direct competitors have a similar scale and whatnot, but I think it’s the fact that how they’re trying to make the discussion around the risk sharing part of it, and trying to be a little bit more like proactive around taking, absorbing some of the initial cost on their own and trying to be a little bit more proactive from that perspective. And service quality, client use cases, client references, this is huge. Partners, I mean, as I mentioned, there were a lot of partners on site, they had partner day as well as part of the conference. And partners still do see a lot of value of working with Infosys because that consistency I go back to, I think it’s consistent teams that when you have on a staff from a staffing perspective, I think helps a lot. And I guess that goes back to the culture, leadership, and soon and so forth. And again, Infosys has not been immune to not having leadership departing. I mean, don’t get me wrong, everyone is experiencing that. But I think it’s really about consistent execution, proactive risk sharing discussions and showing actually they do it, and at the same time, investing for innovation and trying to be a little bit more like, let us show you we can do more something together, and we can demonstrate that for you and be a little bit more from that. 

Because I mean, to a degree, you know, this is kind of the model that professional services companies do. But I think for someone like Infosys is, again, that humbleness, again, falling back on that word over and over, but that helped them to pave a way, essentially, for continuation of the relationship and that stickiness. Because while Infosys was doing that, many of its peers were testing different methods and different strategies. And I think that kind of puts their opportunities a little bit more behind, and Infosys is not taking advantage of its position, essentially. It could be a double-edged sword, because if you push too much and you’re not in your own swim lane, clients can recognize that very quickly. And the good thing about Infosys is that they tried to do things that are not in their own swim lane 5+ years ago, and I think they have learned those lessons the hard way, and now they’re very careful how they manage that moving forward.

Patrick: Right, and if they can continue to balance that consistent execution, a willingness to be flexible around risk-taking, and then bringing actual innovation, I think that’s- if you can actually manage those three things and deliver all three of those things, I mean, that definitely will set them apart. 

Stand out partnerships

Two more questions. First, maybe the easy one. Were there certain partners that stood out, certain technology partners they had there that sort of stood out in terms of your understanding of their relationship with Infosys and how that might be a little bit different?

Boz: Yeah, I think so. I think from kind of the entire spectrum, so HPE was definitely, you know, HPE is a partner that it’s a very strong relationship with Infosys. And it’s interesting to think about everyone, and they push so much with Infosys Cobalt in the cloud, but HPE presents an opportunity to bridge those on-prem and kind of like, hybrid cloud environment with GreenLake so, there’s a lot of discussions around that. AWS; very strong relationship as well. ServiceNow, SAP, I would say the SAP relationship has evolved over the last year. They are one of the few partners that they got the validated partner for RISE with SAP. And we’re in the middle of actually producing our SAP and Oracle and Workday Ecosystem Report, where we’re having that discussion as part of it. So, they are one of the few, and that kind of provides that testimonial of ongoing relationship and trust. Some good use cases were shared around the SAP relationship during the conference as well. And that’s just kind of like just a few that kind of come to mind, that were on-site and we heard of as well.

Patrick: It’s good. And one thing we should probably come back to is to have a chat about that SAP Oracle Workday Ecosystem Report. 

Boz: Yeah.

Infosys’s sports alliances

Patrick: So, last question, which you know is not the last question, because I’ll always ask you one more, but you mentioned Marathon. So, it seems like every … IT services company and even every tech company now has some marquee sports related alliance relationship with a client. Lenovo with F1, PwC with F1. It seems like countless examples. So, what’s Infosys’s game in the sports world?

Boz: Tennis. 

Patrick: Tennis?

Boz: Tennis, yes. Tennis is their big thing. They do have a very strong relationship with ATP. I mean, you can see they’re sponsoring a lot of the stats with Australian Open and the Roland Garros. They do have Iga Świątek, you know, the Polish, you know, national who is the number one for women. She’s one of the ambassadors. Rafa Nadal, he’s the ambassador for Infosys brand as well. They actually had Martina Navratilova speaking at the event in San Diego. So, tennis is their, I would say, top sport. I mean, they do have partnerships with MSG in New York as well, so the Knicks, the Rangers, all the sports that are playing in MSG so- but tennis is probably the number one.

Patrick: So next year, is it going to be the event will be at Roland Garros, will it be at Wimbledon, will it be at-

Boz: Well, I know they do host the APAC one in conjunction with the Australian Open. 

Patrick: Oh, nice.

Boz: So, for the APAC Confluence, yeah.

Patrick: Okay. Alright, we’ll get your tennis knowledge up to speed.

Boz: I’m all for it. I’m all for tennis. I’m a big tennis fan, so yes.

Final thoughts

Patrick: Now the last question, and I know because I was on a trip at the same time you were with Infosys. I was in New York City having probably the best sushi I’ve ever had in my life. So, what was the best thing that you ate on your trip to California?

Boz: That’s a great question. Like I said in the beginning, the venue was fantastic. The organization was phenomenal. I mean, just the food choices were probably one of the better food choices I’ve had at those events. You know, just I felt like it was thought through every single possible dietary restriction and choice and whatnot. I got some goat curry.

Patrick: It was good.

Boz: I liked it. 

Patrick: Okay.

Boz: Yes. I mean, I like Indian food, so yeah, it was definitely something different to try. Yeah. So, it was very tasty.

Patrick: Okay, wow.

Boz: And it wasn’t the only good food. That just comes to mind. That was something, you know, that you don’t get goat curry every single conference, you know?

Patrick: I had squirrel fish at a conference I went to. 

Boz: There you go.

Patrick: So yeah, you don’t get the same thing every time, which is nice, which is really nice. Boz, thank you so much. We will do this again soon to talk about some of the ecosystem reports.

Boz: Thank you.

Patrick: Thanks. 

Next week, I’ll be speaking with Angela Lambert and Ben Carbonneau about NVIDIA GTC. Don’t forget to send us your key intelligence questions on business strategy, ecosystems, and management consulting through the form in the show notes below. Visit tbri.com to learn how we help tech companies, large and small, answer these questions with the research, data, and analysis that my guests bring to this conversation every week. 

Once again, I’m your host, Patrick Heffernan, Principal Analyst at TBR. Thanks for joining us, and see you next week.

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