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Infosys Acquires Panaya For $200M: Is This Sign Of A Revolution In Outsourcing Industry?

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Indian IT services major Infosys is acquiring automation technology firm Panaya for an enterprise value of $200 million in a all cash deal. New Jersey based Panaya is a Software as a Service (SaaS) company which provides cloud based quality management services for enterprise applications, globally.

Panaya

This small 50 member firm has been described as a disruptive technology creator in the automation domain, and their clients include Mercedes Benz, Sony and Unilever among others. Panaya was founded in 2005, and have been ranked among the top 100 technological firms in the USA and within top 10 in Israel.

Under Vishal Sikka, this is Infosys’s first major acquisition, the last one being acquisition of Zurich-based Lodestone Holding in September 2012 under Narayan Murthy.

The statement issued by Infosys said, “Panaya’s acquisition reflects Infosys’ execution of its Renew and New strategy to enhance the competitiveness and productivity of current service lines by leveraging automation, innovation and artificial intelligence,”

Is This A Signal of a New Change in Outsourcing Industry?

Panaya is the creator of a flagship product called “The Panaya CloudQuality Suite”, which basically automates the quality testing tasks which were traditionally done by humans. Using this tool, Infosys can introduce SaaS based automation to its service lines, which will assist them in reducing costs, risks and shortening delivery time for their clients.

Providing a glimpse of the future work model in Infosys, Vishal Sikka said about this acquisition: “This (Panaya acquisition) will help amplify the potential of our people, freeing us from the drudgery of many repetitive tasks, so we may focus more on the important, strategic challenges faced by our clients,”

Or in other words, the tasks which humans did in the past, will be done by a software, which will allow their employees to focus on more important strategic tasks.

Under Vishal Sikka, Infosys has been investing in new-age technology such as artificial intelligence and automation and this major acquisition signals that something big is brewing inside Infosys which can have a major impact on the current workforce standards.

Infosys chief operating officer (COO) Pravin Rao recently said that re-skilling is the key for progress in outsourcing industry, as technology becomes redundant sooner than expected, and employees need to be updated and informed.

He was sharing on his views on the issue of TCS firing, which gripped the attention of IT and ITeS industry, as he said, “It is not that there are tens and thousands of people (available) with experience in new technologies. The idea is to re-skill people. If technology changes and people don’t have those capabilities, you’ve to re-skill them and re-orient them.”

So, what change can automation and artificial intelligence bring to the outsourcing industry, which basically relies on the human mind and its unique thinking and logical power?

Humans Need Not Apply: The Future of IT & Everything

Wikipedia defines Futurology as “postulating possible, probable, and preferable futures and the worldviews and myths that underlie them”. It is a fascinating study and observation of what future lies ahead in terms of job creation, employability and the role of machines in the whole scheme of things. It is a combination of science, social science, art and history, which several presumptions and anticipated theory based on our past and present technology.

Scholars of futurology have created a video called “Humans Need not Apply”, which explains the future of jobs. As per the research and presentation, a stage will arrive in future when all our jobs would be accomplished by robots, and the requirement of humans would be completely washed out.

Martin Ford, an entrepreneur in Silicon Valley, noted Futurist and speaker has written books on this possibility where humans are entirely eliminated from the requirement to do work, and everything is managed by intelligent robots and artificial intelligence.

In an article written for Huffington Post, he says, “The problem I think we face in the future is that both the high-end jobs and the low-end jobs may erode quite rapidly as information technology advances. The key thing to understand here is that our definition of what constitutes a “routine and repetitive” job is changing over time.”

As per him, as technology advances, the requirement for human manual labor will fall down, and intelligent machines will take over all tasks. He even warns that this scenario can be scary, and we should be worried.

In 2013, an Oxford Martin School study predicted that nearly half of all jobs in USA can be computerized in the next 20 years, with special focus on transport, logistics and office roles. In case you have worked or been associated with outsourcing industry, then you can relate with the scary situation.

In the 2014 Future of Internet survey by PeW Research Center, 1896 respondents shared their vision for 2025, wherein self-driving cars are on the road, intelligent digital agents are performing tasks of a white-collar and blue-collar workers and the world is being run by robots.

Although Indian IT and Outsourcing industry is still at a nascent stage when it comes to automation and artificial intelligence, but this major acquisition of Panaya by Infosys can signal a trend, a new way of doing things.

And if we believe the futurology experts, then it will not be a perfect Happy Ending for millions of IT workers.

  1. Nithin Dev says

    Will it results, resource firing in Infosys? Not immediately or near future??

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