New Delhi: Faced with lower revenues from its software products business, IT services major Infosys has hived off its products and platform business into a separate subsidiary -- Edgeverve Systems Ltd.
The Infosys subsidiary -- incorporated in February this year -- will focus on developing products and platforms.
"On February 14, 2014, we incorporated a wholly-owned subsidiary, Edgeverve Systems Ltd and invested less than USD 1 million in the subsidiary. Edgeverve is expected to focus on developing and selling products and platforms," Infosys said in a US SEC filing.
The filing further said: "On April 15, 2014, the Board of Directors of Infosys has authorised the company to execute a Business Transfer Agreement and related documents with Edgeverve, subject to securing the requisite approval from shareholders in the ensuing Annual General Meeting scheduled on June 14, 2014."
Set up in 2011 as part of the Infosys 3.0 strategy, the company was aiming to get at least one-third of its revenues from intellectual property-based software products, platforms and solutions by 2020.
However, analysts feel the PPS unit has not performed as expected with the exception of Finacle core banking unit.
On revenues from software products, Infosys said: "We also generate revenue from software application products, including banking software. Such software products represented 3.6 percent, 4 percent and 4.6 percent of our total revenues for fiscal 2014, 2013 and 2012, respectively."
The firm had reported revenues of USD 8.25 billion, USD 7.4 billion and USD 6.99 billion for 2013-14, 2012-13 and 2011-12 fiscals.
According to Infosys' 2012-13 annual report, products, platform and solution business (PPS) contributed 5.7 percent of Infosys' total revenues of USD 7.4 billion. It secured 51 deals in the same period.
The firm had also announced investing up to USD 100 million in the business, which focuses on higher revenues from innovation and IPR (Intellectual Property Rights).
During October-December of 2013-14 fiscal, Infosys won 14 deals - eight for platforms and six for products. It had also launched TradeEdge, a platform for the retail segment.