In 1981, a group of seven engineers working at a small computer services firm in Pune decided to build their own business. At the time, it was incredibly hard to set up a business in India due to the excessive red tape. They realised the potential of software development services and started Infosys. The initial capital was $250 (around $700 in today's money), which Mr. Narayana Murthy borrowed from his wife. This tiny sum only kept the company going for a short time, but Mr. Narayana Murthy relied on spending less than what they earned, to remain profitable from the start. "We stayed in very inexpensive hotels… we didn't have any cars, sometimes we took buses, sometimes we walked," he says. "It was tough." It was not until two years later that they were able to buy their own computer.
When Infosys was first launched, they worked solely with one customer, developing and installing a software package for the client's business in New York. Mr. Narayana Murthy was instrumental in rallying the group after the business had failed to take off and everyone was looking to quit. They stuck together and grew slowly over the next few years. They moved their headquarters to Bangalore, setting up shop in what would go on to become India's Silicon Valley. It was only in the 1990s, when economic reforms were introduced, that Infosys experienced accelerated growth. "We could travel abroad, we could travel easily, we could get consultants from outside, we could import - all of that," says Mr. Murthy. They were able to fulfill the need for customised software that was prevalent at the time, and took advantage of India's growing pool of software engineers to provide solutions for US-based companies.
In 1993, Infosys listed on the Indian exchanges and was among the first in India to introduce the employee stock-option plan, a move to attract and retain talent. In 1999, Infosys became the first Indian company to list on the Nasdaq, raising the profile of the Indian outsourcing industry in the United States.