Infosys CEO Nandan Nilekani takes exception to media reports that India's outsourcing industry is rife with data thieves and hackers. During a conversation I had with Nilekani Wednesday morning, the chief of India's second largest outsourcer insisted that information security in his country is at least as strong as it is in the United States, and that hacking and identity theft are global problems.I was speaking with Nilekani after Infosys released stellar second-quarter earnings. The company's revenue was up 42.4%, and earnings jumped 44%. But last week, the U.K.'s Channel 4 network aired a documentary that claimed some workers in India's outsourcing industry are willing to hand over sensitive customer data in exchange for cash. I asked Nilekani if such reports could endanger the future growth of Infosys and other Indian outsourcers. "I don't think the story will have any impact," was Nilekani's response, delivered without hesitation.
Given that the Channel 4 report made headlines around the world, Nilekani's answer surprised me somewhat. But he's confident that potential customers who perform in-depth due diligence on Infosys will find that there's little cause for concern. "We have extremely high security standards, and we are constantly doing reviews and audits by third parties," said Nilekani.
He believes other major outsourcers in India are equally fastidious about protecting customer data--and with good reason. "This is a multibillion-dollar business for us. We certainly cannot afford any risks to our credibility or have our trustworthiness impugned in any way," Nilekani told me. In other words, outsourcing is India's golden goose, and the industry isn't about to let it be killed off by security breaches.
Nilekani also pointed out that data theft happens everywhere, including the U.S. "This hasn't happened in India alone," he said. He's right about that. A Google search on "data breaches" will turn up hundreds of cases--in the U.S. alone. So what's all the hysteria about? Exposing corruption in far-off India makes good headlines, in the same way that stories about hunger in Africa get more ink than reports on domestic poverty. But reality goes much deeper than a headline or a sensationalistic documentary.