Wipro Infotech, the services arm of the IT behemoth, recently announced a foray into the A-PAC region. While this move will give the company access to new markets, it will also pit it against biggies such as IBM, EDS and Compaq, says Pankaj Mishra

Ramesh believes the company’s quality-centric approach will help it beat the competition

Having dominated the $1.5 billion Indian IT services market for over a decade, Wipro Infotech, the domestic arm of the Rs 30,922 million Wipro group, now plans to repeat the feat in the Asia-Pacific region. While this move will effectively propel the company into the big league, it will also put it into direct competition with some of the biggest names in the game such as IBM, EDS and Compaq. Notwithstanding the intense competition, the company says the region will account for a significant chunk of its revenues within the next three years.

The professional services division of the company offers infrastructure, consulting, system integration and availability services. According to official sources, the company is in the process of formulating a ‘vertical strategy’ encompassing government, telecom, finance, healthcare and IT enabled services in the A-PAC market. As part of this gameplan, the company plans to leverage its existing alliances with Computer Associates, Sun Microsystems, Cisco and Microsoft to lay inroads in the market. This strategy is expected to pay rich dividends as most of these players have already established themselves in the enterprise market giving Wipro Infotech access to a huge clientele. The company is believed to have already clinched a few deals in the region and many more are in the pipeline. Says H R Ramesh, chief executive-professional services, Wipro Infotech, “At present we cannot disclose the identity of clients except the Dubai e-governance project we clinched recently. The project has to be executed over a period of six months and we are hoping to expand the volume.” He declined to comment on the value of the project, which includes managing a data centre and software to facilitate e-governance. China is yet another lucrative market which Wipro may look at, but there are no immediate plans. With entrenched players like IBM, EDS and Compaq in the A-PAC region, creating a brand equity equivalent to the biggies will be an uphill task for the company. Moreover, companies like IBM already have successful product lines to augment their services thrust.

The company has recently witnessed substantial growth in revenues accruing from professional services, which now account for 32 percent of the pie as against 23 percent sometime back. Moving forward, Ramesh wants services to account for fifty percent of its revenues. “We are looking at a business model on the lines of IBM wherein products and services would account for equal revenues,” admits Ramesh. The company is particularly bullish on the company’s relationship with Computer Associates. “We are working closely with CA in the A-PAC region and would like to enhance other alliances,” says Kiran Rao, manager-marketing, Wipro Infotech. At present, the professional services division of Wipro consists of around 900 professionals. According to Ramesh, the company might require another six professionals for various business segments in order to justify the new vertical strategy. In A-PAC, the company would be catering to Australia, Singapore, Taiwan, Hong Kong and Dubai. Rao further states that Singapore will be the marketing hub for Wipro Infotech’s A-PAC foray.

“We are confident of taking on the competition owing to our intensive quality centric approach in delivery processes. We were recently awarded ISO 9001:2000 for the facilities management division,” says Ramesh. At present, the company is earning all its revenues (Rs 1,880 million) from the Indian market. In India, the company already has a client base of 170 customers including HDFC, UTI, ICICI, Citibank and Infosys. Ramesh adds, there are instances of overlap with Wipro Technologies, especially in the area of system integration. A good example is the latest project bagged by Wipro Technologies from the Lattice Media Group, Australia, which involves system integration. But Wipro Infotech wants to leverage the proximity with Wipro’s overseas arm in developing new markets. “Australia is the most lucrative market in the A-PAC region, estimated to be around $12 billion market,” says Rao.

While it is logical for a company like Wipro Infotech to benchmark IBM’s business model, it will require more than services to replicate the same saga. IBM for example, has achieved substantial mindshare in the minds of enterprise customers with its innovative products backed by a consulting approach, which includes a lucrative services component. Now, IBM is looked upon by the customers as a ‘vendor neutral’ consultant. This said, Wipro Infotech has a daunting task ahead, both in taking on the competitors like IBM and Compaq, as well as moving up the value chain to be looked upon as an end-to-end solutions provider.