Posts Tagged ‘Wipro’

Wipro gains at IBM’s expense in Bharti deal

April 3rd, 2014

Indian IT companies have taken big chunks of a large technology outsourcing contract that has been sliced up by Bharti AirtelBSE -1.17 % into four parts, leaving IBM with only a portion of a deal it completely owned for a decade. Outsourcing36

WiproBSE 0.03 % is a big beneficiary from the renegotiation of what used to be regarded as the defining technology outsourcing contract in India – at nearly $300 million a year over 10 years, it represented a bold choice by Bharti Airtel to entirely outsource its IT needs, and for IBM it was its most lucrative deal in India.

A Mumbai-based company is close to winning one of the carved-out portions while Bharti Airtel is yet to take a decision about a part dealing with its wireline operations, according to several people familiar with the negotiations.

In a joint statement on Wednesday, IBM and Airtel said they have signed a new pact, this time for five years, with Big Blue selected to manage the IT infrastructure and applications for Airtel’s operations in India.

Sources said that the new deal is worth $500-550 million ( 3,000-3,300 crore) a year for IBM. Moreover, while under the previous contract IBM would get a share of annual Bharti Airtel revenue, the new one is based on usage.

“Wipro has won the network maintenance part of the contract,” a highly-placed source with direct knowledge of the matter told ET. The source declined to give the size of the deal that Wipro had won and ET could not independently ascertain the size of the deal. Wipro declined to comment.

The Airtel-IBM contract has acquired a high profile for several reasons. Besides the nature of the deal and its size, it is a marquee one for the US company – it was a forerunner to the two other ‘strategic outsourcing’ contracts from Idea CellularBSE 0.52 % and Vodafone. Analysts are of the view that IBM will have a lot of convincing to do when the deals with Idea and Vodafone come up for renewal in 2017 and 2019, respectively. Such was the importance of the Airtel contract for IBM that its CEO Virginia Rometty visited India to persuade Sunil Bharti Mittal. The previous 10-year deal lapsed on March 31.

A source told ET that the fundamental difference between the last time and the current deal was that the telecom giant would retain significant control over the operations. “Airtel wants to chart out the strategy and the direction based on the company’s overall goals and targets, it wants to rely on its IT partners only for execution,” the person said.

Airtel declined to comment on whether Indian IT firms had won parts of the contract.

Source:http://economictimes.indiatimes.com/tech/ites/wipro-gains-at-ibms-expense-in-bharti-deal/articleshow/33150688.cms

Wipro looks at new acquisition target to fire its automation drive

February 10th, 2014

Wipro, India’s third-largest IT services exporter, has intensified its search for an acquisition target that will help increase its level of automation besides delivering a business solution in the market place. The IT firm is looking at a target acquisition that deals with advanced technology areas such as mobile, analytics, social and cloud.outsourcing53

Talking to FE, Satishchandra Doreswamy, chief business operations officer, Wipro, said, “We continue to look at these options and there is a continuous evaluation. There are multiple areas we are looking at which may either relate to the areas of business or technology.”

Wipro’s inorganic strategy over the last two years has witnessed them getting access to different kinds of technologies. In April 2012, it acquired an Australian firm Promax Applications Group (PAG) for A$35 million, giving it a strong foothold in the analytics space. Similarly, it acquired a US-based company Opus CMC in December 2013 for $75 million, providing them access in the mortgage space of the financial services sector.

However, the IT major has also gone about making strategic investments by picking up minority stakes in companies which will provide them the edge in emerging technology areas. In May 2013, it made a strategic minority investment of $30 million in another US-based big data analytics firm Opera Solutions.

On the various kinds of acquisitions made by Wipro, Doreswamy said, “We want to have access to these types of technologies which will help us innovate, integrate with our solutions and also build new things together.”
Wipro has been on the drive to automate its various business processes which not only brings in higher internal efficiencies but also the ability to showcase at the marketplace of the various business solutions they are able to bring to the table.

The traditional model of IT outsourcing and offshoring has witnessed a rapid change where the market is demands that they not only deliver a service but also provide them with a technology solution to their business problems.
Doreswamy said that some of new technology platforms built by them like ServiceNXT or FixOmatic leading to higher automation has resulted in a 20-30% uplift in their productivity. “Automation is becoming a key portion of our strategy,” he remarked.

The automation drive within Wipro has resulted in it becoming an important contributor towards improving the operating margins (OPMs) of the company. At the end of Q3FY14, it reported an OPM of 23%, a rise of 3% in the last nine months and the aim is to take it even higher.

The automation drive and building new technology solutions has also helped Wipro in bagging new deals in the market. Doreswamy said that it has helped in converting numerous business deals and they are positioning automation as one of its key strategic advantage.

Wipro is now ensuring that in the all new businesses being generated, automation, coupled with IT solutions & platforms, would act as a key differentiator. It is not only implementing the various new technologies in the way they deliver their services but also create solutions which would cater to different business verticals.

Source:http://www.financialexpress.com/news/wipro-looks-at-new-acquisition-target-to-fire-its-automation-drive/1224471/0

IT companies TCS, Infosys, HCL and Wipro in good spirits over buzz of discretionary boost

January 8th, 2014

Early indications are that 2014 will see an acceleration in spending on information technology outsourcing, which should be visible in the deal wins and commentary as Infosys kicks off the fiscal third-quarter earnings season on Friday. Most industry executives are gearing up for a pickup in discretionary projects as well, in the quarters to come, which are good-to-have but not vital to day-to-day operations.outsourcing35

“The demand environment will be solid, and discretionary spending particularly in the area of digital transformation,” said Ganesh Natarajan, CEO of Punebased Zensar Technologies. “I expect investments in cloud, mobility, analytics and big data to substantially accelerate in 2014 and beyond,” he said.

Spending on discretionary projects is a good indicator of demand.

“We are bullish on the IT services sector, demand remains good in the US and broadly speaking, it is looking better in 2014 compared with 2013,” said Apurva Shah, senior portfolio manager at BNP Paribas Mutual Fund.

While there will be specific challenges, such as the ongoing US immigration overhaul, which could potentially make it more difficult and costly for the Indian IT companies to get visas and outplace consultants, the strongest correlation is with IT spending, Shah said. The fund has an ‘overweight’ view on the sector.

“I think the discussions are encouraging, but we will have to see for them to be able to transfer into budget and the spend for next year, but yes, definitely the early signs are very, very encouraging,”

“In the US, there’s a lot of positive mood,” N Chandrasekaran, chief executive at India’s largest software services provider, Tata Consultancy Services, told reporters last month. “We expect discretionary spending next year to see an uptick based on the conversations we have had.” Even Infosys, which is attempting to regain its growth momentum after lagging the industry in recent times, is more confident of a pickup in spending, and analysts are expecting the company to raise its full-year forecast.

Many analysts expect Infosys to raise its dollar-terms sales forecast for the year ending March 2014 to as much as 12% from the current 9-10%. That matches the lower end of the 12-14% growth forecast by industry lobby Nasscom for the $108 billion sector’s exports. “The discretionary spend, which has kind of disappeared from the market in the last two to three years seems to be coming back,” Rajiv Bansal, Infosys’s CFO told investors at a conference organised by US bank Wells Fargo, about half way through the quarter that ended December 31.

“I think the discussions are encouraging, but we will have to see for them to be able to transfer into budget and the spend for next year, but yes, definitely the early signs are very, very encouraging,” Infosys chief financial officer said.

Typically, the three months ended December 31, are seen as a seasonally weaker period for earnings. Workers go on furloughs, especially among manufacturing clients, and projects see little action during the period from Thanksgiving to until after new year’s day in the export-driven sector’s largest markets, the United States and Europe, including Britain.

Revenue for the top five Indian IT firms will grow between 1.1% and 3.7% in the December quarter compared with the previous three months, Pratik Gandhi, an analyst with IDBI Capital Markets wrote in a note to clients.

Gandhi expects fourth-ranked HCL Technologies to report the highest growth at 3.9%, driven by strong demand for its services remotely managing large data centres while he expects Infosys to post the lowest growth at 1.1%.

Source:http://articles.economictimes.indiatimes.com/2014-01-07/news/45955327_1_rajiv-bansal-infosys-chief-financial-officer-largest-software-services-provider

Weak demand may take a toll on IT stocks in near term

January 1st, 2014

Amid the slow growth in the broader economy and slump in capital investment, information technology (IT) was among the few sectors that kept investors’ spirits high in 2013. But 2014 does not appear to be as smooth to begin with. Outsourcing10

While the medium-term scenario continues to look bright for the sector, the second half of the fiscal is historically of weak demand. This may put some pressure on IT stocks in the near-term, considering their higher current valuations.

Each of the five top-tier IT players — including TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra — along with some oWeak demand may take a toll on IT stocks in near termf their mid-tier counterparts such as Hexaware Technologies, Infotech Enterprises, KPIT Technologies, Mindtree and Persistent Systems that are listed on Indian bourses, earned robust double-digit returns in 2013.

Led by these stocks, the 20-member ET Infotech index gained 56% compared with meager 5-8% returns of the benchmark indices such as the S&P BSE Sensex, CNX Nifty, and ET 100. A gradual revival in the outsourcing demand in the US and the European market helped Indian IT players to resume on the growth path.

A sharp fall in the rupee against the major currencies during the first half of the fiscal further boosted the top line growth and operating margins.

Majority of the companies mentioned above have garnered 58-62% of their FY13 revenue in just the first six months of the current fiscal.

This strong momentum in the business is reflected in their valuations, which have soared sharply compared with their year-ago levels as shown in the table.

It may, however, not be an easy task to retain and further grow these stock valuations on account of two factors that may not turn in the favour of IT players in the near term.

First, the December and the March quarters are traditionally weak for IT companies due to the festive holidays and the annual exercise carried by client firms to ascertain IT budgets for the next year. IT players typically report a sequential volume growth of 1.5-3% during this period, compared with more than 3% increase in the first two quarters.

The second factor is the currency movement. As seen in the December quarter, the rupee has more or less stabilised on an average. Some of the currency market observers have predicted this trend to continue in the remainder of the fiscal.

If that happens, India IT players will not be able to enjoy higher top lines, unless a major depreciation in the rupee takes place. Both these factors are likely to curb the pace of growth in the remainder of FY14, which may impact valuations in the nearterm considering the facts that valuations have soared at a faster pace in recent months.

Source:http://economictimes.indiatimes.com/markets/analysis/weak-demand-may-take-a-toll-on-it-stocks-in-near-term/articleshow/28156757.cms

Higher growth returns to Indian IT industry

December 26th, 2013

The resilient USD 270-billion plus Indian IT industry returned to the higher growth trajectory in 2013 and is hoping to gain momentum in the ensuing year for a greater share of the global multi-billion dollar outsourcing market.Outsourcing7

Putting behind a turbulent 2012, the industry consolidated its presence in the software services sector, with its top four IT bellwethers – TCS, Infosys, Wipro and HCL – posting better results to register a healthy 12-14 percent growth thus far as against 10 percent last fiscal (2012-13).

“We have seen a significant increase in global technology spending this year, creating opportunities for the Indian software services sector to post double digit growth again in export as well as in the domestic markets,” a top industry representative said.

The National Association of Software and Services Companies (Nasscom) is expecting the industry to clock export revenues of USD 84-87 billion this fiscal (FY 2014) as against USD 76 billion last fiscal (FY2013).

In the Indian market, the industry is, expected to grow marginally year-on-year at 14 percent to post Rs.1.2 trillion (USD 185 billion) this fiscal from Rs.1.05 trillion (USD 160 billion last fiscal.

“We have decided not to revise our estimates and stick to the 12-14 percent growth forecast for this fiscal though the sector has faced headwinds due to slow recovery in its major export markets – the US and Europe,” Nasscom’s outgoing president Som Mittal told IANS.

The Indian IT industry comprises domestic firms, captive centres of multinationals, global industry classification standards (GICs) and industry sectors providing software and hardware services, business process outsourcing (back office operations), engineering and research and development (ER&D) and products.

The highlight of the year is the return of the industry’s icon and Infosys co-founder N.R. Narayana Murthy as executive chairman in June to put the global software major back into reckoning after it was found faring behind its peers due to combination of factors.

Though Murthy, 67, came back from retirement to revive the company’s fortunes, bringing his son Rohan Murthy as his executive assistant, the USD 7-billion Infosys also saw eight of its top executives, including two board directors quitting the company in search of greener pastures.

The year also saw Infosys competitor, Wipro Ltd hiving off its non-IT business in April into a separate enterprise by de-merging its consumer care & lighting, infrastructure engineering and medical diagnostic product & services business from its global software services and products business.

Keeping pace with disruptive technologies and new delivery platforms, the industry has diversified its service offerings to analytics, mobility, cloud, social media and emerging verticals such as healthcare and medical devices.

“India is the only country to offer such a wide range of offerings spanning IT services, BPM (business process management), engineering, R&D, internet and mobility and software products. The internet and mobile platforms are enabling the development of low-cost products not only for enterprises, but also consumers and citizens,” Mittal asserted.

The industry is also investing in technology and talent to explore opportunities like smart computing, anything-as-a service and the small and medium businesses.

“The domestic market is also maturing and is one of the fastest in the developing countries, thanks increasing role technology is playing in transforming delivery of diverse services in the government and private sector,” Mittal noted.

Though attrition remained higher than last year, especially among the bellwethers, campus hiring and fresh offers declined during the year, as companies consolidated operations than invest in human capital to make more techies sit on the bench waiting for new projects.

The industry added 188,000 jobs last fiscal, taking the total number of direct jobs to three million.

“The industry has once again demonstrated resilience and agility. As technology has become an integral enabler for growth across sectors, we are evolving and innovating to become a strategic partner to our customers. The thrust is to offer IP-led solutions over multiple platforms, which are transformative in nature,” Nasscom chairman and TCS chief executive N. Chandrasekaran said.

Highlights of 2013:

-Software exports to grow 12-14 percent to clock USD 84-87 billion

-Domestic market to also grow 14 percent to USD 185 billion

-N.R. Narayana Murthy returns to Infosys as chairman

-Eight top executives quit Infosys in six months

-Wipro hives off non-IT business as separate enterprise

-Industry diversifies into offering new services & products

-Campus hiring and fresh offers dip despite higher attrition

-Thrust on providing IP-led solutions on multiple platforms

Source:http://www.smetimes.in/smetimes/news/top-stories/2013/Dec/26/yearender-higher-growth-returns-to-indian-it-industry.html

How will be 2014 for Indian IT industry

December 26th, 2013

The resilient $270-billion plus Indian IT industry returned to the higher growth trajectory in 2013 and is hoping to gain momentum in the ensuing year for a greater share of the global multi-billion dollar outsourcing market.Outsourcing29

Putting behind a turbulent 2012, the industry consolidated its presence in the software services sector, with its top four IT bellwethers – TCS, Infosys, Wipro and HCL – posting better results to register a healthy 12-14 percent growth thus far as against 10 percent last fiscal (2012-13).

“We have seen a significant increase in global technology spending this year, creating opportunities for the Indian software services sector to post double digit growth again in export as well as in the domestic markets,” a top industry representative said.

The National Association of Software and Services Companies (Nasscom) is expecting the industry to clock export revenues of $84-87 billion this fiscal (FY 2014) as against $76 billion last fiscal (FY2013).

In the Indian market, the industry is, expected to grow marginally year-on-year at 14 percent to post Rs.1.2 trillion ($185 billion) this fiscal from Rs.1.05 trillion ($160 billion last fiscal.

“We have decided not to revise our estimates and stick to the 12-14 percent growth forecast for this fiscal though the sector has faced headwinds due to slow recovery in its major export markets – the US and Europe,” Nasscom’s outgoing president Som Mittal told IANS.

The Indian IT industry comprises domestic firms, captive centres of multinationals, global industry classification standards (GICs) and industry sectors providing software and hardware services, business process outsourcing (back office operations), engineering and research and development (ER&D) and products.

The highlight of the year is the return of the industry’s icon and Infosys co-founder N.R. Narayana Murthy as executive chairman in June to put the global software major back into reckoning after it was found faring behind its peers due to combination of factors.

Though Murthy, 67, came back from retirement to revive the company’s fortunes, bringing his son Rohan Murthy as his executive assistant, the $7-billion Infosys also saw eight of its top executives, including two board directors quitting the company in search of greener pastures.

The year also saw Infosys competitor, Wipro Ltd hiving off its non-IT business in April into a separate enterprise by de-merging its consumer care & lighting, infrastructure engineering and medical diagnostic product & services business from its global software services and products business.

Keeping pace with disruptive technologies and new delivery platforms, the industry has diversified its service offerings to analytics, mobility, cloud, social media and emerging verticals such as healthcare and medical devices.

“India is the only country to offer such a wide range of offerings spanning IT services, BPM (business process management), engineering, R&D, internet and mobility and software products. The internet and mobile platforms are enabling the development of low-cost products not only for enterprises, but also consumers and citizens,” Mittal asserted.

The industry is also investing in technology and talent to explore opportunities like smart computing, anything-as-a service and the small and medium businesses.

“The domestic market is also maturing and is one of the fastest in the developing countries, thanks increasing role technology is playing in transforming delivery of diverse services in the government and private sector,” Mittal noted.

Though attrition remained higher than last year, especially among the bellwethers, campus hiring and fresh offers declined during the year, as companies consolidated operations than invest in human capital to make more techies sit on the bench waiting for new projects.

The industry added 188,000 jobs last fiscal, taking the total number of direct jobs to three million.

“The industry has once again demonstrated resilience and agility. As technology has become an integral enabler for growth across sectors, we are evolving and innovating to become a strategic partner to our customers. The thrust is to offer IP-led solutions over multiple platforms, which are transformative in nature,” Nasscom chairman and TCS chief executive N. Chandrasekaran said.

Highlights of 2013

-Software exports to grow 12-14 percent to clock $84-87 billion

-Domestic market to also grow 14 percent to $185 billion

-N.R. Narayana Murthy returns to Infosys as chairman

-Eight top executives quit Infosys in six months

-Wipro hives off non-IT business as separate enterprise

-Industry diversifies into offering new services & products

-Campus hiring and fresh offers dip despite higher attrition

-Thrust on providing IP-led solutions on multiple platforms

Source:http://indiatoday.intoday.in/story/how-will-be-2014-for-indian-it-industry/1/332837.html

Wipro partners with US firm to service global insurers

September 9th, 2013

Indian IT bellwether Wipro Ltd has tied up with the US-based Kana Software to provide customer service solutions to its global insurers through a joint development centre, the company said Saturday.

“As a strategic partner, we have been certified to use Kana’s technology for enhancing customer service of its global insurers through our joint development centre,” the global software major said in a statement here.

The partnership also provides Kana with systems integration scalability, as Wipro has presence across 57 countries worldwide.

The partners have built a dedicated team to deploy the solutions and support the insurers with business process outsourcing and managed services.

Located at Silicon Valley in California, Kana provides customer service solutions using cloud computing (on-demand) network to about 900 large enterprises and mid-market organisations, including 250 government agencies the world over.

“The insurance industry is going through a paradigm shift in customer service space due to the advent of the web, mobile and social channels, which have created a connected world in place of the traditional way of servicing through advisors, intermediaries and contact centre agents,” Wipro vice-president Nagendra Bandaru said in the statement.

According to the company’s market survey, about 60 percent of insurance customers are ready to switch over from their respective insurers due to poor customer service.

“With Wipro’s global presence and domain expertise, we will help insurers address the growing demand for quality customer service,” Kana chief executive Mark Duffell said in the statement.

Through its insurance practice division, Wipro works with 35 global insurers, including property and casualty carriers and health insurance providers and life, annuity and pension carriers.

Source:http://www.smetimes.in/smetimes/news/industry/2013/Sep/09/wipro-partners-with-us-firm-to-service-global-insurers.html

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