Posts Tagged ‘Wipro’

Infosys creates healthcare unit HILife

May 26th, 2015

In what appears to be an effort to increase its focus on healthcare, Infosys will transfer the healthcare business of its US-based, wholly-owned subsidiary Infosys Public Services to itself for a consideration of $100 million . Outsourcing4

In its latest annual report, Infosys said it has created a new business unit called HILife to provide services to healthcare, insurance and life sciences businesses. The new unit will presumably combine its existing healthcare and life sciences business, which accounts for about 7% of its overall revenue of $8.7 billion, with the healthcare business of Infosys Public Services.

The thrust in healthcare comes at a time when industry rivals like Cognizant and Wipro are aggressively focusing on the space, with Obamacare opening up outsourcing opportunities that aims to brings millions of people under the healthcare insurance fold in the US. Both healthcare providers and payers as well as life sciences customers, including pharmaceutical, biotech and medical device companies, are outsourcing work to IT service providers.
Almost a quarter of Cognizant’s revenue comes from healthcare, while for Wipro, that figure is close to 12%, both significantly higher than for Infosys. Last year, Cognizant acquired TriZetto, a healthcare IT software and solutions provider, for $2.7 billion to strengthen its healthcare capabilities. Wipro’s healthcare business is expected to touch $1 billion this fiscal.

In his note to shareholders in the annual report, Infosys CEO Vishal Sikka described the company’s full year performance as “average”. “There were hard fought battles in a difficult climate, one in which clients’ expectations are changing, new emerging technologies are rapidly coming to market and where the landscape of services companies has become vastly more competitive,” Sikka said. He said the company faced internal challenges that lagged growth and a string of senior level exits put pressure on its business and performance.

India’s second-largest IT services firm’s growth lagged those of its peers last year. Revenue grew 7.1%, just about meeting the lower end of its guidance of 7%-9%.

“When we look at Infosys today, we can see that it has been a year of great transition for the company…We are learning to work in a new environment and in new ways and it has been a difficult learning experience. But with learning comes the promise of renewing ourselves and the opportunity to pursue entirely new horizons,” Sikka said.


Indian IT firms like TCS, Infosys to gain from HP’s enterprise services cost cuts, say analysts

May 25th, 2015

Hewlett-Packard’s decision to cut $2 billion (about Rs 12,700 crore) in costs in its enterprise services business could open up opportunities for Indian technology firms such as Tata Consultancy Services and InfosysBSE -0.08 %, said analysts tracking the development. Outsourcing48

Infrastructure contracts such as HP’s $400-million data centre outsourcing deal with oil company BP in 2010 and its $700-million deal with German energy provider E.ON could be taken over by Indian firms when renewed, they said. HP’s troubled enterprise services businesses provides technology consulting, outsourcing and support services and competes with companies such as TCS, Infosys, Wipro, IBM and Accenture.

“In the infrastructure space, certainly they are being challenged by cheaper Indian providers,”said an Indian IT industry consultant, declining to be identified. “And the constant round of cost-cutting is a distraction and makes them less competitive.”

The 75-year-old company faces increasing pressure in India where its pricing is much higher than that of traditional outsourcing firms, and some shedding of contracts will happen with the split, giving Indian IT companies an opportunity to take over HP’s market share, said a second industry expert who also did not want to be named.

“HP has been in constant restructuring for a while; the whole company has been in flux,”said Tom Reuner, managing director at HfS Research. “It’s caught between two big rocks –the secular trend of asset light, more cloud-based IT and its own internal troubles.”

The planned cuts in the enterprises services division can come from staff reductions, moving more work offshore, delaying or eliminating investments, and writing down assets that are being deprecated, said Peter Bendor-Samuel, chief executive at consulting firm Everest Group.


IT shares trade firm; HCL Tech, Tech Mahindra up 3%

May 21st, 2015

Shares of information technologies (IT) companies were trading firm on the bourses, gaining upto 4% each, on the back of positive corporate announcements and weakening rupee.Outsourcing43

HCL Technologies, Tech Mahindra, Tata Consultancy Services (TCS), Persistent Systems and Cyient rose 3%-4% each, while Infosys, Wipro, Hexaware Technologies, Polaris Consulting & Services and MindTree gained 1%-2% each on the National Stock Exchange (NSE).

At 1311 hours, CNX IT index was the largest gainer among sectoral indices, gaining 1.8% compared to sub-1% gain in the benchmark CNX Nifty.

Tech Mahindra spurted by 3% to Rs 640 after the company said Ontario Ministry of Energy and the company invested in innovative Smart Grid solution powered by analytics.

Tech Mahindra announced that it will build an Intelligent Electric Vehicle Charging System (IEVCS) designed to help build Ontario’s clean energy future. The project, sponsored by the Ministry of Energy and funded in part through the Ontario Smart Grid Fund initiative, will analyze the effects of electric vehicle charging on transformers by creating a real-time transformer monitoring and analytics solution.

TCS gained 2% at Rs 2,563 after its client, Euroclear Finland launched platform, Infinity powered by TCS BaNCS for market infrastructure.

Infinity is a multi-year program powered by TCS BaNCS for Market Infrastructure and is a key component of Euroclear Finland’s outsourcing its securities settlement processing to TARGET2Securities (T2S) as part of the European Central Bank’s fourth migration wave in February 2017, TCS said in a statement.

Meanwhile, the rupee depreciated by 11 paise to 63.78 against the US dollar at the Interbank Foreign Exchange in early trade today as the American currency appreciated in wake of strong economic data, the PTI report suggests.


Wipro to open innovation lab in Silicon Valley by December-end

May 18th, 2015

Wipro Ltd will open a technology innovation centre in Mountain View, California, by the end of December as it seeks to build products on automation and artificial intelligence technologies in partnership with innovative start-ups nested in the Bay Area, thereby strengthening its offerings to clients when competing for large outsourcing orders.Outsourcing37

Wipro’s new facility—the firm’s first outside its headquarters in Bengaluru—will have to compete with global software giants, including Google Inc. and Facebook Inc. for talent and partnerships with start-ups, and comes after local rival Infosys Ltd decided to shut its research and development wing and merge it with other business units within the company earlier this year.

“Why Mountain View (having an office)? (Because) Bay Area represents that right area where we can bring together a lot of start-ups (to work along with our) customers,” Wipro chief technology officer K.R. Sanjiv said in an interview. “We are (already) working with lots of start-ups in the automation space and we are looking at having this facility opened by December-end”.

Sanjiv declined for now to give details on this innovation lab, including the number of engineers and scientists the lab will have, but another executive familiar with the development said that, for now, the firm plans to have “about 100-150 people” working out of the facility.

“We will have start-ups work with our core team, especially in areas of automation, artificial intelligence and big data,” said the second executive.

Wipro’s Bengaluru innovation lab has helped the company come up with its first artificial intelligence platform, Wipro Holmes, and other technology platforms for its banking and financial services customers and retail clients, which the company believes gives it an edge when bidding for outsourcing deals. The Bengaluru innovation centre employs nearly 300 people.

Silicon Valley is considered to be the cradle of start-ups focused on next-generation disruptive technologies and home to blue-chip companies across sectors. Firms ranging from Apple Inc. to Ford Motor Co. have significant presence in the area. Institutes such as Stanford University supply people to these companies, while venture capital firms such as Andreessen Horowitz help in turning many ideas into blockbuster products, thereby making the region a powerful magnet for companies across the world. Of late, many Asian firms, including Chinese search giant Baidu and South Korean electronics giant Samsung have set up research arms in Silicon Valley. India’s largest software exporter Tata Consultancy Services Ltd has a presence in the area for close to eight years. Its COIN, or Co-Innovation Network, screens almost 800-1,000 start-ups every year, some of which work with the Mumbai-based company.

“Silicon Valley is a unique, very dynamic innovation ecosystem where players are used to innovate across boundaries, and to experiment and take risks—so firms from around the world see this as a place where they can best learn fast and access skills and resources they need in order to succeed,” said Eilif Trondsen, research director at Strategic Business Insights, formerly Stanford Research Institute.

Sanjiv, who reports to Rishad Premji, head of group technology and strategy and son of chairman Azim Premji, said the company decided to merge the technology office with the strategy office earlier this year as technology is core to the future of any firm. “The tipping point for merging the role of strategy with technology happened over what we have seen over the last year or so. It is becoming more technology-led. Over the last two-three years, strategy was not so much technology dependent as far as process dependent. So historically, it was kept separate,” explained Sanjiv.

However, some observers believe that having a mere presence in the valley does not assure success.

“The vast majority of corporate incubators in Silicon Valley are disasters. That is because companies think that just by having some people in Silicon Valley, some magic will happen and their culture will change,” said Indian American technology entrepreneur and academic Vivek Wadhwa. “The problems are much more fundamental. This is likely to be the fate of incubators that Indian companies are setting up here as well. They are making the same mistake that American companies do.”

Infosys, the India’s second largest software exporter, knows this well as it had to shut its research and development arm, Infosys Labs, which first started in 1999, before merging it with the back-end verticals of the firm.

“They (Indian software exporters) are deluding themselves by thinking that by setting up Silicon Valley incubators and investing in some companies here, they will be saved. They need to be rethinking their entire strategies and reinventing themselves—not chasing Silicon Valley rainbows,” said Wadhwa, who in the past has suggested that Rishad Premji seek more partnerships with India-based start-ups.

Understandably, Wipro is going a little slow when engaging with start-ups, and said that 80% of the $100 million corpus kept with its corporate venture arm will be used to invest in start-ups based in the US and India.

“Our focus remains in the US and India. So let me put it like this, when making a strategic investment, focus will remain in US and India, and 20% for those in Europe and rest of the world,” said Sanjiv, who has a small team of “three-four” executives who evaluate start-ups that Wipro could partner. Last year, Wipro evaluated more than 200 start-ups, of which the company partnered with less than five and eventually bought a $5 million stake in Drivestream, a US-based start-up that helps in integrating Oracle cloud applications systems. “We are one of the funnels for start-ups before Venu and team (Wipro corporate venture heads Venu Pemmaraju and Biplab Adhya) come and make investments,” Sanjiv said.

For now, Wipro has partnerships with about 30 start-ups, and it has also made a minority investment of $30 million in New Jersey-based data analytics firm Opera Solutions. Wipro did make another investment of $5 million in machine-to-machine learning focused start-up Axeda, but sold its stake last year after the start-up was bought by a Nasdaq-listed firm.


Wipro, Infosys and TCS See Europe as an “Achilles Heel”

May 14th, 2015

Although Europe is frequently seen as the next big frontier for the major Indian service providers, companies such as Wipro, Infosys and TCS are finding the continent to be an increasingly vulnerable place to do business.Outsourcing36

One reason is the euro’s volatility. Furthermore, the top Indian IT firms, previously enjoying growth rates of 25-30 per cent in Europe, are also now struggling due to top customers in the region, such as AstraZeneca, cutting down on their spending.

As a result, the Indian Economic Times has found that revenues for the majority of Indian’s biggest service providers operating in Europe have declined in the last quarter of 2014 and first quarter of 2015.


India’s IT incumbents struggle to adapt as outsourcing industry changes

May 14th, 2015

India’s massive outsourcing industry is changing. Growth in its traditional markets has flattened as the country’s biggest IT providers struggle to adapt.Outsourcing35

Companies like TCS, Infosys and Wipro have repeatedly blamed the stronger US dollar for poor results as a good number of clients are based stateside.

But the underlying reason is simply that fewer businesses need their services.

“The traditional labour-based service delivery is now being cannibalised by access-based, cloud-based, platform-based and automation-based service delivery,” said Arup Roy, research director at Gartner India Research and Advisory Services.

India’s IT providers have long been aware of this global shift to cloud and mobile computing, and some have been quicker than others to adapt.

“We have seen TCS acting in a more nimble fashion compared to others such as Infosys and Wipro,” said Dhananjay Sinha, head of research and strategist at Emkay Global Financial Services.

“TCS has been fairly ahead of the curve in terms of getting into Europe and other specific verticals which has actually aided them to show a relatively strong growth to others. If you look at Wipro, it would be third or fourth year when the dollar revenue growth would be sub 10 per cent. Likewise, Infosys has decelerated.”


But a key issue is that Indian IT firms remain averse to consolidation. Many are stuck in the old mindset and see big acquisitions as risky. Data from trade body Nasscom also show they have not scaled back hiring. TCS alone brought in close to 60,000 people last year.

To survive, analysts say these firms will need to invest a whole lot more on research and development, and start looking beyond their horizons.

Roy said: “If we talk about China, it has been a difficult a market for most of the service providers, likewise Brazil, Saudi and European countries.  I am talking about the Dutch country, Norwegian region as well as to a certain extent the eastern European regions.”

But even if they find new markets, analysts say they can no longer charge what they used to. Price wars have reportedly broken out as firms vie to retain marquee customers like American Express and Citigroup.

“Competitive pressure is going to intensify so as a result of that,” said Sinha. “As the industry has also matured, the clients are also demanding competitive pricing. I don’t think that there will be a consolidation happening as far as large players are concerned.”

While it is not ideal, sacrificing margins for a greater share of the market may be their only option for now.


Wipro’s chief business officer Satishchandra Doreswamy steps down

April 3rd, 2015

India’s third-largest software services provider Wipro Ltd’s chief business officer Satishchandra Doreswamy has stepped down to pursue opportunities outside the company, the company said.Outsourcing18

The development comes just a fortnight after the Banglore-based company announced a new organisational structure and appointed former TCS business process outsourcing unit head Abid Ali Neemuchwala as chief operating officer (COO) as well as group president.

Before joining Azim Premji-led Wipro in 2011, Doreswamy was working with Tata Consultancy Services as vice president and global head for infrastructure services. Neemuchwala also joined Wipro last month from TCS where he spent almost two-and-a-half decades.

As chief business officer at Wipro, Doreswamy was responsible driving large and strategic transformation deals and inducting next generation tools, processes and practices.

In March this year, Wipro had announced a series of internal changes, including creation of positions of group president and chief operating officer (COO). The position is being seen as a clear number two position in the company after that of the CEO.

The appointment of Neemuchwala also possibly sets a new line of management in place as a potential succession plan after 55-year-old Kurien hangs up his boots.

Kurian was named CEO of Wipro four years ago after the IT services major scrapped its previous top leadership structure involving two joint CEOs. Kurien had taken over from Girish Paranjpe and Suresh Vaswani.


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