Tags: Wipro | dominate | market | WIT

Wipro Knows It Must Dominate Home Market

By    |   Tuesday, 27 Mar 2012 09:55 AM

Being India’s fourth-largest IT services provider means that Wipro (WIT) is, on a global scale, one of the industry’s major players. Its management knows, however, that it must dominate its own home market.

Roughly three-quarters of Wipro’s business coming from providing IT services, which brought in more than $1.5 billion sales during its third quarter reporting, up 12 percent on the year.

The Indian market alone is likely to see up to 15 percent growth during the coming year to upwards of $8 billion, and that’s in a market where PC penetration reaches perhaps 5 percent.

It’s no wonder that Wipro is putting the focus on its own backyard. On the national level, the company is pushing the government to put in favorable policies that will help public administrators and the private sector — the main users of IT services such as Wipro offers — to buy from domestic companies rather than import, quite the irony in a country that’s become known as the world’s back office.

On the regional level, it is working with state governments on packages for its growing business. Mobility solutions had 150 people working last year; this year there’s more than 1,500 people engaged on the subject, one of four main areas the company is focused on, including cloud computing.

All of those workers need to be somewhere dynamic, so talks are ongoing with the West Bengal government to establish incentives for IT companies such as Wipro and Infosys (INFY) to establish their proposed campuses in Rajarhat, which could provide jobs for up to 15,000 people each.

Homegrown


Product launches for the global market continue, with a focus on the newly-released Rapid Application Integration & Deployment Solution, aimed at communication service providers and based on Oracle (ORCL), and its new partnership with Eucalyptus Systems, creators of the most widely deployed open-source, on-premise infrastructure-as-a-service cloud platform.

Both Goldman Sachs and Oppenheimer believe WIT will continue to lag its large-cap peers in revenue and top-line growth, though Goldman recently dropped the stock to sell from neutral while Oppenheimer initiated coverage at perform. 

Wipro reports first quarter earnings on or about April 19.

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2012-55-27
Tuesday, 27 Mar 2012 09:55 AM
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