WIPRO Three Cheers for Wipro!



No. This is not even remotely about the quarterly results of the company.
This is about a seemingly small news–that Wipro has decided to invest $10
million in Spectramind, one of the better performing remote services companies.
This has given the Bangalore-based IT services giant a 20 percent stake in the
company. But anyway, I am not going into whether the valuation was right or not.

My first cheer for Wipro is due to its bold step. Remote services (popularly
known as somewhat less appropriate IT-enabled services) are a big opportunity
for India and very complementary to the IT services that the Indian majors like
Wipro, Infosys, and TCS are known for, globally. Yet, many of the so-called IT
pundits in India have frowned at this opportunity, labeling it as low in the
value-chain. Wipro’s direct investment in this area, at the time of a global
slowdown, is one of the best decisions taken by the company in its history.

My second cheer for Wipro is louder. It is for the wise–and pioneering–decision
to invest into an existing company and not trying to set up one on its own.
Incidentally, of late quite a few bigger software services companies are trying
to set up their own remote services facilities for services like call center,
back office, and the like. TCS, iflex, Mphasis, and Hiranandani Software, are
just a few examples. In a recession-trodden market, when big companies in the US
are looking at cutting cost, without compromising on the quality, time to market
has become extremely important. None of the Indian companies started by the
existing software companies have been able to rollout in less than a year. Wipro
has taken a very intelligent short-cut.

My third cheer for Wipro is for not falling into a trap that Indian companies
are quite used to fall into. Even after deciding to invest into an existing
company, Wipro could have decided to just buy out an existing sick company with
good infrastructure, good technical people, and good workforce at a much lower
rate. It could have put its own managers to turn around that company. It seems
very simple when I write it here. But that probably would have taken much more
time and would have taken months before integrating it into its service
offering. Instead, Wipro has decided to repose its faith on a company whose
management has proven a track record and the company is in excellent health. The
only thing it does not give Wipro is direct control. My third cheer is, in
short, specifically, for that. For the fact that it is quite comfortable without
that total control. Again a pioneering thought.

For Spectramind, it was the second round funding. While Wipro put in $10
million, another $4 million was put by Chrysalis Capital, the VC which had
started the company with the promoters. It holds 40 percent. HDFC holds six
percent while the rest of the equity is held by Raman Roy, the CEO and his
management team.

Shyamanuja Das

1 comment

  1. This is undoubtedly the best thing that I’ve come across today in the internet. It was a long time that I have been thinking on this topic but I couldn’t satiate my quench for knowledge through any post that I read. However, today that I came across your article, I seem to have learnt a lot and I have also gained enough knowledge on this topic. Thanks once again.

Leave a Reply

Your email address will not be published. Required fields are marked *