Rishad Premji guides Wipro’s shift to SMAC6 min read . Updated: 31 Mar 2015, 01:30 AM IST
Premji was earlier this month given the additional responsibility of heading technology operations at the company
Bengaluru: Wipro Ltd chief executive officer (CEO) T.K. Kurien and Rishad Premji, head of strategy and son of chairman Azim Premji, have together steered the company to significantly build up its presence in the social, mobile, analytics and cloud (SMAC) areas, with about one in five of its ongoing projects having elements of the new technologies that are driving innovation in business.
The deliberate emphasis on SMAC technologies underlines the preparedness of the country’s third-largest software exporter at a time when customers are warming up to vendors who can offer cost savings on running their information technology (IT) infrastructure.
About 18% of Wipro’s 20,000 projects involve one of the SMAC areas, compared with four years ago, in 2011, when “less than 4%" of the projects had elements of these new technologies, according to a senior executive familiar with the development.
The company is in the so-called silent period prior to the publication of its quarterly results on 21 April, so the executive did not want to be named.
Kurien, who took over as CEO in February 2011, and Rishad, who took over as chief strategy officer around the same time, have together brought in these disruptive technologies to many of the company’s offerings, including enterprise resource planning systems, according to a second executive.
“The shift in Wipro’s mix towards SMAC is clearly due to a deliberate increase in Wipro’s attention on SMAC-related deals combined with a natural shift in customer demand trends," said Rod Bourgeois, founder and head of research at US-based DeepDive Equity Research Llc. “For example, several years ago, systems integration deals were more prone to centre around ERP systems. Today, deals are more likely to focus on efforts that fall under the mantra of SMAC or digital."
SMAC accounts for about 11% of Wipro’s $6.7 billion revenue from information technology (IT) services.
“Over the last few years, we have been working to build up next generation technology platforms, (forming) partnerships with start-ups. We have also been hiring more people with the skill sets in these areas," said the second company executive.
Rishad, 38, who joined Wipro in 2007, was earlier this month tasked with the additional responsibility of heading the technology operations at the company and, according to the second executive cited above, could be also considered for the 12-member panel being formed by Kurien to oversee the future roadmap for the company.
This panel, to be headed by Kurien, will have the newly appointed chief operating officer, Abid Ali Neemuchwala, and three presidents. Wipro is expected to announce the other members of this panel this week. Rishad is also overseeing Wipro’s recently unveiled $100 million corporate venture arm.
Since the start of 2014, the younger Premji has been meeting start-ups and venture capitalist (VC) executives from Beijing to San Francisco.
“He has been globetrotting, meeting VCs, start-ups, understanding how they work and then evaluating which start-ups can be brought in Wipro’s fold," said the first executive.
He currently leads a team of over two dozen executives, meeting customers and evaluating acquisition opportunities for the company. Under his watch, Wipro made a three-fold gain on its $5 million investment in US-based machine-to-machine learning focused start-up Axeda. Wipro also has a minority stake of little more than 20% in a New Jersey-based data analytics firm Opera Solutions.
Since taking over as head of strategy, Rishad has brought in an “aggressive streak" to Wipro’s approach of investing in companies, according to an executive who works in the strategy team.
“We have become proactive than being very reactive... earlier, we used to depend on investment bankers to pitch the companies. Now, in many cases, we ourselves evaluate which companies we should invest," said a third executive.
The soft-spoken Rishad enjoys watching cricket and Hindi movies, including the biographical sports drama movie Mary Kom last year.
Rishad is the elder son of Azim Premji; his younger brother Tariq works with the Azim Premji Foundation.
Rishad is married to his college sweetheart Aditi, who is a homemaker, and the couple has two children Rhea and Rohaan. When not travelling overseas, Rishad works out of Wipro offices in Sarjapur and MG Road in the central business district of ‘India’s Silicon Valley,’ Bengaluru, driving to work in his red Mini Cooper hatchback.
Both Kurien and Rishad have adopted a two-pronged approach to strengthen their position in acquiring new technologies. Since 2012, Wipro has invested over $400 million in building platforms that use disruptive technologies including cognitive technologies, automation and machine-to-machine learning.
Since 2011, the company has been aggressive on partnering with start-ups around the world and in the last four years, it has partnered with over 30 start-ups in an effort to bring technologies which it does not have to its customers. One such partnership is with Pingar, a New Zealand-based text analytics software maker that helps Wipro’s existing and new clients sift through large texts to glean information relevant to them.
For this reason, some experts believe Wipro’s investments in the SMAC areas make it well positioned to win some of the large outsourcing deals.
“Wipro has been very aggressive in investing in these areas. I believe save for Cognizant, they have been the most aggressive," said Peter Bendor-Samuel, founder and CEO of consulting and advisory firm Everest Group. “Rishad represents ownership and he understands technology. His consulting experience puts him in great position and this decisive leadership has helped the company make significant investments in these areas."
For over two decades, homegrown IT outsourcers’ customers have kept much of their IT hardware in-house. With the advent of cloud computing—in which clients buy computing power and services over the Internet from a third party—almost all IT vendors have rapidly built up their capabilities to offer these shared services or tied up with cloud service providers such as Amazon.com Inc. and Microsoft Corp.
As commoditized outsourcing deals come under pressure, IT vendors are trying to bring in elements of disruptive technology in their service offerings, promising to offer greater efficiencies for their clients. Many a time, the benefits promised can help swing a deal, a case in point being Wipro’s largest ever outsourcing deal of $1.2 billion won from Canadian utilities firm Atco Ltd last summer.
Most homegrown technology firms do not share details of the business generated or the headcount working in the SMAC areas.
Mint learns from an Infosys Ltd executive that the company has upped its recruitment in these new technologies since Vishal Sikka was named CEO-designate on 12 June. Up until the end of the 2014, Infosys had increased its hiring in the analytics space by more than 60% over the year-earlier period and also hired 12% more number of engineers in its cloud practice.
Infosys’s cloud practice, according to chief operating officer U.B. Pravin Rao, has over 16,000 engineers working on “more than 1,000 projects".
Bourgeois of DeepDive Equity Research did concede that given the large employee bases of the top Indian firms, a major shift into next-generation capabilities requires considerable time, and “ongoing reskilling efforts are needed for major IT services firms to respond to the changes that occurred in customers’ demands".
“In reality, some SMAC deals entail relatively minor SMAC components or SMAC interfaces, and these deals are anything but revolutionary," said Bourgeois.