Wipro bets big on acquisitions to bolster its digital business2 min read . Updated: 21 Nov 2019, 11:06 PM IST
- Acquisitions such as Designit, International TechneGroup amplify capabilities, says head of firm’s digital biz
- Digital is a crucial part of Wipro’s biz, contributing nearly 40% of total revenue in the Sep quarter
BENGALURU : Bengaluru-based software services firm Wipro Ltd is strengthening its digital business inorganically through strategic acquisitions of digital-native companies.
Digital is a crucial part of Wipro’s business, contributing nearly 40% of total revenue in the September quarter.
“We pride ourselves on making sensible acquisitions that amplify our existing capabilities and expand our presence across different markets. These included Designit, Appirio, Cooper, Syfte and, most recently, International TechneGroup (ITI), a digital engineering and manufacturing solutions company," said Rajan Kohli, president, Wipro Digital.
Wipro, which acquired US-based ITI in October, said the acquisition complements its core digital strengths. “The acquisition of ITI has enabled Wipro to offer end-to-end solutions in digital engineering and manufacturing within our industrial and engineering services business," Kohli said.
Wipro’s revenue from digital grew 29% annually and 7% sequentially in constant currency in the September quarter. While Wipro doesn’t offer guidance on digital revenue, Kohli said, “the business is seeing continued robust growth. Our investments and end-to-end digital transformation capability continue to bear fruit by winning deals and acquiring new logos. We expect the digital proportion of our overall business to continue to rise."
In comparison, larger peer Tata Consultancy Services (TCS) Ltd’s digital revenue stood at 33% of total revenue, growing 28% year-on-year for the fiscal second quarter. Infosys Ltd’s digital business grew 38% annually and contributed 38.3% to the total revenue.
Analysts believe acquisitions offer a great way for companies like Wipro to acquire digital skills. “From a large IT company’s standpoint, building those capabilities from scratch will take time. Such acquisitions bring in solid experience, client base, and some amount of intellectual property too," said Arup Roy, vice president, research at Gartner.
Sectorwise, Wipro’s financial services, energy & utilities, healthcare and telecommunications, are particularly focused on digital transformation at the moment, though “we are also seeing interest in the technology, consumer packaged goods, retail and manufacturing markets. Financial services is the largest business unit for Wipro and is also the biggest spender on technology," Kohli said.
Wipro chief executive Abidali Z. Neemuchwala said during the Q2 earnings that the company is winning “integrated transformational deals" in Canada, Australia, and Asia Pacific, besides the key markets of the US and UK.
To further scale up its digital business, Wipro is also building its digital talent. For instance, Wipro’s internal crowdsourcing platform, Top Gear, has more than 55,000 employees who collaborate with colleagues and tech partners to provide additional support to traditional teams.
“Top Gear is also a social learning platform for workforce reskilling, with more than 2,000 learning assignments across more than 200 skills, presenting an avenue for our employees to upskill themselves. We also hire from universities close to our different markets and office branches," Kohli said. “This localisation is important for us to not only create a global, diverse and distributed talent base, but also to be part of every community in which we operate."
Over the last three years, Wipro has trained and upskilled 130,000 employees in various digital skills. “Our most immersive training program is our Digital Academy to create full-stack digital ninjas," Kohli said.