2 - Girdling For Growth

src="wiprolog.jpg" width="100" height="96" alt="wiprolog.jpg (4767 bytes)">

height="260" alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/8b65b6235a531c4e56473c230e0ca5bd84a757c5ba81bd4e91a2837d7b046e71.jpg (12280 bytes)" border="0" hspace="2" vspace="2" align="right"> ALIGN="center">GROUP PRESIDENT:

ASHOK SOOTA

T size="2">here is a famous Tamil saying, ‘To start a bushfire, you need but a single
matchstick.’ Chairman Azim Premji at Wipro has struck that one matchstick to take
Wipro into the second phase of growth. The matchstick called Quality. Premji and Wipro
Infotech President Ashok Soota are spearheading Wipro’s march into a globalized
marketplace. Having achieved the SEI-CMM level 4 certification, Wipro’s entire
management energy is focused on getting to the pinnacle of Quality, the Six-Sigma level by
2002, where there is just a single company in the world operating, Motorola.

First the report card for last year. In the middle of a
dismal domestic hardware business scenario, Wipro still managed to hold onto its strength
areas and consolidated in a few of them. In a year when the server market displayed a
negative growth, Wipro shipped 12 alt="https://img-cdn.thepublive.com/filters:format(webp)/dq/media/post_attachments/378f5bffb79299312958e3cac9e46cebd314faff4ef31d073606106e89cdc570.jpg (11369 bytes)" border="0" hspace="2" vspace="2" align="right"> size="2">percent more servers than the previous year, and managed to retain a positive
growth of a marginal 1.27 percent. However, due to the fact that there were no big
projects in the pipeline last year, it was unable to sell a single Tandem machine.

In the PC marketplace Wipro-Acer brand continued its bad
run, with a modest 10-percent increase in unit shipments. Last year Wipro sold 36,658
Wipro-Acer PCs, which include about 1,900 servers. In terms of value, there was actually a
minor dip and the brand ended up earning close to Rs 257 crore, as against Rs 262 crore in
the previous year.

Overall, the systems business of the company
dipped in absolute revenue earned, from Rs 475.6 crore in 1996-97 to Rs 453.51 last year,
a fall of 4.6 percent. As it is becoming increasingly evident, Wipro’s transformation
has been under way for the last few years. From a company where systems contributed close
to 54 percent in 1996-97, last year, the share of systems in the total revenue was in the
region of 43.24, a drop of 11 percent.

As regards the software business, for the second year in
a row, software exports jumped 54 percent and domestic software (including bundled
software) reckoned a record-breaking Rs 164 crore. The most significant aspect of
Wipro’s performance last year was the fact that for the first time the revenue from
software and services for the company overshot the revenues from systems category. At Rs
464 crore, software and services contributed 44 percent of the revenue, excluding packaged


software.

Having weaned itself away from the mantle of a mere
hardware vendor, Wipro is now closely realigning its expertise across several fronts with
the common theme of a high value-added information service provider offering
time-to-market advantages to its customers. Also, the Indian business of the company will
revolve around the Wipro brand and offer business solutions to enterprise customers
through its partnerships with Sun, Tandem, Convex etc.

On the other hand, Wipro will push its own brand in the
PC market and play the volumes game in that segment. Wipro has identified three major user
segments—telecom, manufacturing, and finance. The peripherals segment will also be
sharply focused through the existing leadership with own DMPs, and the relationship that
it has with Epson.

Early this year, Wipro also established a much-delayed
alliance with market leader HP in the non-impact printer market. While the impact of this
alliance on the Wipro-Epson relationship is not clear at the moment, it is obvious that
Wipro stands to gain a tremendous advantage with the HP relationship and will also,
symbiotically, help HP maintain its current lead.

However, the real action is in its global businesses,
where the endeavor is to build a Wipro brand name as a software service brand globally. On
the domain side, Wipro will focus on ecommerce, healthcare, finance, supply chain, ERP,
telecom, retail, and utilities. And on the horizontal side, the company plans to address
the host of opportunities arising out of the European Monetary Union (the Euro issue),
Y2K, datawarehousing, and ecommerce.

As a part of the thrust, Wipro’s President and
Chief Technology Officer, Sridhar Mitta, was dispatched to the US to oversee the src="wipro3.jpg" width="365" height="148" alt="wipro3.jpg (22536 bytes)" border="0"
hspace="2" vspace="2" align="right">‘Softchips’ project.
Softchips involves creation of reusable Intellectual Property (IP) that encapsulates
hardware designs into software.

There is also an initiative to grow the non-US business
so that the dependence on the US market is reduced significantly. In that sense, Wipro is
focusing on Japanese and European markets.

And the entire business is centered around Wipro’s
quality initiative. While the strategy appears more or less clear—and daring—the
real test will come when the plans are put into action.