Twitter
Advertisement

Wipro nears 3 buys in IT infrastructure space

Wipro Technologies is in advanced talks for at least three more acquisitions in the IT infrastructure space in Europe and Asia. Wipro nears 3 buys in IT infrastructure space.

Latest News
article-main
FacebookTwitterWhatsappLinkedin

Taking forward Azim Premji’s string of pearls strategy, Wipro Technologies is in advanced talks for at least three more acquisitions in the IT infrastructure space in Europe and Asia.

The acquisitions will come close on the heels of the $127 million Citi Technologies deal last December.

The buyouts will add significantly to Wipro’s infrastructure capacities, mainly data centre space, and manpower, a senior company official said without naming the exact geographies or the value of the proposed deals.

“These acquisitions should be of about the same size as the Citi Technologies deal,” Tapan Bhat, vice-president, global sales, Technology Infrastructure Services, and business head for Wipro’s Global Total Outsourcing and Global System Integration businesses, told DNA Money. They will add up to 60-70% of Wipro’s existing US data centre space in Europe, Bhat said.

Each deal could add 40-50,000 square feet in data centre space. One of these is even likely to be in India, he added. “In fact, customers are coming to us and asking us to buy out their data centres,” Bhat explained.

The Indian operations of Citi Technologies were acquired by Wipro in a $127 million all-cash deal. Apart from the transfer of 1650 employees at its Mumbai and Chennai operations, the agreement with Citi also provided for the delivery of at least $500 million in service revenues over the next five-odd years. Wipro also bought Infocrossing in late 2007 for $600 million.

Wipro is the biggest Indian player in the fast-growing infrastructure management services (IMS) business. It has a team of 15,000 people in the IMS business which has grown at a CAGR of 47% over the past 4-5 years. The business accounted for 30% of the company’s revenues last year making it the largest practice line for the company.
IMS — which Bhat describes as the ‘business of keeping the lights on’ and Nasscom as the 2nd Wave of Outsourcing — is unlikely to be hit by the current slowdown as it is a not a discretionary IT spend. Moreover, in customers want to reduce costs by outsourcing it, Bhat explained.

The global IMS market, according to a Nasscom-McKinsey study, is estimated upwards of $524 billion and could become as important as application development and maintenance (ADM), and the BPO businesses for Indian IT. Of this, the total addressable market is estimated to be between $96 billion and $104 billion globally. Indian vendors can realise $13-15 billion of this by 2013 at a CAGR of 30%, the study says.

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement