Wipro eyes deals in IT infrastructure services

Soap-to-software maker Wipro is chasing a number of technology deals, more than half of which are in IT infrastructure services. About 60%-70% of the software exporter's order funnel is in infrastructure services, a business perceived to be less recession-prone compared to other lines of service, such as application development, its global business head Anand Sankaran said.

About 50% of these deals are from the US and 20-25% from the UK, Sankaran told ET in a recent interview. The contracts, ranging from $100 to $500 million, are from banking, retail, manufacturing and healthcare sectors. Some of them are integrated deals involving infrastructure services, application development and back office services, he added.

"Healthcare is throwing up quite a few opportunities for infrastructure outsourcing. A lot of companies in this sector have done application outsourcing and have seen the success of it, so this is the second wave of outsourcing," he said. The deals are expected to close over the next 6-12 months.

Over the years, the size of IT contracts has been whittling down, and IT infrastructure is one of the few areas where service providers can still look forward to large deals. Unlike application development, where revenues are dependent on the applications that are being developed, maintaining of IT infrastructure is an essential expenditure, and to that extent, it's recession-proof.

Wipro was perceived to be losing out on infrastructure deals compared to peers such as Tata Consultancy Services and HCL Technologies because of a greater emphasis on the higher margin consulting business after TK Kurien took over as CEO but Sankaran refuted this. "We're still the largest in this segment. Maybe we could have been larger than what we are but we are still number one if you include our India business," Sankaran said.

Last fiscal, infrastructure services accounted for about $1 billion of Wipro's revenues and continues to be 75%-80% of its global technology business, he said. Sankaran, who also heads Wipro Infotech, its India and Middle East IT business, took over as head of the global infrastructure business after the international and domestic infrastructure businesses were merged two quarters ago in a restructuring exercise.

Wipro's largest acquisition has been that of Infocrossing, the US-based provider of infrastructure management services, in 2007. The acquisition gave Wipro the ability to offer large scale hosting services and mainframe services, which the company now wants to leverage with its systems integeration skills to win large infrastructure projects globally like its Delhi International Airport and ESIC projects in India.