Wipro’s cloud business grew 2x average growth and strategizes strategic investment expansion in various key Hyperscalers.


by 5paisa Research Team Last Updated: Nov 22, 2021, 04:58 PM IST

The management in the recent conference meet commented on the sustained growth momentum, with stable margin and a strong and broad based demand environment in all industry verticals. 
Within geographies, the US reportedly continued to grow, while Europe (particularly continental Europe) has witnessed strong acceleration. The company presumes that trends like AI/ML, Big Data, Cloud, mixed reality, meta-verse, and tokenization, coupled with multi-Cloud infrastructure, Cyber Security, and 5G capabilities will support these trends, and drive demand over the next 3-5 years.

The company is now more focused to drive strong growth, with a large investment pipeline in both capability and sales. The company strategizes on reinvesting the margin earned from offshore, fixed price productivity, pricing, utilization, and pyramid in the business. 

The company expects the demand to continue to remain strong with a growing pipeline. The Cloud business has grown at 2x the company’s average growth rate in the past 2 years. Cloud-related pipeline is one-third the total pipeline. Deal TCV was up 80% in the past four quarters. The company has signed mega deals in both Americas and Europe geography, with a potential for both to reach a TCV of USD1b. The management is focusing on sourcing large deals from the market for the betterment of market share expansion upto USD200m and USD300m accounts.

WPRO restated its plan to invest USD1b in building its Fullstride Cloud Service as customers are no longer looking for just system integration, but also business transformation partners. The company plans to continue to invest in other high growth areas, and will continue to make strategic investments in Data, AI, and Cyber Security, and build industry-specific capabilities. Key hyperscaler alliances include AWS, Azure, Google, Salesforce, SAP, and Service Now. Order book in ACV terms is up 80% YoY across the top six partnerships.

The acquisition of Capco has visibly proved to be successful by winning 22 joint go to market deals Wipro. Wipro has been active in the M&A market, and has made six investments over the past one year, its largest ever acquisition being Capco. Combination of Wipro and Capco provides both consulting and domain technology capabilities which have strong demand in the market. This can be confirmed with the robust deal wins. Capco has won 120 deals in the first six months since the transaction’s closure. The management indicated continued appetite for inorganic investments, and said it will also not shy away from large acquisitions if they make business sense.

Investment in the sales channels lateral leadership hires (80% in market facing roles), a large deals team, and strategic partnerships, are expected to power growth. The company expects the supply environment to stay tight, and hence has reoriented its appraisal system to incentivize high performers, along with a large fresher intake (25k in FY23). While it expects employees to return to work, it will operate in a hybrid environment, with greater flexibility. It said its crowdsourcing platform Topcoder will add dynamic workforce capabilities.
 

 

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