Spectramind may lose Microsoft business
By siliconindia staff writer   |   Monday, 19 April 2004, 19:30 IST
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MUMBAI: Software giant Microsoft, which outsources a significant portion of voice-based support work to Indian vendors, could discontinue its existing relationship with BPO firm Wipro-Spectramind, reports Economic Times. According to sources in the know, one of the reasons why Wipro-Spectramind has given a subdued guidance and announced a drop in net employee additions is because of the likelihood of Microsoft pulling out. Wipro-Spectramind president and CEO Raman Roy said that the firm had not lost any customer. “We do not comment on any specific customer”, he said. Wipro-Spectramind won a $10-million deal from Microsoft during the September 2003 quarter. The software company has been a Wipro customer for the past two years. The total quantum of Microsoft's voice-based work outsourced to Indian vendors is not known but the software company happens to be one of Wipro-Spectramind's premium customers. Wipro-Spectramind admitted to difficulties in attracting and retaining talent while announcing its annual and quarterly numbers last week. “The net decrease of 156 employees in the BPO business in the last quarter has been because of a number of one-time projects executed during the Christmas season and one-off product launches closing down,” the firm said. Wipro-Spectramind has 23 customers, up from 19 in the previous quarter, and 76 processes. Spectramind hired 4,194 people in the last fiscal. The firm accounts for close to 11 per cent of Wipro's total revenues. The firm lost CapitalOne, a customer account which had 350 people working on it and another process involving nearly 400 people. A redeployment of 700 people as a result of this could have led to a drop in net additions, sources said. However, analysts expect a near term slowdown in the firm’s business due to this. “Intense pressure on prices and on generating topline is being felt in the IT-enabled services space. More so at a time when existing clients are seeking reduction in rates,” an analyst said. Microsoft has around five third-party vendors that provide voice-based support services to it. A Microsoft spokesperson when contacted said: “Microsoft does not discuss its business relationships publicly.” Wipro's relationship with Microsoft has four facets. Besides being the largest reseller and user of Microsoft products, it does research and development work for the company and also works with it in multiple client engagements. Wipro's near-shore (close to client premises) facility at Seattle, where Microsoft is headquartered, undertakes product development work for the company and its development facility at Hyderabad works on some of Microsoft's undisclosed products. Around 150 Wiproites work on Microsoft projects. However, Microsoft is not among Wipro's top 10 customers.

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