Still a lot of room to grow in global IT market: Premji

Monday, 30 August 2010, 09:24 Hrs
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London: There is still a lot of room to grow in the global IT industry, Azim Premji, Chief of Indian IT giant Wipro, has said. "If the global IT services market is growing at 3 percent to 5 percent and global exports from India are growing at 5 percent, evidently that proposition is more attractive to the customer," Premji, India's second richest man, with an 11 billion pound fortune, told The Sunday Telegraph.

He said, "The base is $50 billion a year of IT exports from India, so it's not a small industry any more, but there's still a lot of room to grow because it only represents between 3 percent and 4 percent of global market share. This is a $1.6 trillion industry."

Nevertheless, Premji admitted that until recently, India's IT services sector was spooked by fears that Britain would become more protectionist on account of its current austerity drive. "This question was asked to British Prime Minister David Cameron when he was in Bangalore because some outsourcing contracts had been suspended," he said. "A specific question was asked as to whether the new policy of the British Government was to only give contracts to UK companies," he said.

Cameron's answer was that Britain was running an 11% deficit and would look at all costs, regardless of where suppliers are based, and needed to obtain the best possible prices. "He got an ovation for that," Premji said. "I thought it was a fair answer. The visit was very successful. He created a very strong impression. Trade between India and Britain is surprisingly low, but there's a very high feel-good factor about Britain in India," he added.

65-year-old Premji, nicknamed "the Bill Gates of India," has pledged to give away most of his fortune. "I'll announce it when it happens," he said. Premji's family holds a 75 percent stake in Wipro. India's IT services sector saw the growth of its exports halved from 11 percent to 5.5 percent during the global downturn after growing by more than 30 percent for seven consecutive years. It is expected to grow by 15percent this year. Wipro reported a 20 percent increase in revenue in Q1, 2010, and is forecast to earn revenues of about $6.5 billion for the entire year.

Wipro has long outgrown its Indian roots, with just 9% of sales now in India, compared to 55% in the US and 25 percent in Europe. Half of Wipro's European sales are in Britain, which Premji said is also back in a growth mode in IT services. Wipro is strong in financial services, with a lot of UK and U.S. banking clients that Premji isn't allowed to name. It's also active in retail.
Source: PTI
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