Jewel in the crowd

Azim Premji, chairman of Wipro

Randeep Ramesh in Bangalore

Saturday 22 January 2005 00.04 GMT

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Drive out of Bangalore on the road to Sarjapur and you cover more than the

seven miles needed to reach the manicured lawns and brick orange

headquarters of one of the country's biggest software companies, Wipro.

Dodging bullocks, pushbikes and cratersized potholes, the journey is more

time travel than car trip.

Once inside Wipro's futuristic campus, the digital divide between the civic

disorder outside and the quiet electronic hum of progress inside is startling.
Bangalore is India's richest seam of information technology talent, and

Wipro is one of the brightest, shiniest diamonds.

With a customer list that includes Sony, Microsoft, Nokia and Dell, the

company has seen profits triple to $230m (115m) and sales double to

more than $1.2bn during the last four years.

Its latest third-quarter results, published yesterday, show a jump of 60% in

profit. Wipro's ability to insert itself into the world's corporate DNA has

made it a name recognised in boardrooms from New York to Tokyo.

At the centre of all this action is India's richest man, Azim Premji. He owns

83% of Wipro, currently valuing his holding at $10bn. Not that any of this is

visible. A modest and softly spoken man, Premji is known as a thrifty

businessman who still drives a secondhand saloon car and takes

commercial flights. His salary last year was $360,000.

A bit strange, perhaps, for a man who at the beginning of 2000, the height

of technology mania, was worth 35bn, more than Oracle founder Larry

Ellison and global investor Warren Buffett. "Why walk the talk? The wealth

is all notional. I did not sell the shares then, so I don't have the money,"

says Premji.

When people look for reasons as to why business comes to Wipro, Premji

points to the large pool of English-speaking, technically trained graduates

whose pay packets are considerably slimmer than their contemporaries

abroad.
Wipro, he says, can chose from 280,000 engineering graduates every year,

with another 200,000 college diploma-holders who are "easily trainable".

"In the United States annually there are just 50,000 engineering graduates.

In fact, colleges produce more sports therapists than engineers. Perhaps

because America is a sporty country; a lot of outdoors," Wipro's chairman

adds without a trace of a smile.

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What Premji says is India's "unique opportunity" he casts as the west's

"fundamental issue". "You have students in America, in Britain, who do not

want to be engineers. Perhaps it is the workload, I studied engineering and

I know what a grind it is. But it leaves you at a disadvantage."

Education, Premji says, is the fuel that drives India's growth. But he knows

that while there has been investment in higher studies, there has not been

the same commitment to primary education. The result is that a third of the

population over the age of 15 has no schooling - something that if not

addressed could constrain the country's service sector growth.

So the Azim Premji Foundation, a not-for-profit organisation which spends

$5m of Premji's fortune a year, focuses on improving India's elementary

education.
"We are not like China, where this could be done through legislation.

People have to take control of their own lives. Education is key because it

also raises other social indicators like healthcare."

Wipro's chairman appears uncomfortable in talking too much about

anything else but business.

Answers tend to be short: for instance, ask about being a Muslim in India,

let alone the richest person in the land, and you get a terse reply. "It is the

strength of our culture that we can have Sonia Gandhi, who is Catholic, a

Sikh prime minister and a Muslim president."

In conversation one soon realises this is not because Mr Premji does not

hold views, but because he does.

Provoking him is difficult, although on Bangalore's potholed traffic-laden

roads, he growls rather than speaks. "I can't have my employees sitting in

traffic when they should be in the office. Spending two-and-half-hours in

the car is a huge waste of productive time. The government needs to act to

sort these things out."

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Despite his emphasis on the pressing need for better public services in

India, the 59-year-old dismisses any idea that India will lose out. The most

serious industry concerns, such as rising wage levels or burn-out rates

among young workers, do not bother Wipro.

No, says Premji, if you want a problem then visit the United States.

"Attrition levels are going up in America. With Sapient or Accenture, you

are see attrition rates of 17%. It is in America where we see a real shortage

of software engineers and it is getting harder to send people over," says Mr

Premji. "Visa restrictions are going to have to be watched very carefully".

Given this, Wipro's chairman makes no apology over the hot political issue

of outsourcing, where white-collar jobs are draining away from the west to

countries such as India. He says the issue has given the software industry in

India exposure "a billion-dollar campaign could not buy".

Instead Premji says that the process is inevitable - just as Britain lost its

manufacturing base "because there were better places to do it".

"It is healthy. Companies have become more competitive globally. You are

looking at productivity increases of at least 4% a year for five years, and half

of that gain is from IT. From that point of view, we help."

Rather than being cowed by the controversy, Premji says he thinks Europe

could do with his company's "help".

"The UK and the US are quite similar in that they have high productivity,

English speaking workforces who don't mind working long hours. Working

in those countries is not a problem". Premji makes it clear that in running

his slide-rule over the European mainland, he has been surprised by the

very different take on business across the English Channel.

Cultural divides

"The culture there is very different in surprising ways. For example in

France, you can't work more than 35 hours a week. It does not help

investments."

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The Wipro chairman's bluntness is not a casual snipe but a reflection of the

importance the company now attaches to Europe, which counts for a third

of its sales. "We cannot afford to be out of UK, Germany or France - all of

which have markets of the same size. Hopefully we will be making some

European acquisitions soon." The story of rise and rise of Wipro is a tale of

modern-day India.

In 1966, Premji was an engineering student in his second year at

California's Stanford University when his father died. Dropping out to take

over the family business, the distinctly unglamorous sounding Western

Indian Vegetable Products, Premji faced an Indian market where prices

were controlled by the government and products came wrapped in red tape.

It was a bout of extreme protectionism in the middle of the 1970s, during

which IBM was kicked out of India, that inadvertently led to Wipro entering

the world of computing. In the late 1970s it began making personal

computers. "It was an ironic way of getting a brand name in technology, but

that is how it all started," says Premji.

A few years later came hardware maintenance, followed by software coding,

call centres and IT system design. The rest is history. Although Wipro is

essentially a family firm, Premji appears averse to a takeover by his sons,

one of whom works for General Electric in America and the other who

spends his time at his father's charitable foundation.

"No plans at the moment - they are both busy doing their own thing," says

Premji. Importantly there are a number of talented managers, notably

Vivek Paul, who heads Wipro's Silicon Valley operation and was lured from

Jack Welch's side at General Electric, who are considered big enough for

the top job.

And Premji is a man in hurry. Wipro's success so far has been to offer IT

expertise at a price no one could match.

But that was never going to be enough. Wipro's chairman wants to take the

next big leap forward and challenge the big IT consulting firms.

To do so will mean transforming Wipro into a new IT company, one that

can mix low cost software and high end consulting and deliver customised

solutions to anywhere in the world. One example is the recent deal between

Wipro and the TUI, Europe's biggest travel company, which will see

Premji's company managing 10,000 terminals in Britain.

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"In any software work, you have IT consultancy competence required to

build the systems. Traditionally, Indian companies just concentrated on the

maintenance and programming. It is very profitable. But now they know

they have to offer complete, end to end solutions."

As Wipro has entered new fields, it has found the big players move on -

beaten by Indian companies' cost and competency. Now Premji aims to

overhaul the very largest consulting groups in the world, all of whom have

deep pockets and armies of professionals already embedded in blue chip

companies.

"Our competition is increasingly from Accenture, IBM, Cap Gemini and

EDS," says Mr Premji. "They are the most aggressive in business, and really

in the future they are the people to watch."

It is possible to scoff at Premji's vision. At present he has 1,000 consultants,

whereas Accenture has 56,000. In terms of revenue, consulting brings in

just 5% of Wipro's revenue. But the naysayers have to deal with an

endorsement from the computing world's top geek, Bill Gates, who

remarked casually not long ago that "soon it will be common sense when a

complex project is to be delivered to say 'how about we talk to Wipro about

this?' "

The CV

Born: Bombay, 1945

Education: Stanford University, California

Family: Married to Yasmin; two sons, Rishad and Tariq

Hobbies: Jogging, golf