The economic slowdown in the United States is pushing a major Indian software services company to diversify into the Japanese market, said Vivek Paul, president of Wipro Technologies.

Vivek Paul, president of Wipro Technologies

“Japan is still a growing market (for us),” said Paul, who visited Tokyo last week to promote its business. “We are looking at telecom service providers as (a new) area (here) that we would love to get into.”

Since opening its marketing base in Japan in 1995, Wipro has cultivated 30 corporate customers. Wipro is based in Bangalore, India’s high-tech center.

Indian software companies like Wipro rapidly expanded their business bases during the decade-long information technology boom of the 1990s by providing high quality software services at low cost.

About 30 Indian IT companies have entered Japan since the early 1990s.

They typically develop programming by using software engineers in India, making them more cost competitive than companies in industrialized countries.

Since the burst of the IT bubble in the U.S. last year, the business climate has changed, with the economic slowdown spreading to other nations.

Although Wipro continues to grow, Paul said, “We have felt the impact of the global (economic) slowdown.”

Wipro’s revenue growth rate — once as high as 70 percent — fell to 46 percent in the April-June quarter, he said, pointing to the decreased business volume in the U.S.

Accordingly, the proportion of overall U.S. sales dropped from 75 percent in 1999 to 60 percent in the latest quarter, he said, adding Wipro withdrew 40 of its engineers from the U.S.

“We have never seen a high go to a low so fast,” he said. “Given the unique economic climate we are in . . . we are saying let’s go out and grow in as many directions as we can. That’s the best kind of protection against downturn.”

As part of its diversification program, Wipro launched a unit to promote packaged software programming, including enterprise resource planning systems, in April and a unit to cultivate telecommunications service providers in October.

To market its increasing range of services, the company opened offices in France, Germany and Singapore earlier this year. Europe currently represents about 30 percent of Wipro’s annual revenues, most of which came from Britain.

To expand its share in the Japanese market, Wipro has set an aggressive goal for this year, with Paul expecting Japan’s contribution to annual revenues to rise from 8 percent, or around 3 billion yen, in fiscal 2000, to 15 percent by the end of this year.

“I think that all we need is one big project,” he said, adding that the company’s British unit recently won a $70 million order for hardware and software system integration services from a British telecom service provider.

Ultimately, Wipro must build credibility among Japanese companies, while raising awareness of the capabilities of Indian IT companies to deliver quality services, Paul said.

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