IT industry can soon achieve double-digit growth: Wipro's Rishad Premji

Wipro chief strategy officer feels the industry will witness a turnaround in 3-5 years

Wipro chief strategy officer Rishad Premji said his company and the entire Indian IT services industry could soon achieve double-digit growth.

Premji, who has completed 10 years at the company this July, told Mint in an interview that discussions on "death of the IT services industry" are “overstated” and he is confident that the $154-billion industry would report higher growth in the next three-five years.

The IT services industry has largely seen a single-digit growth in FY17 varying between 6-8 per cent in almost a decade’s time. IT services companies, who were focusing on traditional offerings such as software maintenance, applications development, and management, have witnessed a major shift in customer demand with the emergence of digital technologies such as cloud. Industry analysts say the large and long-term software services deals have reduced sharply during the past two to three years, impacting the overall growth.

Wipro, India’s third largest IT services firm, has been aggressive in acquiring small firms to build digital technology capabilities. Last year, the company spent close to a billion dollar to buy Appirio and DesignIT, which were considered to be great bets on faster digital transformation for the company.

Institutional investors and analysts, however, raised questions over the sustainability of Indian IT industry given its slow digital transformation. Top five Indian IT continue to garner more than 70 per cent of revenues from the legacy software maintenance services.    

Premji said the industry is resilient and the investments made by IT companies including Wipro would ensure higher growth.

Wipro’s revenue as on March 31, 2017 stood at $7.7 billion, nearly 4.9 per cent growth on annual basis.

In another interview to The Economic Times,  Premji said he would continue to see opportunities in IT infrastructure management services alongside cloud.

“There will always be enough customers, in enough industries, in enough geographies that will still not be very mature in their own technology journey, in their own global sourcing journey. If I look at our pipeline today, about a fourth will come from infrastructure services...Given that there is an implicit transformation in any infrastructure conversation with cloud but still there is a lot of opportunity in that business. While it may grow slower, because of its base, it will still be huge generator of profits and cash,” Premji said.