IT major Wipro has decided to carve out a whole new entity in the US, the biggest market for Indian IT vendors, to chase deals offered by the American government. The $130-billion spread on the table is far too great a proposition to not have a separate team to look after it, TK Kurien, CEO (IT business), Wipro, told FE.
The US government?s IT contracts have usually gone to American technology companies in the past. The new entity, to be set up in the near future, will be headed by US nationals.
In an exclusive interview with FE, Kurien said the company was in the process of firming up its plans and the proposal is likely to take shape in the next six months. ?We plan to take some teams within us and create this new entity,? Kurien said. ?If you have to get big government contracts in the US, one needs to create an entity which is created and controlled by US nationals, otherwise you will not get on board,? he added.
The biggest challenge faced by the Indian IT companies while pitching for US government contracts is perception. The strong brand associated with the Indian IT sector is of being an outsourcing destination. Such an image has not helped companies in bagging government contracts. Pradeep Mukherji, president and managing partner, Avasant, an IT-BPO advisory firm said: ?Indian companies should try not to be seen as an outsider, who is taking away jobs. They should have a strong local face to get the contracts. You have to build a global image and not seen as an Indian company,? he added.
Kurien agreed to the point that the biggest challenge facing them is the perception of being an Indian company. Earlier, most of the deals in the US government space used to go to local companies like IBM, Accenture and CSC. The government was not keen on outsourcing to foreign companies and wanted to keep it within the country. Moreover, those deals also involved asset takeover, which Indian companies were not capable of handling.
According to Mukherji, with the current slowdown, the US government is looking at outsourcing in areas such cloud and mobility spaces. ?There are lot of opportunities in areas like remote infrastructure management and cloud-based services for Indian companies,? he said.
It is not just Wipro alone that is targeting the US government market. Infosys had formed a separate subsidiary focused on the US government and healthcare market in October, 2009, called Infosys Public Services (IPS) with revenue in excess of $120 million.
Ashok Vemuri, head of Americas, Infosys, while talking to FE said that opportunities for companies like them arose because the technology used by the US government in delivering social services is around 20 years old and they are looking at changing it. For example, Infosys has put the entire city services of Orlando in Florida on the cloud with users able to freely use it as a mobile application.
Given the size and scale of the US market, an increasing number of Indian IT companies are opening up development centres in the region to get closer to their customers. Wipro already has a strong presence in the US with a development centre in Atlanta and plans to open two more such centres. Infosys and Mindtree, too, have similar such units.
