Q&A: Wipro chairman and managing director Azim Premji

Azim Premji is chairman and managing director of Indian tech giant Wipro. He has been running the business for 40 years, growing it from a $2m cooking fat company to a $1.8bn IT services organisation. He was also listed as the 25th richest man on the planet by Forbes earlier this year.

silicon.com: How do you see the India market growing over the next few years?
Premji: The forecast from Nasscom is that the industry going forward over four to five years will grow at about 28 per cent a year. I think that's realistic. Industry leaders should be able to grow faster than that, that's the least one can expect from industry leaders because of the amount of consolidation in the market.

How do you deal with such rapid growth?
We have learned how to scale resourcing and hiring, and we have learned to scale induction. I think the biggest challenge is to be able to scale the continuity of culture because you are talking about very large year-on-year growth, you are talking about very young people from diverse backgrounds, and you are talking about people from different cultures, and for that you require a very sustained investment in time from middle management, supervising management and senior management.

What about acquisitions?
The vast majority will be organic. Acquisition will be selective; it will be well sought out companies, it will have a purpose, the purpose will be the strategy, the local footprint, the purpose will be technology, the purpose will be the skills.

And the broader strategy?
We are focusing more on larger deals now - we have put teams together in the past 18 months which address large deals and total outsourcing. We've invested much more in innovation and we are investing more in consultancy.

I think the consultancy arm gives us much more proactivity with customers, understanding of customer requirements.

At the end of the day your reference is your customer - if we do good jobs we can use those good jobs as a reference base to get more good jobs.

It's like software, if you have credibility with the customer in software execution, software development, software maintenance, infrastructure maintenance, the same customer will evaluate you in the areas of consultancy that he is looking at the Accentures for. We are finding that we are able to ramp up fairly well there.

How do you see the market developing?
I think you will see the complete disappearance of the demarcation lines between the Accentures and the top three Indian companies. They are copying our model we are copying their model and the customer is the net gainer. From both sides they get very high quality international services, delivered globally. It's already started to happen.

I think you will have at least two [Indian] companies that are in the top 10 global services providers in the next five years. I think customers will have the top three or four Indian companies in their evaluation set for all major orders.

I think customers will be more and more comfortable dealing with the globally delivered model. I think the industry will get more globalised, it will have more of a mix of the local population that we operate in.

Are India wage increases an issue?
Wages are going up, they're going up 12 to 14 per cent a year. But the nice thing is that if you compare yourself with Western nations our average salary for an engineer from college is about $7,500 a year - a similar engineer in the UK costs $55,000 a year roughly.

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If your salaries were to go up by three per cent a year and ours were to go up by 13 per cent a year it will take 25 years for the two salaries to merge.

So the problem is not that we will get uncompetitive as compared to European and American salaries - the problem is if we don't improve our efficiency and contain our cost per head... we'll get less competitive as compared to the Philippines, the Chinas, the Vietnams the Eastern Europes and that's the challenge.

[So] you've got to establish delivery bases which are also alternatives to India - we have a centre now in Bucharest, in Shanghai, in Portugal, and all these countries are relatively low cost countries.

How do you think recent claims of data leaks from Indian call centres have affected the industry?
These leakages take place everywhere, I'm sure that they take place in call centres in the UK.

I'm not saying we're perfect, I'm not saying we cannot be doing a better job than we are doing but let's not take the situation out of proportion. The few faults committed by a few companies and a few employees, that does not represent the standards of the industry.