Anticipating more manufacturing-related outsourcing deals, Wipro plans to open development centres in Europe.
The IT major is now planning to open a development centre in Germany.
“We see Europe opening up to Indian outsourcers and tap Germany and nearby markets (Nordic regions),” T.K. Kurien, Executive Director and CEO, IT Business, Wipro, told
Wipro has centres in the UK. It already has a data centre near Dusseldorf set up for a leading financial institution. The company is in advanced stages of finalising the location for the German development centre.
Industry watchers feel that the manufacturing sector represents almost 25 per cent of Germany’s GDP which is the highest in Europe and double when compared to the US and the UK. Also, a presence in Germany and Nordics would help Wipro sustain growth.
Wipro in the third quarter of 2013 fiscal saw revenue contribution from Europe go up to 29.6 per cent with manufacturing contributing 18.7 per cent. In comparison, Cognizant’s Europe revenues have crossed $1 billion in 2011, ahead of others.
Despite the Indian IT sector still getting in excess of 60 per cent of its export revenues from US, companies believe that the Euro Zone crisis could be a catalyst for more outsourcing deals, especially in the manufacturing sector from European companies.
“Wipro’s intent to open a delivery centre in Germany for the manufacturing industry reflects that Indian IT firms are investing in Germany [Europe] for the long-term and leveraging the downturn as an opportunity to increase their presence in continental Europe,” Peter Schumacher, CEO of Value Leadership Group.
Germany, at present, employs about six lakh software engineers and 58 per cent of German firms are concerned about talent shortages in IT, which is resulting in more offshoring to destinations like India, according to Value Leadership. Also, according to German IT Association data, unemployment in Germany in the IT industry is 3.1 per cent, which is lower than other European countries.
venkatesh.ganesh@thehindu.co.in