Wipro Sweeps Across Europe

On a mission to become a global outsourcing player, Indian IT services giant Wipro Ltd. continues to gobble up companies faster than Pacman -- this time bolstering its presence in the Scandinavian wireless market with the acquisition of Saraware Oy , a Finnish provider of design and engineering services, for €25 million (US$31.85 million).

Saraware, which specializes in wireless network software development and Tetra networks, will strengthen Wipro's position with companies like Ericsson AB (Nasdaq: ERIC) and Nokia Corp. (NYSE: NOK) -- which account for around half of the global wireless equipment market between them.

Wipro has focused on acquiring niche technologies and intellectual property for the R&D services side of its business of late, expanding its presence throughout Europe and the U.S.

In a statement, Sudip Nandy, Wipro's chief strategy officer, said that the company has gained a presence in Portugal, Austria, France, and Germany through acquisitions over the past few months. Saraware is its sixth deal in as many months.

It followed up the December purchase of Austrian semiconductor designer NewLogic Technologies AG with California-based cMango Inc. , a Business Service Management (BSM) company, in February. (See Wipro Buys US Integrator and Wipro Acquires NewLogic.) In May, it picked up Quantech Global Services Inc. , a player in computer-aided design and engineering services, with offices in the U.S., Germany, and India. It has also acquired New Jersey-based payment services firm Mpower and just last week snatched up Enabler, a Portugese retail technology specialist.

"The Saraware announcement will put some pressure on the key players in the telecoms R&D services market, namely TietoEnator and to a lesser extent Teleca," writes Ovum Ltd. ’s Dominique Raviart in an analyst note. "More than this, it signals that Wipro is serious about the software-related part of the R&D services market."

In addition to its geographic advantages, Saraware’s software will complement Wipro's work on base-station controllers and secure mobile platforms.

"Meanwhile, most R&D service specialists still have a conservative attitude towards offshore sourcing," observes Raviart. "There is a real window of opportunity here for Wipro."

According to a note from Ovum analyst Samad Masood, “Europe is a crucial market for all Indian offshore players, but more so for Wipro because it is more heavily weighted towards the continent than most of its rivals such as TCS, Infosys, or Satyam. Sixty-percent of its largest customers are headquartered on the continent or in the U.K., and European revenues have now crossed the $500m mark. Wipro is targeting $1bn from the region in the next two years through both organic and acquisitive growth.”

— Nicole Willing, Reporter, Light Reading