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oil is Wipro\'s fastest growing business unit
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BANGALORE: Quite unlike any other Indian software company, Wipro is finding that oil is indeed its black gold. The energy and utilities space, which is not a traditional bread-winner for IT services companies, is proving to be so lucrative for Wipro that it is on the verge of earning the Bangalore-based company $1 billion (Rs 5,400 crore) in annual revenue.

Wipro's energy and utilities vertical, contributing around $900 million, or 15% of total sales, is now the fastest-growing business unit thanks to the April 2011 acquisition of the oil and gas practice of US-based Scientific Applications International Corp (SAIC) for about $150 million.

In the three months to December 31, the unit grew 18% compared to a year ago — that is at least three times as fast as any other business unit in Wipro, which is just climbing out of a sales slump. Besides the leadership transition in early 2011 and the subsequent organisational restructuring, Wipro was hobbled by the slowdown in the US and Europe that forced corporations there to adopt a cautious approach towards technology spending.

"The acquisition helped us offer consulting and specialised services that are beyond IT infrastructure management or SAP implementation," said Anand Padmanabhan, who manages the energy business unit out of London for Wipro.

Fundamental shifts in the energy industry — where the focus is fast moving from crude oil to shale gas and now gas hydrates — are throwing up opportunities for Wipro, which counts the world's second and third-largest oil companies, BP and Royal Dutch Shell, among its clients.

"Six years ago, nobody was talking about shale and now we are talking of 40% of US energy requirements being met by shale gas," said Padmanabhan about the shifting priorities in the industry. "All the big cats with muscle to invest are investing," he added.

From being a primarily Europe-focused, and offering downstream IT services to oil companies, the SAIC acquisition helped Wipro expand its client base to the US as well as complement its offerings with upstream services that go right up to the oil rig. Beyond basic IT support services, Wipro now works with oil companies to analyse the copious amount of data generated by sensitive sonar probes sent to oil wells to generate intelligence on the presence of oil or gas. "Energy companies globally are facing skill shortages, cost pressures, and need to invest in new technologies, creating opportunities for companies such as Wipro that already have a head start," said Jimit Arora, vice-president at Everest Group, a technology researcher and advisory.

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