VENDOR PROFILE

Wipro — Vendor Profile Series for Research and

Development/Product Engineering Services
Mukesh Dialani

IDC OPINION
Wipro Technologies, a division of Wipro Ltd. (NYSE: WIT), is one of the earliest
global R&D and IT vendors to be PCMM Level 5 and SEI CMM Level 5 certified.
www.idc.com

Wipro Technologies was recently assessed at Level 5 for CMMI v1.2 across offshore
and onsite development centers. It is a leading product engineering and support
service providers worldwide. In studying its profile, IDC has made the following
observations:
F.508.935.4015

! Wipro has a well-defined and robust partner ecosystem. This enables it to

provide a complete range of R&D/product engineering solutions to its customers.
It uses the "extended engineering" model (where a technology company opens
its R&D department to external engineering partners) to leverage R&D
P.508.872.8200

investment, access new knowledge, and gain experience globally.

! Wipro's revenue for these services grew by 30% as against head count growth of
24.1%. This speaks volumes about Wipro's capability to maximize its asset
utilization.
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA

! Wipro has a well-defined end-to-end service offering strategy. This will enable it
to get additional portions of its customers' business.

! Wipro's top 5 customers contribute to about 33.5% of its revenue. This ratio is on
the higher side, and Wipro should work toward reducing this dependency to
about 25%.

Filing Information: December 2008, IDC #215589, Volume: 1

Global Sourcing Strategies: Vendor Profile
IN THIS VENDOR PROFILE
This IDC Vendor Profile profiles Wipro's R&D/product engineering services, including
the evolution of these services, Wipro's vision, core competencies, differentiators,
financial and employee data, key markets, infrastructure, certification, strategic
investments, partnerships, and alliances. Some customer examples are also
included.

This document is part of a series of profiles of major vendors in the R&D/product

engineering services. Other featured vendors will include Accenture, Satyam, HCL
Technologies, EDS, Infosys, Tata Consultancy Services, Sierra Atlantic, Patni, and
Megasoft/BlueAlly. Subsequently, IDC intends to publish all these profiles in one
major competitive analysis document.

SITUATION OVERVIEW

Company Overview

Table 1 presents Wipro company details.

T ABLE 1

Wipro at a Glance

Category Data

Headquarters Bangalore, India

Global business focus Research and development services, IT solutions and

services, including systems integration, information
systems outsourcing, package implementation, software
application development, and maintenance services

2006 global service revenue US$2,185 million

2006 global revenue for R&D/product engineering services US$600 million

2006 R&D/product engineering services share of total service 0.2745

revenue

2007 global service revenue US$3,128 million

2007 global revenue for R&D/product engineering services US$780 million

2007 R&D/product engineering services share of total service 24.9%

revenue

2006–2007 R&D/product engineering services revenue growth 30%

2006 global head count 73,000

2006 R&D/product engineering head count 14,500

2 #215589 ©2008 IDC

 T ABLE 1

Wipro at a Glance

Category Data

2007 global head count 88,000

2007 R&D/product engineering head count 18,000

2006–2007 R&D/product engineering head count growth 24.1%

Investment in infrastructure (e.g., Labs, IP creation) and NA

employee certification

Global R&D/product engineering footprint India, China, Singapore, Japan, Austria, France, Finland,
Germany, Canada, and United States

Source: IDC, 2008

Wipro — Evolution of R&D/Product Engineering Services

! Phase 1. In the 1980s, Wipro diversified into information technology and formed
an IT division. In 1983, this entity was split into two divisions — one catering to
domestic needs and manufacture of hardware (Wipro Infotech) and the other
(Wipro Systems) to international customers, building software products, and
providing services.

Supplying servers to suit the needs of the domestic market, the hardware R&D
team gained valuable experience in system architecture in the computing
domain.

! Phase 2. With the onset of liberalization in India in the early 1990s, the R&D
team expanded its horizon to utilize its expertise to service clients across
geographies. This 50-member-strong R&D team was christened "Global R&D."

The Global R&D team forged an alliance with VLSI Technology Inc. (now part of
Royal Philips Electronics) to further extend its system design expertise into PC
chipset design.

! Phase 3. Wipro was early to realize the compelling need for extended on-chip
functionality giving rise to the increasing use of embedded devices. Since the
1990s, Wipro has focused on building domain expertise to service the
automotive, avionics, mobile, semiconductor, consumer electronics, computing
systems, industrial automation, telecom, storage, and medical devices.

The focus on increasing technology competency was also increased with a

strong focus on key technologies that include VLSI and system design, Windows,
RTOS, Unix, and multimedia.

©2008 IDC #215589 3

 The service portfolio was also extended to deliver end-to-end solutions to clients
right from conceptualization to production-ready deliverables — i.e., starting from
architecture design of a product to manufacturing support.

! Current situation. Wipro's technology, media, and telecom and product

engineering (TPE) solutions business is a leading global third-party engineering
and technology services group and contributes about a third of Wipro
Technologies' revenue, with a focused manpower base of 18,000 (March 2007).
This group has wide presence, with sales and delivery capabilities outside of
India in United States, Europe, and Asia. With experience spanning across
domains and strong alliances with leading firms today, this group works globally
with:

# All tier 1 high-tech equipment manufactures

# 10 of the top 15 leading communication service providers

# 7 of the top 10 mobile terminal vendors

# 6 of the top 10 mobile chipset vendors

# 15 of the top 20 semiconductor firms

Company Vision for Research and

Development/Product Engineering Services

Product engineering as a service continues to be extremely important in the overall

services portfolio for Wipro. Going forward, Wipro would like to see itself continuing to
be one of the leading players in the offshore R&D services market. As a move toward
this vision, it has been investing to build capability in newer markets that include
medical, avionics, and industrial automation. Product engineering services are a key
differentiator for Wipro. Additionally, this group provides a complete array of services
to its clients and enables a broader reach in the market.

Core Competencies

The following components are at the core of Wipro's strategy to be competitive in its
market:

! Quality focus. In the current highly competitive environment, Wipro puts in a

significant amount of resources to ensure optimal quality levels for its clients.
Wipro has many quality certifications worldwide. It has been assessed at PCMM
Level 5, SEI CMM Level 5, and SEI CMMI v1.1 Level 5. Wipro has domain-
specific quality certifications that include AS9100 for aerospace and ISO 13485
certification for medical devices, and it is certified at Level 5 for
AutomotiveSPICE certification. Wipro is also certified for ISO 14001
environmental standards and BS7799 for information and assets security
standards. These certifications bear testimony to Wipro's relentless quality
journey to excel in IT services.

4 #215589 ©2008 IDC

 The benefits of these certifications translate into the following for Wipro's
customers:

# Structured method of handling project risks

# Strong metrics program and defect prevention at project/organizational level

# Reduced field error rate (defects per KLOC)

# Decreased schedule and effort deviation

# Increased defect removal efficiency and productivity (LOC/person/day)

# Ability to provide value-added services — process and Six Sigma

consultancy

# Six Sigma focus in software development for continuous improvement

# Protection of customer IP and creating security awareness

Wipro has a well-documented quality management system, christened "Veloci-q,"

and is compliant with all the clauses as mentioned in the ISO9000, SEI CMM
(Level 5), SEI CMMi (Level 5), and TL9000 standards. Veloci-q is also enriched
with tools and techniques of Six Sigma.

! Innovation focus. Wipro used "applied innovation," which is the ability to infuse
newer ideas and newer ways of doing things, into all parts of the organization
and improved business outcomes, often without major or disruptive change. It is
a 360-degree business approach covering process, delivery, business, and
technology innovations that help Wipro to work collaboratively with clients for
cost takeouts, speed to market, and new business opportunities. Wipro has
focused on the following initiatives:

# Pioneering new service lines that can be delivered on the global delivery
model.

# Applying lean management, Six Sigma, and "factory model" techniques to

software development

# Instituting a dedicated "innovation council" that funds over 50 projects every

year in areas of product, process, and services innovation

# Creating over 55 industry-facing "Centers of Excellence" to build domain

competence and point solutions

! Domain knowledge. Wipro's dedicated teams for each of the industry verticals
have the technical capability and domain knowledge to quickly turn around a
product design from requirements to proof of concept or prototypes. Wipro has
dedicated product development teams for the following:

# Telecom (equipment makers, device makers, service providers)

©2008 IDC #215589 5

 # Computing (hardware, software, high-performance computing, storage
vendors, gaming and animation)

# Embedded (semiconductors, printers and peripherals, consumer electronics,

automotive electronics, medical devices, aerospace, industrial automation,
etc.)

! Array of services. Furthermore, Wipro's extensive ecosystem of alliances and

partners makes it possible to go into volume production of products while
maintaining the lowest possible TCO (total cost of ownership) without sacrificing
product quality.

Service Offerings

The following summarizes Wipro's key R&D/product engineering service offerings:

! Life-cycle services. Many Wipro customers involve it from the concept stage.
This includes product strategy, business value analysis, competitive analysis,
market mapping, and business planning.

Following a detailed business plan, Wipro helps clients with product realization.
This includes the macro- and microarchitecture development and design. Some
of the activities here are turnkey ASIC design, SoC, board FPGAs, IPs, OS and
middleware porting, device drivers and protocol stacks interface logic, and DSP
integration. Wipro develops the software architecture and provides a significant
chunk of its software services in the application development and maintenance
(ADM) area. Wipro also provides mechanical design services to give a complete
product design. Wipro has also acted as a system integrator integrating third-
party components so as to complete the product design. The complete
product/system prototype is then subjected to a battery of functional and
environmental tests before going in for pilot production. For the release to market
version, Wipro also helps the client with the technical document preparation.

Extending its services beyond the new product development phase, after product
launch, Wipro undertakes a series of sustenance and support activities for its
customers. These services are for value engineering, product migration to new
geographies, bug fixing, and technical support (Level 1 to Level 4).

As clients are viewing services providers as more of strategic partners rather

than vendors, Wipro has been investing internally to provide greater value.
Catering to the need for hands-free outsourcing, Wipro has built a strong
consulting practice, leading connectivity IP portfolio, and a strong manufacturing
ecosystem (Silicon, PCB, and product assembly) with the intention of becoming a
one-stop shop for its customers.

! Consulting. With more than a decade of experience in researching, analyzing,

and documenting the business value of technology solutions, Wipro's product
strategy and architecture (PSA) practice is strategically placed to help technology
vendors and enterprises develop innovative and effective product and IT
strategies that have had proven value in business success. Wipro's PSA practice

6 #215589 ©2008 IDC

 combines deep technology enterprise in IT and embedded systems, broad
strategic planning skills, proficiency in global strategies, and understanding of
high-growth emerging countries.

Integrating market-specific knowledge and experience in emerging technologies

and standards, the PSA practice provides a unique combination that can meet
the complex demands of the industry. With hands-on knowledge and experience,
consultants and technical architects have lent expertise and have worked with
global enterprises and service providers in architecting and implementing large-
scale systems.

! Intellectual property (IP). Wipro, along with NewLogic, offers an industry-

leading portfolio of semiconductor intellectual property cores for complex wireless
and wireline applications; these include wireless LAN (IEEE 802.11 a/b/g and n),
Bluetooth, ultrawideband (UWB), wireless USB, and IEEE1394 (FireWire). Wipro
acquired Austria-based NewLogic in December 2005. The combined group is
referred to as Wipro-NewLogic (WNL).

Wipro offers the complete portfolio of IP cores containing software, silicon-proven

wireless LAN, multiband radio module and analog/mixed-signal/digital blocks
such as AFEs, synthesizers, PLLs, and LVDS driver/receiver.

Wipro has also developed a set of IPs in the automotive electronics area that
include Hands Free Telephony Framework, WiproCheck (to test for MISRA
compliance), and Autosar-compliant BSW software components and tools.

In the consumer electronics domain, Wipro is a leading provider of IP, namely IP

for DTV: digital video broadcasting (DVB), ATSC, OpenCable, and integrated
services digital broadcasting (ISDB). These set of IPs are developed for specific
geos, as follows:

# Americas: ATSC stack, DVR STB, hybrid IPTV, ISDB-T, ISDB — S STB

# Europe: pan-European DVB stack, car TV system

# Japan: digital TV

# China and Taiwan: – High-end HD STB

Wipro has been developing IPs since 1996 and is a leading player in the sale of
semiconductor IP with customers worldwide that include LSI, Infineon, Thomson,
Yamaha, Philips, eRide, Mediatek, Zoran, TiVo, Hirchmann Car
Communications, and many others.

! Manufacturing support and certification. Going beyond the traditional design

services, Wipro's product engineering group provides all services required by a
client to take the design into productization. These services include working with
partners to provide prototype samples (IC, PCB, enclosure); subject the product
to a series of functional, safety, and environmental tests; and finally take the
product into volume production.

©2008 IDC #215589 7

 Wipro has invested significantly over the past few years to have the necessary
partnerships, infrastructure(labs and test equipment), and a team of experts that
provides consultation to the design teams. These ecosystem partnerships
include fabs (TSMC, SMIC, Tower), packaging houses (SPEL), PCB (WUS,
Multek, Wruth, Elcoteq, Avalon, etc.), and product compliance (TUV, UL).

Table 2 summarizes Wipro's R&D/product engineering services offering by industry.

T ABLE 2

Wipro Summary of R&D/Product Engineering Service Offering by Industry

Computing
Hardware/
Software/
Storage/
Aerospace/ Office Consumer Medical Industrial
Telecom Defense Automotive Automation Electronics Equipment Automation

PLM services X X X X X X X

Embedded services X X X X X X X

Engineering design X X X X X X X

Semiconductor X X X X X X X
design and
development

Plant design and X X X X X X X

automation

Software product X X X X X X X
development

Source: IDC, 2008

Addressing Customers' Intellectual Property

Concerns

Wipro complies with the BS7799 regulations that provide a comprehensive security
and safety to the projects executed for the customer. Wipro has a documented IP
protection policy, which assesses risk levels within the organization and flows down to
every resource dedicated to the customer. Over 100 customers have audited Wipro's
IPR protection.

Table 3 highlights Wipro's educational alliances, while Table 4 gives an insight into
Wipro's acquisitions to strengthen its R&D/product engineering services offering.

8 #215589 ©2008 IDC

 T ABLE 3

Wipro Educational Alliances

Educational Skills Sourced

Institution Location Nature of Alliance/Focus Area from Institution

IISC Bangalore Aerospace Network Research Consortium Joint research programs

(ANRC), with IISC, Boeing, and the industry,
will develop an "Integrated Aerospace
Network platform" by leveraging
communication technologies and its related
expertise on both ground and airborne system
applications.

IIT Delhi Research on wireless technology Joint research programs

IIT Kharagpur VLSI and wireless network planning and Joint research programs
optimization research

IIT Chennai DSP related training and research Joint research and training
programs

IIIT Bangalore Image recognition research Joint research programs

IIM Bangalore Graduate continuing program Training and development

Symbiosis Pune Graduate continuing program Training and development

Stanford University United States Graduate continuing program Training and development

Top 50 engineering Across India Memorandum of Understanding with these Campus development and
colleges in India colleges for industry training and sourcing of recruitment
talent. Wipro carries out a cross-campus
project every year, "magnum opus" that
acclimatizes students with industry
requirements. Last year this event was a
single project consisting of 450 students from
55 campuses and 80 mentors from Wipro.

IIT Mumbai Courseware training and propagation across Educational program for
other engineering colleges undergraduates

Source: IDC, 2008

©2008 IDC #215589 9

 T ABLE 4

Wipro Acquisitions

Name of Company Joint Venture or Acquired Year Acquired Service Offering/Skills Industry Focus

Saraware Acquired 2006 Wireless Network Communications

Infrastructure

NewLogic Acquired 2005 Wireless, RFID, Analog, IP Semiconductors

components

Oki Techno Centre, Acquired 2007 Wireless design capability, Semiconductors

Singapore CMOS RF, and IPs

Source: IDC, 2008

Table 5 highlights Wipro's alliances, and Table 6 summarizes its customer-acquisition

trend.

T ABLE 5

Wipro Industry Alliances

Alliance Complementing Skills

ARM, ARM Artisan In 1999, Wipro Technologies became the second ARM-approved third-party design
center in the ARM technology access program. The agreement enables Wipro to
utilize ARM technology in the design of complex ARM processor–based system on
chips for customers that are existing or potential ARM licensees. Leveraging on
their extensive intellectual property (IP) portfolio, systems knowledge and
experience with ARM cores and technology, Wipro is targeting specific vertical
markets with system-on-a-chip (SoC) solutions that meet a superset of application
needs. These are predominantly low-power, high-performing consumer application
devices for the mobile and Internet world.

Embedded Linux Wipro Technologies is a corporate member of the Embedded Linux Consortium
(ELC). The ELC is a nonprofit, vendor-neutral trade association whose goal is to
advance and promote Linux, throughout the embedded, applied, and appliance
computing markets.

Intel Wipro is an associate member of the Intel Communications Alliance. The Intel
Communications Alliance is a community of communications and embedded
developers and solutions providers committed to the development of modular,
standards-based solutions on Intel technologies.

Autosar Premium Membership Wipro is a premium member of the AUTOSAR consortium and, as a part of this
membership, its team is working on the work packages related to AUTOSAR
libraries and methodology validation. Wipro is also developing a set of IP

10 #215589 ©2008 IDC

 T ABLE 5

Wipro Industry Alliances

Alliance Complementing Skills

components compliant to AUTOSAR including a BSW configuration tool.

Blu-ray Wipro is a Blu Ray Disc Associations (BDA) Format and Logo Licensee (FLLA)
licensee for ROM2. Wipro has invested in building expertise on Blu-ray. This
includes expertise in Blu-ray middleware components, file systems, and application
software. Wipro has also acquired the license to sublicense proven BD middleware
software including the HDMV and BD-J components.

BREW Alliance Wipro has two BREW development centers with a workforce of 250 currently
engaged in developing solutions on the BREW Mobile Platform (BMP).

Continua Health Alliance Wipro is a participating member of Continua Health Alliance formed by the medical
devices industry for the interoperability of medical devices.

MS Windows embedded Wipro Technologies is a Gold-level Microsoft Windows Embedded Partner (WEP)
as a system integrator and an independent software vendor. The Gold-level status
is a reflection of Wipro's strength and expertise as a Windows CE and XP
Embedded developer and its excellence in building and enabling Windows-powered
solutions. Microsoft recognizes Wipro's leadership position in this space and its role
in contributing to and participation in design wins on the Windows Embedded
platform.

Symbian Wipro has entered into a strategic partnership with Symbian, a company engaged in
creating the standard platform for next-generation wireless devices. The Wipro
Symbian Competence Centre delivers design and development services for smart
phones and the mobile computing market. Wipro is among the 11 leading software
development and system integration companies initially appointed by Symbian.

Tensilica Wipro is a Tensilica Authorized Design Center with extensive knowledge on the
Xtensa architecture and Diamond processors, configuration and software
development tool suite, access to technology updates, ongoing support and direct
access to applications engineering support personnel.

Texas Instruments Wipro is TI's third-party vendor for providing solutions around xStream DSP, used in
high-speed printers. Wipro is also the third-party vendor for providing solutions
around TI's Netcam.

TSMC Wipro has forged strategic alliances not only to provide customers with a
comprehensive and advanced system-on-a-chip/ASIC design but also to offer
complete embedded solution needed to rapidly take a product to market. Its
SoC/ASIC designs can be delivered as market-ready products through specialized
VLSI design groups that perform complete system-level product development and
then support designs through to silicon production at partner foundries that include
TSMC and Hyundai.

UMC UMC is a world-leading semiconductor foundry that manufactures advanced

process ICs for applications spanning every major sector of the semiconductor
industry. UMC delivers the cutting-edge foundry technologies that enable
sophisticated system-on-a-chip designs, including 0.13 micron copper/low k,
embedded DRAM, and mixed signal/RFCMOS. In addition, UMC is a leader in

©2008 IDC #215589 11

 T ABLE 5

Wipro Industry Alliances

Alliance Complementing Skills

300mm manufacturing, with three 300mm fabs strategically located worldwide. UMC
employs over 8,500 people worldwide and has offices in Taiwan, Japan, Singapore,
Europe, and the United States.

Tessolve The Tessolve and Wipro alliance mission is to provide infrastructure for
semiconductor product companies in test, product, and manufacturing engineering
services to succeed in bringing their product to market in the shortest time and
lowest cost. With Wipro's VLSI and system design expertise and deep
understanding of varied application domains, combined with Tessolve's test
infrastructure and product engineering expertise, Wipro hopes to provide a solution
that drives synergy between design and test activities to deliver its customers'
products to production in the shortest possible time.

Source: IDC, 2008

T ABLE 6

Wipro Customers

2006 2007

Total Number of customers 250 285

Top customer as a percentage of total revenue NA 9.3%

Top 5 customers as a percentage of total revenue NA 33.5%

Source: IDC, 2008

FUTURE OUTLOOK
Wipro has done a good job in investing in and creating the right infrastructure to
support this business. This is obvious from the revenue that accrues out of the
services provided by Wipro in this domain. If Wipro continues this performance, it will
soon achieve $1 billion in revenue from these services.

ESSENTIAL GUIDANCE

Advice for Wipro

! In the current global economic scenario, certain industries such as automotive

will cut back spending, and Wipro needs to ensure that it derisks its model and
reduces dependency on any industry or a small set of customers.

12 #215589 ©2008 IDC

! With the increased focus on green as a strategic issue for companies to
implement, Wipro should look to provide R&D services that help customers
develop more green technologies and capabilities.

! With greater customer need to ensure that products are "defect free" with a focus
on reducing deployment and maintenance costs, Wipro should highlight its
testing services with a focus on quality assurance.

! Wipro should look to providing a value proposition that focuses on building

products that support efficient operations of customer's technology portfolios,
whether IT specific or industry specific.

! For the longer term, Wipro should look to invest in newer development models,
such as PAAS (platform as a service), and build strategic partnerships with
service providers.

LE ARN MORE

Related Research

! IBM: Harnessing the Global Ecosystem to Accelerate Time to Market — But Is

There More to Do? (IDC #lcUS21472908, October 2008)

! Outsourcing Research and Development/Product Engineering Services — Is A

Hybrid Strategy the Way to Go? (IDC #211835, April 2008)

! Outsourcing Research and Development — Customers Want to Cut Costs, and

Vendors Are Reaping the Benefits (IDC #209385, November 2007)

! IDC's Worldwide R&D Product Engineering Services Taxonomy, 2007 (IDC

#209093, October 2007)

! Research and Development/Product Engineering Services — A New Frontier of

Opportunities (IDC #208397, August 2007)

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©2008 IDC #215589 13