Global Computer Related Services An Industry Perspective WTO Cross-Border Supply Symposium Santosh Head, Talent Engagement & Development, Europe Sept 28,

Global Computer Related ServicesAn Industry Perspective

WTO Cross-Border Supply Symposium

SantoshHead, Talent Engagement & Development, Europe

Sept 28, 2005

Wipro confidential 2

The agenda

Industry Snapshot

Wipro Advantage

Outlook Going Forward & Key Challenges

1

2

3

Wipro confidential 3

Landscape of Computer Related (IT) Service –India Advantage…

Application Development

Systems Integration

Product Engineering

Consulting

ERP Services

BPO

Infrastructure Management

IndependentTesting

Services from India touch all three aspects of IT – software, hardware & network

India’s Emergence as IT Sourcing Hub –

Key Drivers

• Highly Talented Labor Pool

• Cost Arbitrage

• Leapfrog increases in Telecom reliability

in 90’s

• Quality Advantage

• Faster Time to Market

• 24 Hour Service Window

• Enables customers internal work-force to

focus on ‘core’ & strategy

Range of Services

Wipro confidential 4

Translating into >30% Growth for Indian Industry;.. & Corresponding Cost Savings for Customers

2.64

6.27.7

9.6

12.8

17.2

22

0

5

10

15

20

25

98-99 99-00 00-01 01 - 02 02- 03 03- 04 '04-05 05-06E

Americas, 69.4%

Europe, 22.6%

Japan, 3.0%

Africa, 0.6%

Others, 4.4%

$ Bn

Source: NASSCOM, Strategic Review 2005

Geo Distribution

Export of Computer Related Services

Wipro confidential 5

Offshore, 7.5%

Non-Offshore,

96.6

And Yet, India’s True Potential is Far from Realized

India, 72%

Philippines, 8%

Eastern Europe, 8%

China, 7%Others, 1%

Middle East & Africa, 2%

Latin America, 2%

Worldwide Offshore IT Services ExportShare by Region, 2003

Share of Offshore in Total IT Services Pie

Adopted from IDC, Gartner & Nasscom Estimates

Even at 72% Share of total offshore spend, India accounts for less than 6% of Global IT Spend

Total Global IT Spend (2005): $640 Bn

Wipro confidential 6

Even as more & more Global Corporates Adopt Offshore Model…

Goldman Sachs, September 2005

“we continue to expect a robust demand backdrop for offshore services over the next two

years which should drive sustained growth of at least 25%-30%. In our opinion, the

predominant factor driving growth is the continued adoption of the offshore model,

which by our estimates continues to be low.

From a client IT budget perspective, our estimates suggest that that the offshore

model has penetrated less than 10% of Global 500 (G-500) IT budgets for core

application maintenance and development work.”

Leveraging Offshore Model = Delivering Greater Shareholder Value through Smart Sourcing

Wipro confidential 7

The agenda

Industry Snapshot

Wipro Advantage

Outlook Going Forward & Key Challenges

1

2

3

Wipro confidential 8

Ranked leader by IDC, MetaGroup, Forrester – 2004Awarded the highest rating in Stakeholder Value Creation & Corporate Governance by ICRA,

an Associate of Moody’s Investor Services

Partner to industry leaders and challengers

89 global 500 clients

151 clients among Forbes 2000

Diverse talent pool

23 nationalities

2000 domain consultants

Sustained growth

CAGR of 42% in last 5 years

Part of NYSE’s TMT (Technology-Media-Telecom) Index, NSE Nifty Index and BSE Sensex

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

217 226288

339421 430

10 13 19 2942 42

(thousands)

(millions USD)384 475 625 934

13541595*

Clients

Employees

Revenues

Wipro Today

*June Quarter Revenues Annualized

Incorporated in 1945; 60 years track record of growth & profitability

IPO in 1946; Listed at NYSE [WIT] in 2000

Entered IT business in 1980s; IT Services business launched in 1991

Our history – a track record of success

Compounded Growth Rate- First 59 Years:

Revenues: 21%, Net Income: 31%, M-Cap: 24%

IT Services Foot-Print

Wipro confidential 9

Growth Envisaged Across the Range of Services

Constantly incubating newer services

Source: Mckinsey-NASSCOM Study, NASSCOM, Company estimate ( all figures in USD B) Percentages below the pie chart represent Wipro’s distribution of Revenues for the Quarter ended June 2005

IT Enabled Services / BPO

11%

PackageImplementation

11%

Infrastructure Outsourcing

8%

Consulting 5%

CustomApp Dev &

Maintenance 25%

1.7

6.5

0.3

3.6

5.2

13.5

0.3

3.6

0.6

4.9

Indian Export Potential*

FY04

FY09CAGR 21%

CAGR 64%

CAGR 64%CAGR 52%

CAGR 31%

Wipro’s Global IT Revenue pie

3.6

21CAGR 42%

R&D Services 32%

Q1 2005-06

$398.5 M

Testing Services

8%

1.1

3.1CAGR 23%

Wipro confidential 10

Manpower Demand-Supply Scenario:Wipro- Preferred IT Employer

One of the top 3 leading recruiters in India

Hired over 15000 employees in last one year

Has a career portal with active applicants of over 300,000.

Recruits from over 160 leading engineering and management colleges.

One of the most preferred employers for the top class talent in India.

Wipro career portal

Offer

Evaluation

100%

15%

4%

0.8%

Tra

ck

ap

pli

ca

nt

Retain

Candidate applications

Screen / manage

2001- 02 2002- 03 2003- 04 2004- 05 2005- 06 2006- 07 2007- 08 2008- 09

Total Manpower in IT Services 416 490 588 697 839 1010 1215 1462Additional Manpower Required in IT Services

56 74 98 109 142 171 205 247

Supply of IT Engineering Degree Graduates 71 81 95 100 111 117 123 129

Manpower Excess 15 7 -3 -9 -31 -54 -82 -118Supply of IT Engineering Graduates (Degree & Diploma)

115 127 141 165 181 193 203 213

Manpower Excess 59 53 43 56 39 22 -2 -34Total Supply Non IT + Graduates Entering IT

67 74 70 70 70 70 70 70

Manpower Excess 126 127 113 126 109 92 68 36

Wipro confidential 11

Q-cult: Enterprise-wide quality culture for continuous improvement

4,000+ employees trained in Six Sigma methodologies

204 certified black belts and 10 master black belts

Over 700 PMI certified consultants, highest in India

All fresh recruits undergo a 3 day Veloci-Q training

33% business parameters for the Wipro CEO relate to quality

Proc

ess

Technology

People

SixSigma

World’s first SEI CMM/CMMI Level 5 IT services company (1998-2002)

BS7799 ISO 9000

Worlds 1st IT Services Company to

use Six Sigma (1999)

1st company outside the USA to receive IEEE award (2003)

Worlds 1st PCMM Level 5 software company (2001)

“Wipro clients see additional application maintenance productivity of 10% to 15% from added familiarity with systems; another 10% to 15% raise in productivity after applying Wipro's CMM-based methodology and consolidating redundant programs applications; and yet another 3% to 30% productivity improvement thanks to process automation and tools”

Forrester

Wipro confidential 12

“An increasing number of offshore players are building greater presence in the United States. Examples include Wipro, with its acquisition of the consulting company formerly known as NerveWire ” - US customer experiences and best practices when going offshore, IDC, May 2004

What analysts speak about us

- No Longer Off-Broadway: Offshore Moving to Center Stage, META Group, May 2004

“Wipro's most recent annual results provide further validation that upscale/upstream services provided by "offshore" firms are now mature ”

“…because of its brand, impressive size, and breadth of capability, Wipro is often selected as a strategic partner by customers seeking large, broad-based capability in their primary offshore outsourcing providers. . “- Indian Offshore Suppliers: The Market Landscape, Forrester, April, 2004

Wipro confidential 13

The agenda

Industry Snapshot

Wipro Advantage

Outlook Going Forward &Key Challenges

1

2

3

Wipro confidential 14

India continues to rank as the preferred destination…

Likely to benefit disproportionately from Offshoring Drive

ChinaCIS

Mexico

India

Philippines

People Sophistication(Number, Cost, Language Skills)

Ve

nd

or

So

ph

isti

ca

tio

n(N

um

be

r, Q

ua

lity

)

Russia

Co

st

Quality of Supply(Resource Availability, CMM Level, Cultural Fit)

China

Hungary

Philippines

Malaysia

Mexico

India

Ireland Israel

Singapore

IndiaLow CostHigh Quality Development

Source: McKinsey-NASSCOM study

Deep Rooted strength for sustained global market-share gain…

4.7

0.5

0.9

1.8

1.9

12.6

17.2

39.6

Others

Mexico

Philippines

Eastern Europe

China

Canada

India

Total

Source: Nasscom

10.0

1.1

2.6

6.4

5.0

20.9

48.0

94.0

India - the Preferred Offshore Destination

2004 2008

Wipro confidential 15

And Yet, There Are Challenges…

• Immigration & Visa Issues

• Universal Recognition of Qualifications, Experience and Training

• Employment laws enforcing local hiring

• Wage Parity Insisted upon

• Social Security Tax

• Tax Withholding

Movement of Employees

Wipro confidential 16

And Yet, There Are Challenges…

• Structure of Entity (Branch, JV, Fully owned Subsidiary etc.)

• Restrictions on Foreign Investments & Local equity participations

• Remittance of foreign exchange

• Staffing & Management conditions

• Restricted Access to certain market segments based on the structure

• Dual Taxation

Government Regulation on Business Entity & Vendor Selection

Wipro confidential 17

And Yet, There Are Challenges…

Macro environment related

• Improving quality of technical education in India

• Challenges posed by Urban infrastructure

• Preparing for competition from other low cost countries

Business model related

• Expanding the breadth of service offering

• Managing scale without diluting quality & delivery excellence

• Expanding geographies & adapting to local language and cultures

Financial

• Adverse currency fluctuations

• Managing wage inflation

• M&A and their impact on financials

Other Challenges

Wipro confidential 18

Conclusion

• Offshore Model is a Great Opportunity for Developed nations to achieve

Highest Quality services at reasonable prices

• Visa & Immigration, Taxation, Protectionist Law and Uniformity in

Qualification are some of the key challenges still faced by a service

provider like us…

• A uniform GATS framework and commitment will provide the right

impetus to the growth of Cross-Border IT Services

Wipro confidential 19

Q&A

Our promiseWith utmost respect to Human Values, we

promise to serve our customers with Integrity,

through Innovative, Value for Money solutions,

by Applying Thought, day after day

Information contained and transmitted by this presentation is proprietary to Wipro Limited and is intended for use only by the individual or entity to which it is addressed, and contains information that is privileged, confidential or exempt from disclosure under applicable law.