1. Glosing Gase
Fifteen years ago, Wipro Ltd. of India was a jumbled conglomerate selling everything from cooking oil
"f-and
personal care products to knockoffs ofDell microcomputers and lightbulbs. Now it is a fast-growing
information technology company at the forefront oflndia's rapidly expanding technology sector. In the
year ending March 2005, Wipro generated more than $1.87 billion in sales, the majority from export
contracts in information technology services. Its sales have grown by more tian 25 percent a year since
1997, and that gror,th shows no sign of slowing. The company is very profitable, eaming $363 million
in net income in the year ending March 2005.
Wipro's move int6 technology began in 1989 when General Electric entered into ajoint venture with
Wipro, Wipro GE Medical Systems, to make and sell GE ultrasound scanners under license in India. At
the time, Wipro's technology revenues were tiny, just $15 million. While sales of GE scanners in India
did not take off as quickly as expected, GE quickly realized it had found a cheap source of talented
engineers and programmers. India has a solid base oftechnology-focused universities and colleges that
tum out many engineers every year. The vast majority speak English. While software programmers in
the United States with two to four years ofexperience make $64,000 a year, similarly skilled individuals
in India can be had for as little as $2 an hour, and programmers at Wipro on average eam $10,000 a year.

2. where the annuar per capita income
fl::'T.Hi ;,"J;t"jJ:f ;i:: llH..dia' is stin ress than g500,
. GE quickly set aside $5 million alear ro hire Wipro softwz
ultrasound machines and ts cr *"grammers to write code for e[.'5
olher uiits ro rotto* tt. m"oical
r""";"; ;;;;;fi-;d::."t" GE managers began to encourage
division.s lead and oulsourceenior
companies. As a resutr. at one point technology work to Indian
duri"g ,t . ,iJ-i990r;;o;: lnto*unon
revenues from cenerat Erecrric.
H*."; ;;;;;;;;;; ;iil;;fi fffl'tr,"il:::ff:#Tl
contracring out work ro other tnOian
;;;il;::
lnformaiio-n :l.,i
!umpanies. praying them oflasains,
other in itidrjve for.u.r lo*., .o.t..
;;r;;';;ilu
T" dd
itsownoperaringem"i"n"v.'sowip,or""k;;;;;;";:;ffi:ii,ii.#lill,llTfl
each
wirh GE hetped in rhis reoarj.5ins.
i, g"r. wipr"'Jiiff;;;r" ffi,,:T,r"n;f*:
cE.s retenlless
efficiencies Thus. rotowiis ce
t
reaa.-wiiro
sigma process for improvinl operaring
purtr io, op"ruring
ri; il;;il firsr,ndian companies ro adopirhe
six
rJ. rurnou, uy cr. Today. Mpro execuives credit
much of their success in rhelntemalio"a
"m.i.n.y
vendor. rn*t.i," ii. i,ara,i"* it leamed about
trcr Lo tne nard lessons
efficiency as a GE
,"-:y:rs anendon from simpty buying
software from rndia, ro using
"Jt#lnf:!|;li,o::il
beperiormed
rhe
"".";;;;;Jll;""";,.il13ff:l::fl.fi^?:l[fr,:h#,:lr,.J..r,TT*:.I,Jl,#*i
and Brirish Airways began doing.rhe_su-"
year by shifting such work to
rr,'ing.'ii.oi;il;u. ir cut operating cosrs
r;iu. wipro ;;;;ffi,#;; $300 mirion a
Today wipro's l9'000 technorogy .rpr"y*.
semiconductors' debug apprications..rake
o.ders, "riti.**"r.".'t"*o*" back-oflice sorutions. design
*J n"la'rr"ip *,,, for some of rhe biggesr companies
rn rhe worrd' Its cuslomers srilr
Nokia' Sony' and weverhaeuser ey
c"*tirtr""i.
incrude
Hewren_packarr] Hor. 6"po,.
,.ing ti.'rnr'.,.n;t: "i"l*'*,* mainhin
;"tor*" .""
applicarions for comDanies alt.over and manage softi.Jare
weyerhaeuser' on" offtr worrd's
rhe;;;; ;;'iJ.,t;I'"rror"r, is wipro,s retatiJnship
rargest tlt"u". wirh
began in r 999 when rwo emnloyees-
conduc,"a , ".ro*;...'ivifro . inuolu",nent with weyerhaeuser
*rl,te analysis ar weyerhaeuser,s u.s.
l}"[11fi'i:i:ff111,:1,l:llii :l zool. wrp. "iJ"t, #'ilH,* a,broad array orweyerhaeuser.s
o".,,rr. wipi"'*#ffi :Xf:,* : ;* n"'
appr:catio"' e-J"l;,i. i")i,.
#*liffi ;To#;e
:J::[;,I.',:':i#rcompetitivegrobar"";;r 'h"'l;#,i":;:i::;lh':,'*iT'ffi:i:ffi.',:'.1
Wipro. however, is not lonter
n.,.u,ngy,;o;;;ffi ;:':?i:T:,1i:l,gh:;:ffi iT,l*iHl:"#ffi
a dear to design and engineer :,ffi.;.lff;IlilJ
tape storage devices ro. siorug"
i."t norogy. ln 2004. ,"pro took -over
responsibiriry lor a, deveropmeni
*o* o"n tr,ir proor., ,,""'0"",
,"0 .rproyees in Minneaporis. wioro
rs arso moving rapidrv inro
hish uatue-aooea soh*;';;;;d';"1r ,s estabrishing grobar suppry chain
il,?l15l.il,,f n::."::.lf m;;;il;;#;.;.J,:X:,,dominareduy_w".,"_;;".Jr,;B
As Wipro expands its business. il
is also taking steps to become
wortd. wipro has been hiring ro.ur.,urionur.
io j"?;i:;*;il:;#".#i;,Xm:f,:::iiri::
presence in 35 counrries.
mosr of which are s,rfd;; j;;;;,];,i"i,i'll?"i"l1yfiasa direcr sar,
three-quaners or rr," .rpiof..s
,r,n,..ur,o,"l,r-.."",";";";:;1,;;l:;t,::,,n""rffJliJ?,?:1lll
already 90 percent' According
to a wipro rpor.".*rn. urin!'roluil..prouio". rhe currurar and Iirigui,ric

3. ties that make clients smile, and help us build sftonger relationships." Wipro is also buying Iocal companies
to give it instant industry presence. In November 2002, Wipro paid $26 million forAmerican Management
Systems, buying not just credibility but also 90 consultants and 50 existing client relationships in the
cnergy business. While these consultants will manage contact with U.S. customers, much ofthe software
rlevelopment work will be moved to Bangalore.
ln something ofa departure from its historic strategy, since 2000 Wipro has also been moving some
ploduct development work out of India to developed nations. It now has nine development centers in
liurope and the United States. These centers focus on product development work where more
conrmunication between Wipro engineers and the client is required than with the typical outsourcing
contract, ard where language is an issue. In Germany, for example, Wipro has found that it can win
tttole bdsiness ifnot only its salespeople are Gennan, but also some development work is done locally
by German engineers.
g::].

4. Dlscussion 0uestion
[{ow did outsourcing work to Wipro improve General Electric's ability to compete in the global
economy? Does such outsourcing harm or benefit the American economy?
General Electric help to create Wipro? How?
India's information technology companies continue to prosper, over time what do you think
ll happen to the income differential between software programmers in the United States and
What are the implications for the American economy?
2000, Wipro has moved abroad, establishing sales ofiices in 35 nations and design centers
ne. Why is Wipro doing this? What would happen to the company if it did not follow this
does the rise of Wipro teach you about the nature ofthe global economy in the first decade
2 lst century?