Wipro’s Green Gamble

40 years after he took over his family’s vegetable oil company and turned it into a $5 billion company selling IT services, computers, consumer care, lighting and medical equipments, Azim Premji is on the lookout for his next billions.  He sees them coming from renewable sources of energy.  Water and Eco-energy are the two areas of focus for Wipro and that is where they believe the next billions will come for the company.

For those who know Premji, it is not uncommon to see the fifth richest Indian on the Forbes List and the 63-year-old chairman of Wipro switching off the lights before leaving office. It is this commitment to avoid waste that has turned Premji’s attention to ecology and sustainability.

In October 2008, even as it warned of slowing growth in its main software outsourcing business in the backdrop of a global financial crisis, Wipro released a recruitment ad for two new businesses, Wipro Water and Wipro EcoEnergy. The company has spent the previous two years preparing for this diversification, which may turn out to be the company’s third big change. The first was when a 21-year-old Premji took charge at Wipro after his father’s sudden death; the next was when the vanaspati and soap maker transformed itself into a multi-billion dollar information technology giant in the 80s and 90s.

Chief Financial Officer Suresh Senapathy says green services and solutions will bring in up to one out of every four dollars of the company’s revenue, three years from now. In the financial year ending March 2009, Wipro had revenue of more than Rs. 25,000 crore. Even if the revenue were to stagnate, a fourth of it — Rs. 6,250 crore — from ecology is no small amount. The plan also aligns well with Premji’s desire to ease down IT’s profit contribution from 93 percent currently to 70 percent in the next few years.

The new idea was first thought up by the 41-year-old head of Wipro Infrastructure Engineering (WIN), Anurag Behar. The two new ecology businesses will be housed under WIN. In January 2007, Behar made the first formal presentation about the ecology business to Wipro’s board of directors. The board reacted positively but also advised caution: Ecology was a nascent field with rapidly evolving technology and Wipro should not get locked in a technology that ran the risk of becoming obsolete soon.

Wipro has turned its 50-acre campus at Electronic City in Bangalore into a test bed. While 25,000 software engineers write code for Fortune 500 corporations, waste food from the cafeteria turns into methane for lighting burners, harvested rainwater is used to cool air-conditioning towers, a paper pulping plant recycles waste paper into writing pads and a micro windmill lights bulbs along the perimeter of the campus. Wipro’s Sarjapur campus a few kilometres away has India’s largest LED installations — all compact fluorescent lamps have been replaced with LED lights, helping save 75 percent in electricity consumption. Since 2003, Wipro has cut water usage in its offices across India by nearly two-thirds.

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