In 1966, Azim Premji was finishing his undergraduate degree at Stanford when his father died. Mid-quarter, the engineering student left Palo Alto, rushed to India, and at the age of 21, took over the family’s vegetable oil company, which was called Western India Products Limited. Today, with its abbreviated name, Wipro is a technology services powerhouse with a market cap of $22 billion, employing 130,000 and operating in more than 50 countries. Last year, the Bangalore-based company’s net income was $1.10 billion. Ninety-five percent of its operating income came from its information technology business. Along the way Premji earned the nickname "the Bill Gates of India."
So how did Wipro go from vegetable oil to information technology? Well, it’s not as circuitous a journey as you might think, and while the word "pivot" is a decidedly American concoction, and most of the companies we’ve covered in this series have also been American, Wipro shows that any company, anywhere, can have what it takes to suddenly change course on its way to greater riches. After all, Nokia once made rubber boots and Nintendo sold playing cards. And Wipro? It peddled vegetable "ghee" under the brand names Kisan, Sunflower, and Camel.
When Azim Premji returned to India in 1966, the former engineering student had been fully indoctrinated into the computing culture that was then gestating in what would become Silicon Valley. But his tech background was largely put to the side as he repositioned his father’s company from a vegetable oil maker to a consumer goods concern that produced oil, hydraulic fuel, soap, tin containers, and wax. Within a decade the company was worth a modest $2 million. Then in 1977, IBM, which had a monopoly on computers in India, packed its bags after refusing to comply with India’s socialist government demand that foreign companies give up 60 percent of their shares to an Indian company. These policies also led Coca-Cola and others to withdraw from India, as they too faced dilution, as well as government orders to reveal its secret recipe.
When Big Blue and its global corporate ilk departed, Premji saw opportunity and after a few years of research and development Wipro produced India’s first homegrown microcomputer in 1981. It was a success, and more followed. As the company moved into software then desktops, laptops, data centers, and built the country’s first supercomputer, its revenues flourished.
Already the master of the pivot, Premji pirouetted again in the 1990s, when the Indian government reopened to foreign companies and investment. He created an R&D lab at Wipro, and offered the lab’s services for hire. Western companies gladly made use of the lower costs in India, and Wipro made a juicy cut. In the late 1990s, and early 2000s, Premji was one of a handful of industrialists to thoughtfully and cleverly tap into the globalizing economy by offering a full suite of outsourcing services. Today, Wipro works with hundreds of multinational corporations, performing a wide variety of tasks like managing payroll, running call centers, and developing custom software products.
Perhaps what makes Wipro unique is that with each pivot, Premji retains bits and pieces of the old company. Wipro’s logo is a sunflower, paying homage to its humble origins. To this day, Wipro manufacturers vegetable oil and soap and Premji claims the consumer business is profitable—and a good way to train and groom young talent in marketing, finance, and logistics for other parts of the company. More recently, Wipro created a clean tech arm that supervises eco-friendly construction projects and helps companies reduce their carbon footprint. Annually, Wipro has been growing at the rate of about 20 percent.
Premji, too, has profited greatly from his pivots. Forbes estimates the 67-year-old entrepreneur’s personal wealth at almost $16 billion and places him 41st (#3 in India) on its World Billionaires List. All this has allowed Premji to focus his efforts and talents elsewhere. Like Bill Gates, he now spends considerable amounts of time on social issues—improving primary education is his main passion. And he's pledged at least $2 billion to philanthropic efforts in India.
Unlike Gates, however, Premji finally did get his college degree. In 1996, 30 years after the fateful day he left Palo Alto, he finished his final courses via correspondence study, and displays his diploma in his Bangalore office.
[Image: Seema KK]