With customers today demanding a wide range of service offerings, large vendors such as Wipro have a clear edge here. Besides application development maintenance (28% of Wipro's exports) and R&D (33%), there is infrastructure services, testing, package implementation and a bit of consulting.

Revenues from the acquisitions of New Logic, mPower and cMango started to kick in, as 1.8% was added to the last quarter realizations. All the same, the acquisitions were partly responsible for the 180 basis points decline y-o-y on the margin front for its Global IT division.

Wipro's spend on marketing and sales, and also developing more solutions at the back-end, were low earlier. It stepped up these investments-the number of employees in sales and marketing for instance, went up by 21%.

Salary revisions continued to have a negative impact on the margins, but the company has been able to maintain per person cost y-o-y through changing the mix of employees. A year ago 30% of Wipro Technologies's people were with less than three years experience. Now, there are 42% in that category. The average compensation cost will now therefore be lower. Wipro had effected an onsite salary revision of 3% effective from January 1, 2006 and an offshore increase of 12%, from November 1, 2005, an effort that impacted operating margins by 1.4%.

Pricing moved in a narrow range and the company added 121 customers over the year, the number of million dollar customers going up from 210 to 221. The number of $50 mn run rate customers have also gone up from 2 to 4.

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