India's No.3 software services exporter Wipro Ltd said on Tuesday it aimed to tie up with Japanese firms and may consider M&A, highlighting Indian software firms' growing desire to get into the Japanese market.
We have been very successful at doing acquisitions in the last two years. So we are still open to a similar one in Japan, provided that it will fit our strategic interests, Wipro's chief operating officer A.L. Rao told a news conference.
Wipro said it planned to announce an alliance in Japan next month but declined to give further details.
Japan's software service industry is dominated by firms such as NTT Data Corp and NEC Corp, which have strong ties with the country's banks, the postal system and manufacturers. Foreign firms have found it difficult to win major orders here.
Last week, Wipro rival Infosys Technologies Ltd formed a strategic alliance with Japan's Nihon Unisys Ltd to develop and market new products together.
Wipro itself has been operating in Japan since 1998. It said it expects its revenue from Japan to be around 10 billion yen ($92.6 million) in the year ending in March, accounting for about 3.5 percent of its total annual revenue.
It bought a wireless design unit of Oki Electric Industry Co Ltd in November.
Hiroshi Alley, head of Wipro's Japan and China operations, said the company also planned to form alliances with Japanese firms for government projects.
If you look at any of the projects in Japan today, (such as) the government postal project, you'll find that the Japanese competitors themselves -- NEC, NTT Data -- will join forces to pull together to complete a project, Alley said.
This is a very key element in dealing with government projects, where we'll never be able to even put our bid in, being an Indian company.
(Editing by Hugh Lawson)