As a part of its 2015 Roadmap, India is going to be one of the crucial geographies for IBM, both as a delivery centre and as part of emerging market focus. IBM has six delivery centres in India.
It does not give a headcount, but third-party reports suggest its India unit has close to 100,000 employees and the India revenue is around $3 billion (Rs 1,509 crore).
Growth markets, Analytics, Next Generation Data Centre and Cloud & Smarter Planet are the four focus areas of its road map. A crucial aspect of this growth is how it deploys people and processes in an integrated manner to capture new opportunities.
The services unit will be key. Within the services unit, it will be the Global Business Services (GBS) unit which will be the core. For 2010-11, IBM reported revenue of $19.3 billion for its GBS unit; it was $4.9 billion for the quarter ended December 31, 2011. The GBS unit works closely with global delivery centres across the globe.
“IBMs global delivery strategy has gone through phases of growth. After the initial focus on centres in India, China and Latin America, the most recent initiative has been to create globally integrated capabilities, along with integrated industry and domain capability, with globally deployed assets and talents,” said Suhas Bhide, general manager - global delivery, India.
IBM set up its growth market units as early as 2009. “Before this, we had geography-based divisions. We realised that within these regions, there will be slices growing faster than the rest and with unique constraints. Hence, we picked certain growth markets from regions that then become part of our emerging markets focus,” he added. The markets of India, China, Latin America, West Asia and Africa represent the growth market unit.
With a prominent presence in some of these emerging market, it now intends to reap the early mover advantage in some. “We have invested so far $6 billion (Rs 30,000 crore) in India as a growth market. If you look at IBM India, it is a microcosm of IBM global, which is one-of-its kind,” said Bhide.
Some early successes in India include the IBM-Bharti Airtel deal, replicated in other emerging regions. Some entities that work with IBM include Idea and Vodafone in telecommunications; State Bank of India, Canara Bank and HDFC Bank in banking and financial services;, Amul, Tata Sky, Indian Railways and the income tax department.
“When you are working in some of the emerging market geographies like India, you realise there is no labour arbitrage. More, all these firms are competing globally and, hence, need global benchmarks in service delivery as well,” said Bhide.
For the year 2011, growth markets are 22 per cent of IBM’s revenue. The growth markets’ revenue grew 16 per cent year-on-year and the BRIC countries (Brazil, Russia, India, China) reported growth of 19 per cent.