It took a long time and much speculation. But when it arrived, IBM’s software and
services business quickly registered an impressive Rs 70 crore in the first six months of
its existence. Starting September 1997, IBM Global Services (GS) is focusing on software
development for exports, solutions development for domestic industry, services for
domestic enterprises, heterogeneous systems management, and training-all of which was
hitherto a part of erstwhile Tata Information Systems Ltd. Unlike its hardware cousin, IBM
GS has a majority equity (80 percent) of IBM and the balance from Tatas, but like Tata-IBM
Ltd, the entire product portfolio, the methodology, the manpower is entirely IBM.
The main strategy of the company is said to be two-fold: to provide a whole host
of end-to-end services for the Indian market; and to aid in improving IBM’s services in
the world marketplace. In the domestic market, IBM GS is focusing on a wide gamut of
services ranging from network and integration and network services, where the company
plans to offer the world’s largest network in terms of access points (1,800 worldwide) to
Indian businesses. In fact, the company plans to make the IBM network ‘one local call
away’ so that access becomes easier for the Indian customer.
The second area of expertise that IBM GS will offer is consulting. While the consulting
business in India is still in a nascent stage, IBM will focus on areas such as BPR, ERP,
manufacturing companies, and banking companies. Here, IBM will be competing with some of
the Big six and other local consulting companies such as TCS, AF Ferguson etc. In the area
of ERP, IBM GS has tie-ups with SAP, BaaN etc.
Simultaneously, given the breadth of experience available with IBM worldwide, IBM GS
will also enter into Systems Integration (SI) businesses where the basic approach will be
to provide business solutions using IT as the key enabler. According to IBM, the company
has a track record of managing complex projects in the areas of
integrating hardware and software with key business needs of the organizations.
The advantages that IBM brings to the table will be a mature methodology and a
formidable experience base. However, one issue that the company will have to contend with
is the image of ‘an expensive company’. IBM says that the Indian customers will find IBM
GS ‘good, but expensive’, as expectations from IBM are also high. In any event, the
company’s focus will initially be on the top 200 corporates in India.
As far as software development is concerned, IBM GS will be focusing on Y2K, Java
development, OS/2 support, TCP/IP, design services for IBM etc. Eighty percent of its
software export business will be with IBM worldwide-which will give the company the
necessary critical mass that it will need to grow.