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Complete Solutions

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DQI Bureau
New Update

Given the slowdown, how do you differentiate IBM from the competition?

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Services. To be a leader in the India IT domestic market we are aggressively

driving our services business and use the services edge to differentiate with

other players. While globally services have overtaken products as the largest

revenue stream, in India, services when compared to products is not a big

business for IBM today. We feel like the global trend customers in India are no

longer looking for piece-part solutions, but at companies which can put

everything together and give them a total solution. Something that IBM is

capable of delivering. In services we are looking at strategic outsourcing,

business innovation services, package implementation and integration technology

services (including maintenance and network). Given our global competencies in

hardware, software, services and integration, we will leverage the same to

augment our business model. Though changes in mix are difficult given IBM’s

size, we have exhibited a trend over the past few years toward a more

services-oriented mix and will replicate the same in India. This long-term

strategy will equip us with the ability to weather downturns in an incredibly

volatile and often unpredictable industry.

Key outsourcing accounts

"I think that the open source Linux represents a great opportunity for countries like India, which have significant development strengths"

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We already have bagged a few outsourcing contracts with companies like Tata

Steel, Siemens, Ballarpur Industries and Whirlpool. We are also talking to six

other big companies and negotiations are in various stages.

Other growth areas

Apart from services, we are focussing on software and storage and servers. I

think these areas are least susceptible to commoditization. While desktops still

account for a considerable portion of IBM India’s turnover, the thrust areas

are software, servers and storage.

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With software being one of the growth engines, We are working with various

software providers. Also we are betting high on storage solutions as we think

that a lot of companies are spend more of their IT dollars in this space. From

companies building Storage Area Networks (SAN) to Internet Data Centers offering

data outsourcing, the demand for storage in the region is growing fast. Finally

is the third area of servers. In servers, we are better positioned. The decision

to make low-end servers at our Pondicherry plant has given a significant cost

advantage. Also given our focused e-server strategy, we think that we can grow

significantly in the same segment.

Focus on the desktop segment–home and corporate

The corporate space continues to provide us with a large opportunity and we

will continue to expand in the space. Our desktops have achieved fare success

growing at much higher pace than market and gained on market share. However we

realize that the key drivers in the Indian desktop space are the SME and the

home segment and have introduce the NetVista i range of Home PCs during the end

of Q2 2001. We have achieved a fare amount of success in the short time frame

and I think the expansion in other cities, IBM will grow significantly in this

market.

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Key verticals

We are betting on the SME’s, telecom, finance & banking, Government and

manufacturing as the potential revenue generation markets for our business.

The Linux strategy for India

We are looking at Linux to drive the server market in the future. We have

enabled all our eServer hardware to run Linux. Also our most popular software

such as DB2, Websphere, MQSeries, Lotus Domino, etc. have been enabled with

Linux compatible versions. I think that the open source Linux represents a great

opportunity for countries like India, which have significant development

strengths. Globally we have announced investments of over a $1 billion in Linux

development and promotion and have earmarked about US$ 100 Million for India. In

India we have established the Linux Development Center in Bangalore, among the

only seven such IBM facilities worldwide, to support business partners and

independent services vendors across the ASEAN / South Asia region.

Yograj Varma in New Delhi

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