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