IBM India: Calling the Shots



HIGHLIGHTS
High systems growth across PCs, laptops and servers
Big-ticket, long-term services deals including Bharti
Long-term services play: good chunk of revenue from annuity model
Strong Linux portfolio across all platforms
Aggressive pricing of products affecting margins, especially in segments like education, e-gov, and even in some large services deals

Growth for IBM India came in its traditional BFSI, manufacturing, high performance computing and government sectors, but also from a couple of fairly new areas-especially telecom. The big win was a Bharti mega-deal for outsourcing IT assets and management to IBM. Though there were questions on the margins it might have made out of the deal, IBM has had a healthy services business for years in India, with customers including Siemens, ABB, Whirlpool, Tata Steel, Indian Airlines etc. These long-term deals help push product sales. While HP and TCS (after its takeover of CMC) are other big names in IT outsourcing, other major and regional players are sure to provide stiff competition going ahead.

The big thrust of IBM’s marcom messaging was “On Demand”. Virtually every major sale, including products and services, is now listed as an “e-business on demand” win; these included Bajaj Auto, Alstom, the Uttaranchal government, and Bharti. Meanwhile, the PwC acquisition now called its Business Consulting group continues to be aggressive on the ERP implementation side. On the hardware side, Servers sold well across the board, topping the charts in x86 and x86 blade servers (IDC) in 2003 with server consolidation being a key driver at the high end. With one of the most comprehensive Linux offerings across all its platforms, its Linux customers ranged from BSNL and Hindustan Motors to CDAC and IIT-Kharagpur. Its lead in the e-governance area (deals with 10 state governments), often include low-margin and Linux-based system deals.

Abraham Thomas*

Managing Director


Amit Sharma
CFO

Ashish Kumar
Country Manager, IBM Global Services

Swarup Choudhury
V-P & Country Manager, STG

Alok Ohrie
V-P, PCD

R Dhamodaran
Country Executive, Software Group & Developer Relations

Ganesh M
Director, Global SMB

*Shanker Annaswamy took over in July 2004

With unusually low pricing, its commercial desktops sold particularly well (IBM doesn’t sell consumer PCs in India), with a specific focus on tier II cities. ThinkPad notebook sales doubled and the PC division launched low end laser printers, higher-end ‘printing solutions’, and IBM-branded HP-compatible laser printer supplies. Big Blue also hired aggressively for its export services division where it more than doubled its workforce to 8500 people. Finally, this year sees a change at the top: Abraham Thomas’ tenure ended, and he handed over to Shanker Annaswamy in July. Shanker comes from GE-the other end of the corporate culture spectrum-and it will be interesting to watch the changes he brings with him.

l Start-up year: 1992
l Products & services: Sales and marketing of servers,
PCs and software products and services l Employees: 9,000
l Branches: 14 l Address: No. 12 Subramanya Arcade, Bannerghatta Road, Bangalore 560029
l Tel: 22063000 l Website: www.ibm.com/in

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