Exclusive interview: IBM’s Sandip Patel on India’s digital renaissance through AI and hybrid cloud

Sandip Patel, Managing Director for IBM India & South Asia, leads IBM’s sales, marketing, services, and delivery operations across the region, including Bangladesh, Nepal, and Sri Lanka. He also plays a pivotal role in advancing IBM’s global innovation capabilities through its research and technology labs in India.

Since assuming this role in 2020, Sandip has been steering IBM’s transformation journey in India and South Asia with a clear mandate — to establish IBM as the number one company in hybrid cloud, AI, and consulting expertise.

In an exclusive conversation with Dataquest on the sidelines of IBM Think 2025 in Mumbai, Sandip shares how IBM is building a partner-first organisation, deepening its presence beyond large enterprises into mid-market and MSME segments, and helping shape India’s quantum and semiconductor missions. He reflects on how India has emerged as one of the most advanced markets for AI adoption, how IBM’s own use of AI has saved over USD 4.5 billion globally, and why he believes the country is at a “digital renaissance” moment - moving from Naya Bharat to Viksit Bharat. Excerpts.

Let me start with a larger context. Given IBM’s legacy, the technology depth, and the transformation it has undergone over the last decade, how do you reflect on IBM’s journey, particularly with its strategic presence in India?

We are very much on our journey to be a leading hybrid cloud company, which is central to our global strategy. IBM India clearly mirrors that strategy. With the focus that we brought back into the company through the spin-off of Kyndryl, and the renewed focus on our consulting business, we are now continuing to build a robust hybrid cloud platform built to scale with our clients’ ambitions.

In India in particular, the mainframe and server platforms we build still serve a lot of businesses around the world, including India. In fact, a little-known fact, about 95 percent of all banking transactions in India go through IBM servers and middleware. So that legacy continues.

In India, we have clearly pivoted to being a software and services company. Roughly 70 plus percent of our business in India is now software and services, and the software component is growing significantly.

Globally, that is the journey we are on, and that is precisely the path we are following in India. The other pivot we have made is becoming a partner-first organisation. There was a time when IBM did everything on its own. Now we are building a strong ecosystem on both the services and technology space. That has been a meaningful shift, opening the market further and taking our technologies to a much broader base.

We have also become a lot more technical as a company, both in our sales and consulting functions, because ultimately, we are a tech company. I often say that today India is at a digital renaissance, moving from Naya Bharat to Viksit Bharat. Much of this evolution will be defined by what I call the technology trinity: hybrid cloud, AI, and quantum.

Also, the journey under our CEO has brought in strong strategic focus for IBM globally, and we are well positioned as leaders in the spaces we have defined as our key priorities.

Building on that transformation journey, how are CXO priorities changing, and what kind of conversations are you having with your clients?

Today, there is hardly any organisation that talks about doing a business strategy and an IT strategy separately. They talk about doing a business strategy in a digitally connected world. Digital pervasiveness is everywhere. This also means the C-suite, CEOs, CFOs, are all becoming far more tech-savvy, understanding how technology can grow their businesses and make them more efficient.

Let me give you a data point. One of the things that Arvind  (our CEO) drives strongly is how we use technology to transform our own business. In January this year, we announced that by putting AI to use in our own operations, becoming “client zero” for our AI solutions, we had already realised USD 3.5 billion in cost efficiencies. By the end of this year, we are on track to reach USD 4.5 billion, saving an additional billion through continued AI adoption.

Our CHRO leads one of the first areas where we applied AI, HR and actively involved in using AI to modernise about 95 percent of our HR transactions.

Everyone is thinking about digital transformation, whether to optimise and streamline supply chains, drive productivity by automating non-essential tasks, or understand consumer sentiment better through smarter analytics. All of these are now core C-suite priorities.

Another implication of digital pervasiveness is security. As we become more digitally connected as a society, the importance of cybersecurity has moved to the boardroom. With quantum technologies becoming mainstream, bad actors will also exploit them, so we must be ready with quantum-safe cryptography.

In the US, IBM helped author two of the three post-quantum cryptography standards, and recently, our Guardium data security platform was enhanced with quantum-safe encryption, adding another layer of protection for clients.

In organisations where the CEO and the C-suite are not thinking about how technology helps them expand and improve their business, I believe they risk being left behind.

That leads to my next question. How are the narratives changing among IT decision-makers, are you seeing a shift from ambitious projects to more tangible outcomes?

That has always been the question, how are we getting the ROI for every dollar of investment? Has it become more measurable? Definitely yes.

We did an AI adoption survey about a year ago, and interestingly, India emerged among the most advanced markets in terms of AI adoption. Enterprises here are using AI for business in many ways.

Globally, while a large percentage of organisations were experimenting with AI, only about 30 percent were actually scaling it. And one of the biggest barriers was identifying the right use cases that deliver ROI.

So ROI has always been a focus, but it is now becoming far more measurable, sustainable, and tied to resilience. There are hard metrics, but also softer ones, such as whether it is creating a more resilient architecture that sustains over time, and whether it allows us to scale locally and globally. These are some of the key questions that we, and our clients, are actively working to solve.

Innovation clearly plays a central role in that transformation journey. Can you give us a peek into your labs and how you are priming them to address disruption?

Our labs continue to innovate with a clear outlook on where technology is headed. We have an internal process called the Global Technology Outlook, published by our labs leadership every year. So our labs do not merely react to global trends, they help us anticipate what is coming next. That forward-thinking mindset has always been part of our DNA.

In India, we operate as a microcosm of the IBM Corporation. We have vibrant Software Labs, Research Labs, Systems Labs, and a Global Delivery Centre, all continuing to grow. In fact, we will soon be opening our seventh Software Lab in Lucknow.

These labs innovate in India, for India, and for the world. It is a legacy we are proud of, setting the pace for technological innovation, not just responding to it.

Extending that thought on innovation and local capability building, how are you deepening your cadence beyond large enterprises and tapping into mid-market and MSME opportunities in Tier 2 and Tier 3 cities?

We are not just a large enterprise player, we are an enterprise IT organisation that works with businesses of all sizes. One of the major pivots under our global leadership has been our twin focus on hybrid cloud and AI, along with a shift to a partner-first organisation. We have built a robust partner ecosystem, which helps us reach a broader market together with our partners.

In India, we have deliberately expanded into Tier 2 and Tier 3 cities to build out labs and delivery organisations, but always with purpose. When we set up a lab in Gandhinagar, it was because key business partners were already there, and we were collaborating with IIT Gandhinagar on research and skilling. Similarly, our Kochi lab works closely with local universities and colleges to drive R&D and talent development.

Now, as we build in Lucknow, we are taking the same approach, creating ecosystems and deepening our reach into the MSME space through business partners. It is not about expanding for expansion’s sake but going where we see growth and where we can build sustainable, partner-led ecosystems.

Finally, what would be your three big priorities for 2026 as a leader for IBM in India?

Our first priority remains hybrid cloud. The second is helping clients and governments scale AI and automation in a big way. The third is our deep engagement with the Government of India on critical national missions such as the semiconductor and quantum missions. When these missions were launched, IBM was invited to help shape them, given our leadership in those technologies globally. We continue to work closely with the government to accelerate progress and outcomes.

To sum up, our priorities are clear, driving hybrid cloud adoption, scaling AI and automation for impact, and accelerating India’s semiconductor and quantum missions. If we can make meaningful progress on these fronts, I think we will have achieved something truly impactful in 2026.