The Indian services arm of IBM Corp., which contributed almost $1 billion (around Rs 4,200 crore) in company revenues during 2007, is gearing up to aggressively grow the business as it takes on competition from domestic rivals such as Tata Consultancy Services Ltd.
IBMâ€™s aggressive targets here are significant not just because India is turning out to be the fastest expanding business for IBM globally and already plays a significant role in its global services strategy but, it comes as other top local tech firms such as TCS and Infosys Technologies Ltd are beginning to go after similar business within India.
Demand for information technology, or IT, services in India is expanding at 30-32 percent annually, the fastest expansion of such a market anywhere in the world, from about $5 billion, according to market research firm Datamonitor India. Tech researcher Gartner Inc.â€™s local office estimates the market at Rs 19,562 crore. Industry insiders estimate IBM has about half of outsourced contracts in India.
â€œRight now, India contributes 3 percent of our total revenues and thatâ€™s purely from Finnacle (Infosysâ€™ banking software product) and what we consider as significant contribution is when we cross the 5 percent mark. We are hoping that India at some point will be more than 5 percent,â€ he said. Analysts note that IBM has been focusing on the domestic deals for nearly 10 years. That coupled with their strategy of helping Indian businesses transform themselves by leveraging IT, has helped IBM build a strong domestic base.
Bharti Airtel Ltd, Idea Cellular Ltd, Vodafone Essar Ltd, the governmentâ€™s Central Bureau of Direct Taxes, the Delhi International Airport Ltd and real estate giant DLF Ltd are among IBMâ€™s key customers in India. â€œIBM has always seen IT services as part of the bigger business issue which is business transformation. This is their strength and so, their selling pitch and IT penetration is at a different level,â€ said Alok Shende, practice head at market research firm Datamonitor India