Why IBM's Sam keep coming to INDIA

Two years ago, May 2004, Recruitment dates were freezed by companies in college. I was nervous, preparing for Campus like my peers. I happened to go through Latest(By then) edition of BW(BusinessWorld). Cover story was weaved around What is happening @ Big Blue in India, and Its plan to become biggest IT player in INDIA. I was mesmerised, Story was pictured as .......

" Extraordinary things have been happening at IBM India in the past 36 months, but not too many people picked up the cues initially. The 100% Indian subsidiary of the world's largest IT firm had been so slothful ever since it re-entered the country in 1992 that few noticed any difference when it finally woke up. You couldn't blame industry analysts for missing the signs - after all, the firm had done nothing spectacular for years. It had crawled up to sales of just $300 million by 2000. It had set an ambitious target of $1 billion by 2002, but didn't even seem close to it.

That's why when Samuel Palmisano, chairman & CEO of the world's largest IT firm, was in Delhi in May last year and made a point of calling on Bharti group chairman Sunil Mittal, the meeting was passed off as just another courtesy call. After all, during his two-day visit, he also met IT minister Arun Shourie, Karnataka chief minister S.M. Krishna, government officials, and IBM India's customers. Outsiders couldn't catch the real import of such a high-profile visit.

Sam Palmisano is no ordinary CEO. As the head of the $89-billion IBM, he has 165 countries to cater to. That's why the fact that he was visiting India just over a year after taking charge from Lou Gerstner should have alerted industry watchers in the country. That Palmisano was the only IBM CEO to have ever come to India was also ignored by IT watchers here and abroad.

Nobody picked up the next five clues either. Palmisano was followed by Steve Mills, senior vice-president(software group); Nick Donofrio, senior vice-president (technology and manufacturing); Frank Kern, general manager (Asia Pacific), who oversees 19 of the 165 countries on the IBM map; Satish Khatu, general manager (Asean and South Asia); and Paul Horn, senior vice-president (research). This was an unprecedented number of high-profile guests for IBM India - all in a space of 10 months.

To outsiders, they seemed to be preoccupied with the India team, government officials and customers. But inside its headquarters on Bangalore's Airport Road, IBM India managing director Abraham Thomas was overseeing a quiet transformation. And doing things extraordinary. In March-April, when Big Blue came out with two big bang announcements in quick succession, the industry couldn't ignore it any more.

At Delhi's Taj Mahal Hotel, IBM's Tim Shaughnessy and Coleen Arnold, and Bharti chairman Sunil Mittal announced that over the next 10 years Bharti Tele-Ventures would outsource all its IT requirements to IBM for $750 million. With that, IBM raised the curtains on its biggest deal ever in India. We'll come to how that deal (termed Project Taj) was struck later in the story. But within a month of the Bharti deal, IBM India sprang another surprise. It announced the buyout of the four-year old email and voice specialist call centre Daksh eServices for $160 million. "

Certainly you would like to read this story from May 10, 2004 BusinessWorld edition.

After being impressed with it, I commited a sin, sin of thinking to get into IBM in the Campus Recruitment. Becoming an IBMer was certainly a sin at that time, because IBM used to pick 4-5 students from our college those days, but still I commited.

July 19, 2004 IBM recruited 42 candidates from our college, registering itself as one of the top recruiters on the charts that year. Many dreams came true that day, one was mine too :-)

From that day onwards I have observed IBM's India operations growing exponentialy.

Now June, 2006 we are 43000 strong IBMers in india, scaling up from a few thousands two years ago. Reaching the size of mammoth domestic players like Infosys, Wipro, TCS and others, while far ahead from its worldwide competitors EDS, Accenture.

Again India is in the center of IBM's future expansion strategies.

For the first time ever on June 6, 2006 IBM convened its annual investor meeting outside of the United States, bringing together more than 50 institutional investors and industry analysts in Bangalore, India.
IBM celebrated India
IBM CEO Sam Palmisano announced to the world,
"For all my colleagues listening to this broadcast today around the world, I want you to understand the incredible capability we've established in India," said Sam. "It's also true in China, and it's also true in Eastern Europe, and it's also true in Brazil. If you take those regions of the world in the past couple of years we've added about 75,000 people, with phenomenal skills and capabilities. And very simply I want all of IBM to understand it and take advantage of it."

India is the second-fastest growing economy and the fourth largest based on purchasing power parity. IBM India has the second largest employee population outside of the United States; and the fastest-growing software and services provider in India.

From above disussion and My earlier post on IBM, I am trying two focus on two points:

1. Industry sources estimate, to keep pace with its growth and compete with other IT players, IBM needs to slash its jobs overseas, and a major portion of the pie is expected to come to India.

2. IBM has invested $2 billion in India so far......... and CEO Sam Palmisano announced, "We are more than forty-thousand strong in India, and our investment in this strategic country will continue to grow from $2 billion over the last three years to nearly $6 billion in the next three years."

Sam last visited india in 2004, and eventually two big announcements were released from its Camp, $750 million Bharati deal and acquisition of Dakh, which gave IBM a long anticipated breakthrough in India.

If we go by the investment, and apply simple Mathematics, then IBM is to triple its strength in India. This would result into a headcount of more than 1,25,000 IBMers in India.

To grow with such plans IBM needs make some significant acquisitions in india, if speculations to believe certainly acquisitions of one of the Top Five Indian IT players like Infosys, TCS, Wipro, Satyam........
Yes, I agree with you, It seems a very tough task to woo these players.
But I dont deny any possibilities, Its business.
I am excited and optimistic.
Keep your fingers crossed, wait till mystery gets unfolded.
Share your opinion.......