India: A Crucial Cog for I.B.M.

Posted on June 5, 2006  /  2 Comments

India Becoming a Crucial Cog in the Machine at I.B.M.

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By Saritha Rai, New York Times, June 5, 2006
BANGALORE, India, June 4 — The world’s biggest computer services company could not have chosen a more appropriate setting to lay out its strategy for staying on top.
On Tuesday, on the expansive grounds of the Bangalore Palace, a colonial-era mansion once inhabited by a maharajah, the chairman and chief executive of I.B.M., Samuel J. Palmisano, will address 10,000 Indian employees. He will share the stage with A. P. J. Abdul Kalam, India’s president, and Sunil Mittal, chairman of the country’s largest cellular services provider, Bharti Tele-Ventures. An additional 6,500 employees will look in on the town hall-style meeting by satellite from other Indian cities.

On the same day, Mr. Palmisano and other top executives will meet here with investment analysts and local customers to showcase I.B.M.’s global integration capabilities in a briefing customarily held in New York. During the week, the company will lead the 50 analysts on a tour of its Indian operations.

The meetings are more than an exercise in public and investor relations. They are an acknowledgment of India’s critical role in I.B.M.’s strategy, providing it with its fastest-growing market and a crucial base for delivering services to much of the world.

“A significant part of any large project that we do worldwide is today being delivered out of here,” said Shanker Annaswamy, I.B.M.’s managing director for India, who presides over what is now the company’s second-largest worldwide operation. In the last few years, even as the company has laid off thousands of workers in the United States and Europe, the growth in I.B.M.’s work force in India has been remarkable. From 9,000 employees in early 2004, the number has grown to 43,000 (out of 329,000 worldwide), making I.B.M. the country’s largest multinational employer.


  1. There are two significant points that stand out for me in this article:

    1. India has moved up the value-chain. It isn’t only a hub for low-cost, low-end services like call centers but is now playing a siginificant role in developing new products and services for the global market. It is significant that IBM has set-up its Global Business Solutions Center in India, which it labels the “future of consulting services” and expects to invest $200 million annually in this center.

    2. At LIRNEasia we are interested in studying effective virtual organizations and new models of collaborations across countries. IBM seems to be an excellent example of a company that has so seamlessly integrated its operations around its offices worldwide that it is able to provide integrated solutions to a client from different locations.

  2. IBM plans to invest $6bn in India
    June 06, 2006 11:46 IST

    IBM said on Tuesday it plans to nearly triple its investments in India over the next three years to $6 billion.

    “In the next three years, we will triple our investments in India from $2 billion over the last three years to nearly $6 billion,” IBM Chairman and CEO Samuel J Palmisano said in Bangalore.

    “That investment will ensure that we make the most of the opportunities to grow this market place, while it also enables IBM to fulfil its vision to become a globally integrated company”, Palmisano said.

    Palmisano spoke before 10,000 employees gathered in Bangalore and via satellite to thousands of other employes in Delhi, Mumbai, Kolkata and Pune.

    With 43,000 employees in 14 cities across the world, India is one of IBM’s important centres outside the US.