‘We have made significant investments in hybrid cloud which is the future’

In a rapidly-changing technology landscape, few stand the test of time like the 110-year-old International Business Machines (IBM), which has managed to successfully surf the quick sands of technology.

As companies undergo digital transformations, they will opt for hybrid clouds. In India, Sandip Patel, Managing Director, IBM India & South Asia, is leading the charge as the company helps customers shift their mission critical work to the hybrid cloud. In an interview with BusinessLine , he spoke of the opportunities and challenges in the marketplace. Excerpts:

IBM, over the last couple of decades, has slimmed down by spinning off or selling various parts of the business, including networking, personal computers and printers, and now you have spun-off your managed infra business as Kyndryl. What is the thought process here?

Evolution for IBM is not new and this is not the first in our history. Each time we made these moves, it is to where the market was moving.

We are changing to bring hybrid cloud and AI technologies. While we are very much a global company, IBM India is a microcosm of what IBM is globally. We have shifted our portfolio to drive sustainable revenue growth to higher value business. Post-Kyndryl, 70 per cent of our revenue comes from software and consulting, both higher value business, which saw significant acceleration. Two-thirds of our software business is on a recurring revenue basis.

With Red Hat acquisition (in 2019), we see a $1-trillion hybrid cloud opportunity. This allows us to do what we do best — build platforms.

A quarter of our global revenues in the third quarter came from consulting. The company’s hybrid cloud revenues are about $27.78 billion (over last 12 months). In this process, we have made acquisitions — 17 last year alone — which have been accretive to our overall strategy of driving growth. While doing this, we have increased our focus and agility to serve clients better.

How will the Kyndryl spin-off affect IBM India’s operations, as a significant number of the new company’s employees are in India?

We will both be each other’s biggest client and strategic partners. Kyndryl will continue to offer IBM’s hardware and software, among others, similar to how IBM will have other partners to work with. The whole premise of the spin-off was to ensure greater focus on specific areas. For instance, IBM and Kyndryl are jointly working with Bengaluru International Aiport as a part of a 10-year contract to provide best of breed IT solutions to create a new concept of an ‘airport in a box platform’, which will transform end-to-end travel experiences at BIAL. So, we will continue to work closely with each other.

As a market and resource base for global operations, how has IBM India fared?

Today, 12 out of 13 public sector banks are running their mission critical workloads on IBM Power Systems. After the amalgamation of 10 PSBs into four megabanks – three of the resultant entities run their core banking systems and all four banks run their mission critical workloads on IBM Power Systems.

For instance, the YONO (super app) of State Bank of India has been built and powered by IBM.

Similarly, when IOCL delivers gas cylinder or Amul delivers milk, which they did even during the peak of the pandemic without missing a beat, I am proud of the work (we have done with them). We work with several marquee customers, including Parle, BIAL, Puravankara, IOCL, Vodafone Idea, Bharti Airtel, Emerald Jeweller, Shree Cements, Safexpress, ICICI Prudential Life Insurance, and SBI.

A lot of the core innovation and technology work for the IBM POWER10 processor, which plays a critical role in our hybrid cloud strategy, was designed in India by our Systems Lab.

IBM Research Lab in India is advancing Watson’s ability to understand language (NLP), build trust and transparency and confidence in business predictions, as well as help businesses automate and scale AI. Globally, IBM is the leader with 9,130 US patents in 2020, and India continues to be the second-highest contributor to IBM’s patent leadership with 930 patents granted to inventors from India. India labs are closely aligned to our strategy, and the pioneering work from these labs is integrated into IBM products, solutions and services.

IBM India Software Labs has been responsible for delivering IBM Cloud Satellite features that enable automated deployment of solutions on IBM and other cloud service providers. We believe that clients benefit most from an ecosystem of partners working together to co-create and co-innovate to offer the best platforms, products, and services .

IBM has a $1-billion investment committed in hybrid cloud ecosystem over the next three years to support partners and build a billion-dollar portfolio with each of our key global system integrators, as we help clients with the high-value skills, solutions and expertise required to be competitive and resilient.

We believe hybrid cloud is the future, and we have made significant investments (to realise its full potential).

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