IBM sees rise in clients' IT spend

Our Bureau Coimbatore | Updated on June 09, 2011 Published on June 09, 2011

Mr Nipun Mehrotra

Customers focus more on innovation, market expansion

As the global economy recovers from the bruises of 2008-09 economic slowdown, nearly 50 per cent of the clients surveyed by the Global IT giant IBM are looking at increasing their IT spend.

The IT users are also focussing on innovation and market expansion, according to Mr Nipun Mehrotra, Vice-President, General Business and Geographic Expansion, IBM India/South Asia.

Details of survey

Sharing details of a survey of about 2,000 global clients of IBM, including about 100 from India, with newspersons here, he said there is a significant shift now in the focus of IBM's customers globally, including from India. Compared with 2009, today a large number of companies are “not looking at cost improvement alone” but are also looking at revenue growth, client focus and innovation as a way forward.

He said while in 2009 only about 7 per cent of the customers wanted to focus on innovation, this number in 2011 had gone up to 29 per cent and compared to 7 per cent of the clients who then said customer focus was important, now 26 per cent of the clients swear by it.

There has been a shift in the attitude of customers in other areas as well.

While cost reduction and operational efficiency were the prime focus areas for 44 per cent of the customers in 2009, now to only 13 per cent of them these were the key concern.

As the economy recovers from the “difficult years” of 2008-09, customers have started to focus significantly more on innovation, on market expansion, revenue growth and “a little less on operational efficiencies”.

Mr Mehrotra said nearly 70 per cent of the clients now were “actively looking at business analytics” and this would be “the most significant business opportunity” for both customers and the IT companies over the next decade.

What was significant was that 50 per cent of the clients of IBM “are expecting to increase their investment in IT” and would spend more on technology this year than last year. The customers were looking for a balance on cost containment and areas to drive revenue growth and foster client relationship.

He said a majority of the clients were looking at “a more consultative type of relationship”, a “more partnering approach” from companies like IBM rather than having a “transactional relationship”.

Centenary year

Over the past few years IBM, which will be celebrating its Centenary year on June 16, had been “reinventing ourselves”, investing in higher value segments and sold components that were getting “commoditised” so that it could focus on higher value and innovation and become a globally-integrated organisation.

Asked how much of the $6-billion investment in India promised by the visiting IBM Chairman in 2006 has actually flowed into the country, Mr Mehrotra said the company's investment in the past few years was more than what was promised.

Asked about India's contribution to the overall share of about 21 per cent by the growth market in IBM's global turnover, he declined to reveal the numbers.

Published on June 09, 2011
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