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IBM, which is splitting into two big public companies, expects to have a similar structure in India by the middle of next year.
This means, about a third or fourth of its workforce here will work for the new IT infrastructure services entity while the rest will be with IBM cloud services. It is estimated that about one-third of IBM’s total workforce of over 3.5 lakh work in India.
Arvind Krishna, CEO, IBM Global, told Indian journalists at a virtual media interaction on Friday that the first company, IBM, will focus completely on cloud computing.
“We have an open platform based on Red Hat technology that has tremendous traction and is at the heart of the hybrid cloud platform,” he said. IBM has many partners in India, such as Tech Mahindra, whose services will be leveraged here, he added. He further said IBM’s infrastructure managed services and competence centres in India touch close to 100 per cent of its clients.
Hybrid cloud approach
To a question on the kind of differentiation that IBM will bring to the table, as there are already big players in the cloud computing space, Krishna said: “I don’t think there is only one possible way to do things as opposed to maybe a hybrid cloud approach inclusive of private and public that allows for multiple public clouds.
“We believe that we have the best answer based on open technology that allows (users) to write one and run anywhere.”
“When you run across those multiple environments...I don’t believe any of those single cloud players will be attempting to answer how I can have one security regime that goes across those. That is the market we have connected — that we believe appeals heavily to many governments and enterprises and regulated industries. We believe that we have the best answer.”
Currently, Amazon Web Services and Microsoft dominate the market for cloud services. Krishna was the main architect behind IBM’s $34-billion acquisition of cloud company Red Hat last year.
Krishna said IBM is committed to its footprint in India. “As our business expands for services, it will open up opportunities for employment, promotion, skills and engagement with universities. We have a large presence in R&D in India. As our opportunity begins to grow, there will be more opportunities in both employment skills and back-into-the-local market.”
The business opportunity for IBM is a trillion-dollar total addressable market consisting of $350 billion of services, $450 billion of software and platform as a service and about $230 billion of infrastructure.
The decision to spin off the company into two distinct entities clearly signifies Big Blue’s aim to diversify from its traditional businesses. IBM divested its networking business in the 1990s, followed by its PC business in the 2000s and its semiconductor business later.
Eye on growth
Krishna said the company is being redefined for the future. “In doing so, we are creating market-leading companies. First, IBM, an innovation-based company will focus on hybrid cloud and AI.
The second company, code-named NewCo, is a managed infra service company, It is going to be focussed on service delivery excellence and automation. We do believe when we unlock the growth for both, IBM will return to sustainable single-digit growth,” he added.
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