Info-tech

Global tech talent crunch to persist for the next decade: IBM chief

Venkatesha Babu Bengaluru | Updated on November 20, 2021

Arvind Krishna, Chairman & CEO, IBM

Says 100% of the company’s CSR funds in India is used for skilling

Tech talent crunch is not just an Indian, but a global, phenomenon, and is likely to stay that way for the next decade at least, said Arvind Krishna, Chairman and CEO of 110-year-old global technology giant International Business Machines (IBM).

The IBM CEO, who is on a visit to India, was speaking to a select group of journalists on a range of issues in New Delhi on Friday. Explaining why the talent crunch was happening now, and, say, not five years ago, Krishna said: “Today, every company, every country, every government has woken up to that fact that technology is not a cost of doing business, but technology is a fundamental competitive advantage. That is why there isn’t enough (tech talent) supply.”

The IBM chief said that this was especially true in areas such as AI, Quantum, Blockchain and cybersecurity, where supply was significantly behind demand, and this will continue to be so for the next few years.

He also outlined the work the company was doing in skilling people to mitigate the talent shortage.

New business make-up

Under his leadership, IBM has optimised its portfolio, focussing more on high-margin, consulting and software, which constitute about 70 per cent of its business. It has spun off non-core, relatively low-margin business, like its managed infrastructure services, which is now a new company Kyndryl.

“We have increased our spending on organic R&D. We have also increased our M&A spend. We have acquired 17 companies since last April, across security, multi-cloud and several other areas. Almost half of IBM today is in software. This is a dramatically different business make-up than it has been over the past decades. That will allow us to participate where there is growth in the market,” Krishna added.

While optimising portfolio is one part, under Krishna’s leadership, IBM has also emphasised more on partnerships with the likes of Microsoft, Amazon, Salesforce, SAP, Adobe, Oracle, and ServiceNow.

“Many people find it surprising when I turn around and say that the likes of Microsoft and Amazon are our partners, with the pipeline of business (we do) measured is in billions of dollars, not small numbers. Are there parts of business that we compete? Yes, but there is a very large part where we also cooperate to create a win-win-win ecosystem for clients, partners and IBM.”

Win-win partnerships

Krishna said that IBM partners with a plethora of Indian players, including Infosys, Wipro, Tech Mahindra, and TCS. He said the company would generate $35 billion in cashflows over the next three years, and it will not only give a return to shareholders in the form of dividends, but also re-invest to grow the business and further increase the cash flow.

Skilling India effort

The IBM leader, who met several senior Cabinet Ministers, including Finance Minister Nirmala Sitharaman; Minister for Railways, Communications, Electronics & IT, Ashwini Vaishnaw; and Minister of State for Skills and Entrepreneurship Rajeev Chandrashekar, said that conversations revolved around skilling and workforce development and the role IBM can play. “I am proud to say 100 per cent of our CSR funds in India is used for skilling. We also discussed Gati Shakti, of getting speed by digitising government platforms, which will allow more services to become available to more people. With a platform that has been built using a mixture of Aadhar, UPI and others, how does one improve life of a farmer, small craftsmen or a small enterprise, he wondered”

Pointing out that it was IBM that innovated ATM systems, barcode and even the US social security (mechanism), he said that the company will be happy to help India by participating in building systems at scale, secure and in a cost-effective manner. While IBM does not break-up country-specific revenues, Krishna said: “In the third quarter, Asia did really well and India was a very big piece of that. I am very pleased with the progress we have made here.”

Data sovereignty

Responding to a question on issues surrounding data sovereignty, the hot topic now, he said that there should be strict rules on how personal information is used.

“I am not going to opine on what social-media companies do in this regard. However, the information kept should have some safeguards.” If India mandated data localisation, the IBM chief said that he will not only welcome it but also endorse the move.

Published on November 19, 2021

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