IBM focuses on smaller towns for biz growth

Our Bureau Coimbatore | Updated on June 08, 2011 Published on June 08, 2011

Mr Nipun Mehrotra   -  Business Line

IBM is not a consumer-oriented company but an enterprise-oriented company and it will expand its presence from 22 cities to 47 cities by 2013 as it looks at the smaller towns in India to drive its business growth, according to Mr Nipun Mehrotra, Vice-President, General Business and Geographic Expansion, IBM India/South Asia.

He also sought to differentiate IBM from many other companies in that it focussed more on doing work for its Indian clients within India rather than doing work for its global clients from India and remarked ‘IBM is investing in India for India'.

Speaking to newsmen in Coimbatore on Wednesday after the opening of IBM's Coimbatore office, he said the larger part of IBM's business was from outside cities such as Mumbai, Delhi, Chennai or Bangalore and IBM had to look at small cities and had to ‘invest in those places so that it is aligned with the market potential'.

The advantage of being present in small towns was that the ‘market size itself' would grow faster and working with the clients would create new areas to partner with them to solve problems for which they lacked capabilities on their own. Mr Mehrotra said the spend on IT as a percentage of revenue was much lower in smaller cities like Coimbatore compared to Mumbai or Chennai. Even the country's spend on IT as a percentage was lower compared to the developed world. Hence, India itself would grow as an IT market and the country itself presented two markets-relatively developed cities like Mumbai and small towns and cities that are yet to see significant investment in IT.

He pointed out that “there was not that much space that big cities have for new business” and it was necessary for companies to go to smaller towns such as Coimbatore, Salem, and Tiruchi for business expansion.

He was confident that such a strategy would help drive up IBM's ‘business faster'. While the lower base in small cities could be a factor for higher growth percentage, IBM was actually seeing doubling or trebling of its businesses in some of these smaller towns.

Coimbatore market

On Coimbatore market, he said while the company has many verticals, it would focus on working on verticals such as engineering, textiles, and banking. It would bring its bouquet of services including global business service, global technology services, global process services and the benefits of its research done elsewhere would flow to the city as well.

IBM was not restricting its business thrust and would meet what the city needed. Business size would not be a limiting factor in working with the clients and it was extremely aggressive and would go to even cities where it did not have any clients.

Mr Mehrotra said IBM has just started in Mangalore and was present in Mysore. After Coimbatore, it wanted to open offices in Tiruchi.

Published on June 08, 2011
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