IBM foraying in big way in smaller cities

Global information technology giant IBM is foraying in a big way in smaller Indian cities. It will set up small branches in nearly 40 locations withing a year to sell its products and solutions to small and medium size clients.

This is part of IBM’s strategy to increase revenue from growth markets, including India, China, Africa and West Asia, to 30 per cent by 2015 from the present 22 per cent. IBM has set up a special growth markets unit headquartered in Shanghai.

The $107-billion IBM will have branches in tier II and III locations with its own employees to serve the IT needs of local industries, said Mr David LaRose, Vice- President, Business Partners, Growth Markets, IBM, who is spearheading the expansion in growth markets from Shanghai.

IBM will open up small branches in nearly 100 locations in growth markets in the next 12 months. It will identify new cities depending upon the IT spend in that region. It will create an ecosystem involving local business partners to deliver the solutions, Mr La Rose said on the sidelines of IBM PartnerWorld. IBM will spend considerable amount of time and money in training its partners, he said.

Annually, IBM invests $2 billion in business partners globally with 50 per cent of it invested in growth markets. In 2011, revenue from growth markets increased 16 per cent. Revenues from BRIC - Brazil, Russia, India and China – countries increased by 19 per cent, he said without giving an absolute number.

China dominates

Within the growth markets, IBM gets nearly 50 per cent of its revenue from greater China consisting of China, Hong Kong and Taiwan. The rest comes from Russia, Central Europe, Latin America and West Asia and Africa. India is one of the fastest growing markets for IBM, he said.

>raja@thehindu.co.in

(The reporter is in New Orleans at IBM’s invitation.)

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