CHENNAI: US-based technology corporation IBM, despite seeing clear signals of recovery from the emerging markets that it operates in, rather than from its traditional markets such as the US and Europe, is sticking on to its strategy of taking up high-value jobs and remaining a premium brand. Speaking to ET, IBM India global delivery head Rajesh Nambiar discussed the company’s decision not to transform during the downturn.
“Way back in the late 90s when IT hardware was said to be booming, we took a decision to get out of the hardware business and move into the software and solutions business. It was because the consumer model would not have worked for us. Serving enterprises was our core strength, and we could not have handled the mass commoditisation of electronic hardware,” he said.
So, at the turn of the century, IBM transformed from being the ‘business machines’ corporation to a software solutions provider. The current share of software and services in IBM’s revenues is 79% and that of hardware is 19%.
“Again somewhere in 2003-04, after the dotcom bubble-burst, we began the transformation from being a software solutions provider to a premium solutions delivery corporation. We made acquisitions in the consulting and analytics space to strengthen our portfolio in the top-end market and integrated individual functions within the company to be able to make premium offerings,” said Mr Nambiar.
So, IBM underwent transformations without waiting for a downturn to trigger it. Now, during the downturn, when global corporations, particularly in the IT space, are on an introspection process, trying to transform and adapt themselves to the current economic scenario, IBM is retaining its premium status, armed with its integrated global delivery platform. This is despite the fact that lower-end markets like Asia are where the company has been seeing growth in the past year.
“Our major markets (developed ones), contribute to 80% of our revenues, with what we call ‘growth markets’ (emerging markets) contributing 20%,” Mr Nambiar said. “We have been noticing that the latter have been growing at a rate 4-8 points higher than our regular market,” he added. Revenue increased 18% in Brazil, Russia, India and China alone, last year.
Source:
http://economictimes.indiatimes.com/Infotech/Hardware/IBM-to-stay-with-high-valu
“Way back in the late 90s when IT hardware was said to be booming, we took a decision to get out of the hardware business and move into the software and solutions business. It was because the consumer model would not have worked for us. Serving enterprises was our core strength, and we could not have handled the mass commoditisation of electronic hardware,” he said.
So, at the turn of the century, IBM transformed from being the ‘business machines’ corporation to a software solutions provider. The current share of software and services in IBM’s revenues is 79% and that of hardware is 19%.
“Again somewhere in 2003-04, after the dotcom bubble-burst, we began the transformation from being a software solutions provider to a premium solutions delivery corporation. We made acquisitions in the consulting and analytics space to strengthen our portfolio in the top-end market and integrated individual functions within the company to be able to make premium offerings,” said Mr Nambiar.
So, IBM underwent transformations without waiting for a downturn to trigger it. Now, during the downturn, when global corporations, particularly in the IT space, are on an introspection process, trying to transform and adapt themselves to the current economic scenario, IBM is retaining its premium status, armed with its integrated global delivery platform. This is despite the fact that lower-end markets like Asia are where the company has been seeing growth in the past year.
“Our major markets (developed ones), contribute to 80% of our revenues, with what we call ‘growth markets’ (emerging markets) contributing 20%,” Mr Nambiar said. “We have been noticing that the latter have been growing at a rate 4-8 points higher than our regular market,” he added. Revenue increased 18% in Brazil, Russia, India and China alone, last year.
Source:
http://economictimes.indiatimes.com/Infotech/Hardware/IBM-to-stay-with-high-valu
