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Believe it or not, IBM (International Business Machines Corp.) one of the most renowned Information Technology companies, is all set to flex its muscles in India. Though lay offs and pay cuts seem to be the order of the day, IBM believes in strengthening its presence in India. As of now the company is downsizing elsewhere. Last month, IBM cut 5,000 business-services jobs, mainly in the U.S.
Over the years, Tata Consultancy Services Ltd. and Infosys Technologies Ltd. have been attracting US companies with good –quality, cheap labour. Now IBM the world’s biggest computer-services provider is apparently targeting India to beat the local outsourcing giants at their own game.
As per the latest reports, IBM has inked contracts with few of India’s topmost companies, including, Bharti Airtel Ltd and Kotak Mahindra Bank Ltd., the former partner of Goldman Sachs Groups Inc. in India. The approach adopted might help the MNC reap rich dividends in the long term, as India’s economy doesn’t seem that gloomy in the upcoming years. IBM currently has around 73,000 Indian employees on its pay roll. The good news being that the company intends to intake employees from India’s Satyam Computer services, a company entangled in India Inc.’s biggest corporate fraud.
Indian markets are going through a metamorphosis, from being a back office operator to assuming the role of one of the fasted growing economies having a market flooded with fast-growing companies. The services market is worth almost $5 billion, according to research firm
As per the projections of International Monetary Fund, India’s economy will grow 5.3 percent in the year starting April 1, while U.S. economy will shrink 2.6 percent this year. No wonder, IBM not just rode, but galloped its way into the Indian markets, to cash in on the opportunities available.
IBM’s trade deals with India have been consistently on the rise, and in fact its being more than from any other country in the past three years. IBM’s sales in India leap-frogged by 26 percent last year, compared with 15 percent in China and 18 percent in Brazil.
IBM, currently caters to more than 13 percent of the Indian market, which includes technology and business consulting services, according to one of the well-known research firms, while Tata Consultancy, the biggest India-based computer- services company, merely has 9.7 percent contribution while Wipro Ltd. has minuscule 4.5 percent of the total domestic share. Infosys, the No. 2 Indian services company globally, has just 0.2 percent of its domestic market.
IBM had set up its shop in India in the 1950s, but had to pull the plug half way with political situation turning hostile for them. IBM started refocusing on the market again about a decade ago, by starting a local research lab in 1998
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