Small-unit impetus to IBM growth

Calcutta, Sept. 9: IBM India is opening offices in tier II and tier III cities to tap small and medium businesses (SMBs).

The company said India, China, Korea and the countries of the Association of Southeast Asian Nations were the fastest growing markets for small and medium businesses.

“After Jamshedpur, we will go to Nashik, Surat, Bhubaneswar, Jaipur, Madurai and Ludhiana,” said Vivek Malhotra, vice president — global small & medium business, IBM India. The company earlier opened similar centres in Visakhapatnam, Chandigarh, Nagpur, Coimbatore, Goa, Bhopal and Lucknow.

India contributes 24 per cent to IBM’s growth in the SMB segment, while China contributes 35 per cent.

The company’s SMB division contributes nearly 20 per cent to its total revenue.

“In the eastern region, Chhattisgarh, Jharkhand, Orissa, Bengal and Assam have a huge potential in the segment,” Malhotra said.

“The offices will help us in being close to our customers. This presence is critical since the SMBs employ almost 70 per cent of the global workforce,” said Malhotra.

In the Indian subcontinent, the SMBs have spent around $7.7 billion to ramp up their infotech infrastructure. Research agency ACNielsen forecasts this amount to go up substantially in 2008. There are over nine million SMBs in India and each of them spends around Rs 30 lakh on IT solutions.

IBM plans to revamp its solutions to meet SMB needs. It will scale down solution and application functionalities to suit operational-management capabilities and budgets.

“SMBs are looking for operational efficiency, lower cost of operations, security and an infrastructure that’s easy to use. We are investing to strengthen education, demand generation and technical support to business partners,” Malhotra said.

IBM has increased incentives to its partners who are associated with SMBs.

The company has presence in 300 Chinese cities through 9,000 business partnerships. In India, it is present in 200 cities and has 2,500 partners.

According to figures released in the IBM PartnerWorld 2007, the company will open offices in 25 tier I and II cities in China by the end of the year.

source: http://www.telegraphindia.com/1070910/asp/business/story_8296268.asp