Bangalore: International Business Machines Corp., or IBM, said sales of its products and services through alternative mediums such as phone and Web have helped accelerate its growth in India, one of the fastest growing market for software and hardware products in the world.
Potential market: IBM office building at Madison Avenue, New York. The firm’s India revenues for 2007 are estimated to exceed $1 billion
Sales through the Web and phone accounted for one-fifth of IBM’s revenues in 2007, up from about 5% in 2006, said Sanjiv Pande, vice-president, IBM.com, the channel for the company’s phone and Web sales. While IBM does not disclose country-specific revenues, its India revenues are estimated to exceed $1 billion (Rs4,140 crore) for 2007.
“Client preferences in terms of technology acquisition are changing,” said William C. Doscas, vice-president, IBM.com. He added that customers are looking for ease of use in sourcing and deploying technology. Globally, IBM.com accounted for about one-tenth of the company’s reveneus of $98.8 billion in 2007.
Through IBM.com, the company has been selling about 10 different service offerings such as email security services and NOC (Network Operations Centre) Inside, a network management service, to small and medium businesses in India.
“Before we decide to sell something over phone, we will check whether it is tele-sellable or not,” said Pande. He added that the scope of such services should be finite. Service offerings that can be easily priced and implemented faster without customization and which do not lead to too much of a discussion for customers are part of IBM.com’s portfolio.
Services such as IT and back office outsourcing are not part of the portfolio.
Compared with the usual tele-sales model, wherein a sales person calls on a customer, IBM has seen a three to four fold rise in productivity and efficiency through Web and phone sales.
“As against three to four calls a day by a sales person (in the old tele-sales model), a team member of IBM.com is now able to reach 15-20 customers a day through phone and the Web,” Pande said, without disclosing the decline in the company’s sales expenditure. The Indian sales team of IBM.com has around 150 employees spread across cities such as Bangalore, Mumbai and New Delhi.
Buoyed by the success of the model in India, IBM is looking to leverage the Web and phone sales team here to tap into other markets such as the UK.
Other multinational companies such as Dell Inc. and Hewlett Packard Corp. have also been selling their products and services through alternate mediums such as phone and Web sales in India. Dell, which has been selling its computers online, has recently taken the retail route in the Indian market to boost its sales.
India’s domestic IT market is expected to touch $50 billion by 2012, according to research firm IDC as companies deploy technology to cut costs and boost competitiveness. The domestic IT market was worth Rs90,014 crore (by sales) in 2007.