Mumbai: The world’s largest computer services firm, International Business Machines Corp. or IBM, which won multi-year outsourcing deals worth $1.4 billion (Rs5,558 crore) in the December quarter in India, expects to continue its fast-paced expansion here as it lands more local business customers for flexibly structured solutions using what are called “service-oriented architecture” or SOA technologies.
The adoption of SOA, which IBM executives believe gives the firm an edge over some rivals, comes at a time when local customers are adopting newer technology to cut costs and fight competition with nimbler features.
SOA refers to a loosely tied collection of software applications designed to carry out individual tasks. Each application is self-contained and works with another piece of software depending on the need.
The architecture reduces the cost of deployment and increases flexibility in use of software that run businesses.
“The acceptance of SOA among larger clients in India is on par with clients in developed countries such as (the) US and Europe,” said Robert J. LeBlanc, general manager of global consulting services and SOA of IBM’s global business services division. IBM is seeing interest from both existing and new clients for its SOA offerings, he added.
In the December quarter, IBM won three large deals: a $600 million information technology outsourcing contract with Vodafone Essar Ltd, India’s third largest mobile phone services firm by customers; Idea Cellular Ltd, the country’s sixth-ranked phone firm; and a large deal from an as yet unidentified customer.
IBM is using SOA as a differentiator and is showcasing a nearly four-year-old engagement with Bharti Airtel Ltd, India’s top wireless phone firm, to win new deals.
“Customers are keen to know what we have done with Bharti and want to replicate that,” said LeBlanc, adding that IBM’s annual investments in SOA exceed $1 billion.
In India, the company has a team of 700 engineers involved in building SOA solutions, while the number of its workers capable of delivering and maintaining such solutions exceed 5,000. IBM’s delivery offices in India employ about 73,000 workers of an estimated 250,000 staff globally in its services business.
Colleen F. Arnold, general manager of global application services at IBM, said its India operations were helping the company expand into similar markets. “Talent from India is leading in building solutions for the emerging markets,” she said.
IBM has seen fast growing demand from customers in financial services, utilities, manufacturing and infrastructure businesses for its application services. The firm saw revenues growing by more than 20% in around 56 countries in 2007, among which India topped, Arnold said.
IBM’s annual revenues in India in 2007 exceeded $1 billion. Globally, IBM announced around $54.1 billion revenues from technology and business services in the year.