IBM and India

The New York Times writes that India has become a critical component for the company:

“A significant part of any large project that we do worldwide is today being delivered out of here,” said Shanker Annaswamy, I.B.M.’s managing director for India, who presides over what is now the company’s second-largest worldwide operation. In the last few years, even as the company has laid off thousands of workers in the United States and Europe, the growth in I.B.M.’s work force in India has been remarkable. From 9,000 employees in early 2004, the number has grown to 43,000 (out of 329,000 worldwide), making I.B.M. the country’s largest multinational employer.

I.B.M. is growing not only in size by adding new hires, but also in revenue. The company’s business in India grew 61 percent in the first quarter of this year, 55 percent in 2005 and 45 percent the year before.

That growth has not come just from taking advantage of the country’s pool of low-cost talent. In recent months, the technology hub of Bangalore has become the center of I.B.M.’s efforts to combine high-value, cutting-edge services with its low-cost model.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.