Abraham Thomas, MD & CEO, IBM India talks to Prashant L Rao about IBM India’s plans for the coming year. Big Blue is committed to being a total solutions player offering everything from strategy to implementation, maintenance and management of IT assets

Strategically, where is IBM heading?
Customers are focusing on how they can leverage technology to add value by controlling costs and increasing productivity. They are becoming discerning about investments, which plays out well for companies that provide solutions. IBM is in the sweet spot to put consulting, processes and solutions together and provide total solutions. The days of point solutions are gone. They were fashionable when people had the time and skills. When business imperatives are high, people have less time and patience. The value IBM brings is that you need to deal with only one company. We have 800 people from the erstwhile PwC letting us do everything from business and IT strategy to implementation, maintenance and management. No other IT company can tell the customer this.

IBM has begun focusing on e-business on demand where customers use computing on demand rather than buy software, hardware and networking. Users want technology to help them immediately. This trend is most pronounced in the US. Some of our servers have standby capacity, customers needing additional capacity are charged for that piece and the period of use.

We want to be the market share leader. Globally IBM is the market leader in most countries. India, due to historical reasons, isn’t one of them. But, we are making great progress. To gain market share we need to improve customer satisfaction. This is not a slogan. It is part of basic survival and success of business. We have to provide a challenging environment for our employees; we are driving this through our HR policies.

The verticals that we are targeting are telecom, financial services sector (banking, finance & insurance), industrial, SMB (small & medium business) and distribution to a certain extent.

Globally outsourcing is big business for IBM. Is this true of India?
Companies are realising that IT is not their business. A manufacturing company’s core competency is to manufacture and distribute efficiently. Outsourcing is becoming fashionable as it lets you reduce costs. We are doing everything from desktop support to full scope outsourcing where IBM becomes the IT department of a company.

Of late there have been many rebranding announcements from IBM. What’s the rationale behind these?
The reason we did the rebranding was to bring more clarity to our strategy. In servers we have the eServer brand. In the PC division we rebranded all the products with the Think moniker. The software group always had four distinctive brands—Lotus, Tivoli, Websphere and DB2. There’s a fifth piece now with our acquisition of Rational application development tools.

Have you quantified the benefits of outsourcing?
It is very difficult to quantify that this solution will give you 20 percent RoI. The best way to do that is outsourcing where the value proposition comes up front. Outsourcing deals are long term, lasting for ten years. A company can compare the contract value of X million dollars every year with their projected IT expenditure for the same period. This is why customers are moving toward e-business on demand.

IBM has been in the forefront of vendors supporting Linux. What makes Linux attractive?
Linux is attractive as it is based on open standards. From a customer standpoint it isn’t ‘free’, you need hardware and support. It is lower cost than the alternative. In a cost-conscious country like India, this is a resounding value proposition. Some state governments want us to support Linux. We support this movement 100 percent. Globally, IBM is the largest hardware provider for Linux. We want to do the same in India. The acceptance of Linux on the desktop is around the corner. IBM sponsors a Linux challenge world wide. India sent the largest number of entries this year. Four of the winners are from India; each of them gets an IBM Thinkpad with Linux loaded on it.