Bangalore/San Francisco: IBM, the world's largest computer services company, on Tuesday announced plans to invest nearly $6 billion in India over three years, underscoring the country's growing importance as a global hub for information technology outsourcing and expertise.
"India and other emerging economies are an increasingly important part of IBM's global success," Samuel Palmisano, the firm's chairman and chief executive, told more than 10,000 company employees gathered in the grounds of a palace in Bangalore.
IBM said it plans to expand its services, software, hardware and research businesses in India, where it already is the largest multinational company with 43,000 employees in 14 cities.
The deal, almost triple the $2 billion that IBM has already invested in India over the past three years, is the biggest investment by a multinational corporation in India in recent years.
International Business Machines Corp of Armonk, New York, is among a growing number of multinational companies boosting investments in India, whose economy expanded nearly 8 per cent last year as demand surged for its vast pool of English-speaking and relatively low-wage technical workers.
The meeting in Bangalore includes the company's first investor conference outside the US, IBM said. Chief Executive Samuel Palmisano, Chief Financial Officer Mark Loughridge and the heads of IBM's main businesses are attending the two-day event.
Palmisano said IBM's plans in India include centres to automate information technology services and provide clients with "one-stop shopping" for computer hardware information and products.
Innovation centre
IBM also will develop a telecommunications research and innovation centre at its laboratory in Delhi and establish a hub linking IBM consultants, developers, engineers and researchers.
"India and other emerging economies are an increasingly important part of IBM's global success," Palmisano said in remarks prepared for the speech to employees.
"IBM is not going to miss this opportunity." IBM earlier this year opened a centre in Bangalore that combines its business consulting, research, software and hardware capabilities to help customers improve supply chain functions and monitor banking risks and compliance. In 2004, IBM bought Daksh, an Indian back-office consulting business that now employs about 20,000.
India's software services sector is likely to grow by more than 25 per cent for the year to March, 2007, on rising demand for outsourcing, India's National Association of Software and Service Companies (NASSCOM) said last week.
Contracts worth a combined $100 billion are coming up for grabs over the next two years, the group estimated. Round Rock, Texas-based Dell Inc, the world's number one personal computer maker, in March said it planned to double its staff in India over three years, to 20,000.
In information technology consulting, IBM's competitors in India include Tata Consulting Services Ltd., Infosys Technologies Ltd., and Wipro Ltd India's software exporting industry is on track to reach a target of $60 billion in exports by 2010, NASSCOM President Kiran Karnik said last week.
Computer services such as consulting, outsourcing and system maintenance accounted for $47.4 billion of IBM's 2005 total revenue of $91.1 billion.
The company in April reported a 22 percent increase in first-quarter net income, to $1.71 billion, after on lower costs and increased sales of advanced microprocessors for video game machines.
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