India to get $6 billion out of the Big Blue

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Tuesday, June 6, 2006

IBM will expand its service, software, hardware and research divisions in India its chairman and chief executive officer has said. The plan would give the subcontinent $6 billion worth of investment over three years.

Announcing the news in Bangalore to an audience of 10,000 employees, the package presented is three times as large as that invested by IBM over the previous three years, said Samuel J. Palmisano. "We see India's role as central to our global enterprise," he said.

The Public Utility Building - the modern face of Bangalore, India - bears remarkable resemblance to a computer chip.

The $6 billion investment by IBM, also known by the nickname "Big Blue," is larger than the $3.9 billion total foreign investment promised to India by Microsoft Corp., Intel Corp. and Cisco Systems Inc.

IBM is currently the largest multinational in India employing 43,000 people in 14 Indian cities. 15,000 new jobs were added last year as the company took 10,000 out of Europe. The new foreign investment is expected to create more jobs in India's thriving telecommunications industry.

Estimates put IBM's sales revenue in India at $1 billion. While the home market valuation of $15 billion is a figure expected to grow 25 per cent a year. In the first quarter of this year IBM's Indian wing grew 61 per cent compared to the year before.

"IBM is excited by the opportunities in India over the long term and we are also encouraged by the domestic opportunity that India offers," said Palmisano.

Addressing specifically IBM's plans in India the head said he wanted to automate IT services, create a "one-stop shop" for hardware information and IT goods, build a new R&D centre in Delhi and forge links between IBM's consultants, developers, engineers and scientists.

"IBM is not going to miss this opportunity," said Palmisano.