IBM, INTEL EYE SMES IN INDIA

Anirvan Ghosh, Bangalore
The Economic Times (Bangalore edition)

The world’s two biggest infotech giants IBM and Intel have drawn up plans to tap the small and medium enterprises (SMEs) in India, which are expected to invest over $1 billion in the next one year on IT solutions.

“Last year, our SMB business grew more than 50%,” said Shailesh Agarwal, vice-president for IBM South Asia. Agarwal says that the business is much more predictable and hence follows a linear growth rate compared with businesses with large clients that typically are important but are unpredictable. IBM is planning to roll out into more markets, in smaller towns and cities, targeting the burgeoning SMB population there. “We are going to have a geography centric strategy,” he says.

“We are seeing the smaller businesses leapfrogging — they are going straight for a full implementation of IT and net-related needs, from zero installation,” he says, explaining the reason for targeting specific verticals in various sectors. The US-based multinational is now moving fast to achieve its target of being present in 14 new centres by the year-end. Such cities include Coimbatore, Cochin, Jaipur, Lucknow, Surat, and Bhubaneswar. IBM has already rolled out road shows in most of these cities.

IBM’s revenue grew at a compounded annual growth rate of over 49% over the last four years and it is targeting a revenue of $1 billion by December this year. “How much more we can target the smaller businesses is a crucial to achieving our targets,” says Agarwal.

“We are targeting all sectors, ranging from automobiles to fashion and apparel,” points out Narendra Bhandari, director, software and solutions group for APAC region. Intel is pushing for its business exchange portal, specifically designed for small businesses and expects a growth of around 24% from this alone in this fiscal. This, along with its Atom processor which is a much cheaper version of the Core Duo, are being advertised in smaller towns and cities through roadshows, and other media.