Armonk-headquartered technology giant IBM has been focusing on digital transformation deals not only in developed markets such as the US but also in developing markets such as India. The company was in the spotlight in July this year when it acquired open source technology solutions provider RedHat for a $34 billion.
In a conversation with TechCircle, Lingraju Sawkar, IBM India general manager for its global technology services (GTS) business, said that GTS forms the major revenue chunk for the company globally and India plays a very important role as a market and technology development centre for the business.
How important is the GTS business for IBM globally?
IBM is a 100-year old company. It started its services division about 80-90 years ago as a support arm for the company’s hardware products. From there the journey has been a very interesting one in various flavors and forms. So, from being primarily a product services company, which was focused on installation, break-fix services, the business has evolved into a very large cloud, cognitive services, organization. The services business accounts for almost about 70- 80% of the organization's revenues, contributing significantly to the profit and loss of the company.
Tell us more about the GTS journey so far.
IBM, by virtue, has followed the mission objective of remaining in the high value spaces even as it has constantly divested low value businesses or businesses that have hit the point of becoming commoditized. It has also focused on acquiring companies and building capabilities in the high value services.
So for example, the acquisition of PriceWaterhouseCoopers in 2002 from a consulting capability perspective and an application perspective helped spin out what we call the scope of business services and technology services. Later the acquisition of SoftLayer, cloud company, played a role in developing the cloud services business in technology services. Likewise, the acquisition of QSS and QRadar spun out a very significant security services business.
Recently, we acquired a company called Sanovi Technologies, an India-based acquisition, which is focused around what we call disaster recovery services. As we started seeing a lot more disasters, either because of natural, man-made, human error, operator error or technology issues, the need to recover and keep the business running became all the more critical. In the old days, a bank would operate from nine to five. But now banking is a 24-hour operation. Likewise, customer connections or customer-focused businesses are 24-hour operations. So that's why IT systems are continuous and hence the acquisition of Sanovi, which focuses on disaster recovery.
What are the gamut of services that IBM provides as part of GTS?
We provide services such as application services, business process and operations, business resiliency services, business strategy and design, cloud services, digital workplace services, network services, talent and transformation, technology consulting services and technology support services. We provide these services across a number of industry verticals including aerospace and defense, automotive, BFSI, chemicals, construction, education, electronics, energy, life sciences, manufacturing, and media and transportation. These solutions and offerings are based on technologies such as artificial intelligence, blockchain and internet of things.
What are the cloud specific solutions being offered by GTS right now?
We sincerely believe that organizations will at any point in time deploy multiple cloud environments. And there could be up to 10 cloud environments within the client organization. We believe in the multi-cloud, hybrid cloud world. So, to manage a multi cloud hybrid cloud world we created and developed capabilities in what we call cloud brokerage services or CASB. We acquired a company called Gravitant, which is a California-based company but primarily operates in India. So in a nutshell, this is how the capabilities have been built up for the services business for IBM over a period.
We are also focusing on digital transformation. We're trying to understand when clients are looking at improving or enhancing their client experience or customer experience or connections in the front, or customer acquisition. That's one side of digital. The other side of digital being where organizations are looking at improved collaborative working models between their employees, suppliers, business partners and customers. For this, we're building a digital transformation framework for organizations.
The second area that we focus on across the board is security services, as the environment becomes open and goes into the cloud, and goes across into multiple places. The third aspect is migration and the fourth is managing the cloud platforms.
Could you elaborate on the migration and management services?
As part of the cloud journey, we engage with customers across four areas. One is advising customers on cloud movement. Which basically means that we are looking at the application landscape, analyzing which applications go and which ones stay and at the same time, which application needs to be modernized or which are lift-and-shift. The second part of it is moving, where we actually move the applications up. For this we have built a capability called cloud migration factory and this has been built out of India. We have a significant capability and skills here which enable cloud migration for the globe. All of this is based out of Bangalore and Chennai. The last part of it is ‘manage’, which is targeting the multi-cloud area.
You said that there are a lot of capabilities that function out of India. How big is the India unit and what else has been developed from here?
IBM has always been focused on two parts of the businesses in India. One is the focus on India as a market. We're proud to say that we were the first leading leading organization that focused on India as a domestic market opportunity and built capabilities for this market.
Now, having said that, parallelly we have built global capabilities out of here. The global capabilities have been in existence since around 2000 when IBM India also became a microcosm of the global capabilities. So, we have IBM represented in all facets here. Take research, for example. IBM India has a research laboratory, which is one among the 10 we have globally. It was started in IIT Delhi and now helps in the development of global solutions. The third one is automation labs which deal with application services, application development and application maintenance services.
Now, having said that, and India also provides a very interesting market, where some of the challenges of the market are so unique that they also provide an environment for developing what I call a first-of-a-kind solution.