Ibm Corporation To Move Out Of Distribution, Servicing

IBM, which now sells more than 74 per cent of its products directly through its joint venture, Tata Information Services Ltd (TISL), will reduce its exposure to less that 15 per cent within the next four to five years and depend mainly on its business partner to carry on the distribution and servicing activities.

IBM says it is comfortable with the present 50:50 equity partnership, and neither partner has any plans to raising stake in the equity of TISL. IBM's vice-president (product management) in charge of the Asia-Pacific region, Susan Whitney, said the company would consolidate its core technical strengths and competencies.

Within the next couple of years, systems and solutions will contribute 50 per cent to TISL's total turnover on a year-to-year basis.

Last year, it had recorded a turnover of Rs 340 crore.

In the next four to five years, almost two-thirds of the investment in the IT industry worldwide will be on solutions and services.

Solutions and services, especially for small and medium businesses, include maintenance, network station management and systems integration, particularly in Asia where the trend is to outsource the entire IT requirement.

Whitney said the Indian industry is looking for partners to implement business solutions. IBM will thus make major investments in developing industry expertise in areas of finance, manufacturing, education and retail sales.

IBM wants to focus on network computing as its key area of growth in India for the next few years.

This segment is estimated to witness a ten-fold growth. There will be opportunities to provide information since it comprises the server, the browser, the operating software, applications, the data, the local and the wide area networks as well as systems management capability.