IBM set to acquire NetSol

Network Solutions, a Bangalore-based Rs 140 crore IT infrastructure firm founded by Sudhir Sharma, is being acquired by Big Blue. No financial details were disclosed.

The acquisition will enable IBM to consolidate its position in the Indian domestic services market by strengthening its capabilities in the area of infrastructure services solutions in the mid-market business segment.

Said Sharma: "We will continue to operate as a separate entity and will continue to fully focus on the Indian market. The integration plan is being put in place and we should have a clear picture in due course."

Network Solutions topline of Rs 140 crore comprises of IT infrastructure hardware sales (55 per cent) and infrastructure management services (45 per cent).

According to industry analysts, IBM has acquired the firm as it is increasingly offshoring its global infrastructure management deals to India and Network Solutions has the required expertise to take care of a part of this.

The announcement of the deal comes just days after IBM chairman Sam Palmisano was on a visit to India.

"IT infrastructure forms the backbone of development and growth of any economic activity. The acquisition of Network Solutions will enable IBM to consolidate in domestic services and leverage its capabilities in building world-class infrastructure for our clients," said Shanker Annaswamy, managing director, IBM Global Services India.

Network Solutions has been a perennial competitor to Pradeep Kar-promoted Microland, another Bangalore-based firm which has seen many high-profile crests and troughs.

Established in 1993, NetSol focusses on implementation of convergence solutions for data, voice and video, security, wireless technology solutions, WAN & LAN implementations, infrastructure management, network design and implementation. Its focus has also been on structured cabling solutions, network management including remote management services and IP telephony services.

"Network Solutions is focussed on using continuous innovation to create value for our clients' business," added Sharma.

"As a combined entity with IBM, we will be able to achieve the mandate more effectively and be in a position to offer clients IBM's portfolio of offerings and expertise, in addition to our solutions, along with our industry and technology expertise."

Intel Capital had invested close to Rs 10 crore in the firm in 2000 which was bought back by NetSol later. In turn, Intel went on to acquire NetSol's consulting and software divisions.