Big Blue: India at the heart of IBM's global playbook on AI, Cloud, quantum

IBM is reinventing itself around a trinity of AI, hybrid cloud, and quantum computing - with India at the heart of its global innovation and growth strategy

IBM, the technology giant that has shaped every era of enterprise computing, finds itself at a crossroads. Known for setting industry benchmarks — whether in mainframes, middleware or artificial intelligence — IBM is betting its future on a trinity of technologies: Artificial Intelligence (AI), hybrid Cloud, and quantum computing. 

India mirrors the $63 billion firm’s global strategy — housing some of its most critical software, hardware, and research labs, while emerging as a fast-growing domestic market for its new-age solutions. For Sandip Patel, managing director of IBM India and South Asia, the task is cut out: To prove that Big Blue can thrive in a world defined by generative AI models and multi-Cloud architectures. 

Investors seem to believe IBM can. Its price-to-earnings multiple of 45 is more than double Accenture’s (20), and above Infosys and TCS (around 22). But the challenge is formidable. 

Though the market IBM faces today is far removed from the one described in the 2002 memoir of former IBM CEO Louis Gerstner, Who Says Elephants Can’t Dance?, Gerstner rescued IBM from collapse by shifting the focus from hardware to services and consulting. Now the elephant must not only dance — it must do a lot more in a digital economy ruled by hyperscalers, startups and open-source ecosystems. 

Ramkumar Ramamoorthy, partner at Catalincs Advisory and former CMD of Cognizant India, says, “IBM’s biggest strength has always been its ability to invest and innovate in frontier technologies. They were first in AI Watson, got early into the Cloud through Red Hat, and now are at the forefront of quantum computing. Their thought leadership has always been the industry benchmark.” 

IBM’s integrated model — combining hardware, software, consulting and services — was an asset in the era of aggregation, when clients sought a one-stop technology partner. But the era of disaggregation, symbolised by Amazon Web Services, Google Cloud and MS Azure etc, demands nimbleness. 

CEO Arvind Krishna, who took charge in 2020, has worked to strip away bureaucracy and bloat. The spin-off of its infrastructure services arm, Kyndryl, and acquisitions like Red Hat have sharpened the focus around hybrid cloud and AI. “IBM’s biggest opportunity lies in quantum. That could be the company’s next ‘Watson moment’—a chance to get its mojo back,” says Ramamoorthy. 

IBM acquired Red Hat in 2019 for $34 billion, and combines the company’s open-source technologies with its hybrid cloud and AI capabilities to offer clients comprehensive IT solutions. “Today, every enterprise has a mix — some workloads on public clouds, others on-premise or private. The need is to move data and applications seamlessly across them. That’s what IBM and Red Hat enable,” says Patel. 

Rather than compete head-on with hyperscalers (or large cloud services providers, like Amazon Web Services, Google Cloud, MS Azure etc), IBM is positioning itself as the connective tissue — a secure bridge across clouds. Its hybrid model has found resonance among regulated and other industries, where data residency and compliance are critical. Early in October IBM partnered with Airtel, to augment the company’s Airtel Cloud. IBM runs some of the largest cloud operations across banking, logistics, retail and other industries. 

AI for enterprise 

If the consumer internet has its ChatGPTs, Geminis and Copilots, IBM which had a headstart in AI, is quietly shaping the enterprise side of AI. Its Watsonx platform — an AI and data foundation suite — targets mission-critical use cases: Risk modeling, compliance, HR automation and portfolio management. 

IBM’s edge lies in credibility. “IBM’s relevance comes from decades of managing mission-critical workloads,” says Praveen Bhadada, CEO of Neovay Global, a Gurgaon-based consultancy. “It is trusted in regulated sectors like BFSI (banking, financial services and insurance), healthcare and telecom. By integrating hardware, software and AI, IBM positions itself as the backbone of secure, compliant transformation.” 

Unlike hyperscalers that chase consumer-scale AI models, IBM builds tailormade systems. Its recent collaboration with BharatGen, an AI initiative backed by the department of science and technology and ministry of electronics and information technology, focuses on Indic language AI models. Patel says, “We’re helping BharatGen develop inclusive, multimodal LLMs designed for India. They’ll run faster, cost less and use fewer GPUs.” 

For the return on AI investments Patel points to IBM’s own use of AI. IBM expects $4.5 billion in savings by the end of 2025 from automation and AI deployment. For example, Its HR chatbot AskHR already answers 94 per cent of employees’ queries within minutes, automating 80 tasks and cutting HR costs by 40 per cent. “If we can’t use our technology ourselves, why should anyone else believe in us?” asks Patel. 

Interestingly, he brushes aside any concern of AI impacting jobs. “Every tech wave changes jobs. When accounting software arrived, chartered accountants had to reskill. Today, AI creates roles like prompt engineering that didn’t exist five years ago,” says Patel, himself a CA who took over the mandate of spearheading IBM India and South Asia in 2020. 

Quantum: The next frontier 

If AI and hybrid cloud are today’s growth engine, quantum computing is IBM’s moonshot. India is also emerging as one of the key nodes in that strategy. IBM has announced plans to install one of its latest quantum computing machines in Andhra Pradesh early next year, enabling universities, startups and enterprises to build applications in domains such as portfolio optimisation and materials discovery. Patel says, “It will help solve problems that traditional computing cannot solve. Quantum algorithms are already showing promise in areas like bond trading and drug discovery.” 

The firm is a partner in India’s National Quantum Mission and has supported research through institutions such as IIT Madras and BosonQ Psi (BQP), which access IBM’s global quantum systems remotely. New York-headquartered BQP, with an office in Bengaluru is a software as a service (SaaS) firm which uses quantum computing to create faster and accurate engineering simulations for complex problems.  IBM’s contributions go beyond research. With its Guardium software, the firm is embedding quantum-safe cryptography into enterprise security systems. 

Deep roots in India 

India is central to IBM’s global playbook — both as a market and an innovation hub. The company operates across the full spectrum here: research, software, consulting, and delivery. Patel notes, “IBM India mirrors IBM global. We innovate in India for India and the world.” 

That innovation is visible in flagship projects. IBM built and runs SBI’s mobile banking app YONO (You Only Need One). It powers  Amul’s supply chain and keeps Indian Oil Corp. Ltd’s gas distribution running — systems that remained uninterrupted through the pandemic. Millions of interbank and credit card transactions in India pass through IBM systems. 

The company is now expanding its physical footprint beyond metros. New software labs in Gandhinagar, Kochi, and soon Lucknow join established hubs in Pune, Bengaluru, and Hyderabad. Each centre focuses on specific technologies — Agentic AI in Bengaluru, partner-enablement ecosystems in Kochi, and GovTech applications in Lucknow. In India, IBM has also supported the government’s Semiconductor Mission. 

Despite its engineering pedigree, IBM must still fight perception battles in India. “Their brand was once sacrosanct  — nobody ever got fired for choosing IBM,” Ramamoorthy recalls. The Indian market is more fragmented and price-sensitive now, with enterprises experimenting freely with startups, niche vendors and even large companies. 

“IBM must work with a broader canvas of partners. Startups, academic institutions, even competitors. That’s the only way to attract the best talent and win in India’s collaborative ecosystem,” he says. 

IBM’s India journey faces three friction scenarios, notes Bhadada: Talent scarcity in AI and quantum, cost sensitivity among enterprises in general, and complex regulatory frameworks for data sovereignty. “To win, IBM should focus on localized innovation, talent nurturing, and scaling ecosystem partnerships that convert its 'tech trinity’ into sizable business outcomes,” Bhadada adds. 

IBM must operate at scale while moving with the agility of a startup. It competes simultaneously with hyperscalers, boutique AI firms, and open-source ecosystems. “Today’s market demands thinking big and being agile. IBM has to be as entrepreneurial as it is institutional,” says Ramamoorthy, adding: “In today’s context, it is no longer enough for the elephant to dance. It needs to run, jump and take quick turns.” 

Its future hinges on executing its technology trinity well — AI, cloud, quantum. Patel frames it as a continuum of innovation: “We were there when mainframes defined computing, when the internet changed business, and when AI started to transform industries. Now, as India enters a digital renaissance , IBM will help power it with AI, hybrid cloud, and quantum.” 

IBM India milestones 

2018: Partners with IIT Bombay and Delhi to accelerate AI research in India

  2019: Vodafone Idea, Bharti Airtel renew IBM engagement for Cloud, AI, managed IT services, etc

  2020: Partners with NSDC, Meity, Telangana government to empower youth in new age skills

  2021: Partners with Bengaluru Airport for digital, IT transformation

  2023: BosonQ PSI becomes the first Indian startup to join the IBM quantum network

  *  Collaborates with Parle Products to drive digital transformation using cloud and AI

  2024: Strikes deal with LTI Mindtree for Quantum Innovation Ecosystem

  *  Collaborates with C-DAC to accelerate India’s chip design and manufacturing capabilities for high performance computing

   *  Works with L&T Semiconductor Technologies for advanced processors

  2025: Sets up software labs in Lucknow, focussed on AI for govt tech

  *  IBM, TCS and government of Andhra Pradesh unveil plans to deploy India’s largest quantum computer in the country's first Quantum Valley Tech Park at Amaravati

  * Collaborates with BharatGen to accelerate AI adoption in India powered by Indic LLMs

  *  Bharti Airtel announces a strategic partnership with IBM to augment Airtel cloud

  (Note: List is not exhaustive; include key developments) Source:  IBM

 

The writer is a New Delhi-based independent journalist