It's not an exaggeration when it is said that IBM symbolizes innovation. Its innovation exercise started with Bharti Airtel in a big way three years ago, and now it's a continuing practice-thanks to 3,200 dedicated professionals deployed across IBM R&D labs in India. And, this number is increasing with each passing year, and so is innovation in different verticals.

Innovation is not only in terms of solution, but also in terms of business model. And, this new thought process has transformed IBM India. Presently, IBM is the only IT networking company in the world-and in India-to offer end-to-end solutions to customers right from hardware, software, services, and consulting. The company has been successful in morphing business and technology integration.

Technology can enable and drive innovation. However, technology must be combined with business insights to capitalize on technology's potential, and be capable of unleashing an organizations' creative energy. IBM is good in both of them-thanks to its consulting acquisition.

IBM is also bullish about BRIC (Brazil, Russia, India, and China) market. It is expected that over the next four years, the IT markets in Brazil, China, India, and Russia will grow with revenues more than two times the worldwide revenues, creating a market opportunity of more than $150 bn by 2010. And, it seems IBM think tanks were aware about the huge opportunities in BRIC countries, and were working on India strategy for last four to five years to put in place the missing links.

Under the leadership of Shanker Annaswamy, MD, IBM India/South Asia, the missing links are already in place and it's time to reap benefits. India is not only an exciting market, but also an innovation center for IBM worldwide. In terms of growth, IBM India has grown by 38% in 2006, and India is the highest growing market among BRIC countries. Not only this, the company has been growing at around 30% over the last four years-an achievement not many companies can boast of in the networking, hardware, and software space.

The company credentials are impressive. In terms of customers, IBM India can boast of around 3,000 customers. It is also the biggest MNC software exporter in the country. IBM manages more than 250,000 sq ft of data center for more than fifty-five clients. It also helps more than fifteen state governments to drive e-Governance related projects in their states. It has also helped more than 100 plus clients prepare their business continuity processes and disaster recovery systems. All this has resulted in 38% growth in employee base from 38,500 employees in 2005 to 53,000 employees in December 2006.

Sensing India opportunity, Samuel J Palmisano, chairman and CEO, IBM, on his India visit in 2006 says, "We will triple our investment in India from $2 bn invested in the last three years to nearly $6 bn in the next three years. This investment will ensure that we make the most of the opportunities to grow this marketplace, while it also enables IBM to fulfill its vision to become a globally integrated company."

The First Step
Number one in hardware and software space, the company had to increase its foothold in the services space. This too happened with two acquisitions. The first was Daksh eServices acquisition in April 2004, which helped IBM to enhance its ability to deliver CRM and back office services to its clients in key verticals like banking, insurance, retail, technology, telecommunications, and travel and transportation. In addition, this initiative will increase the scope of its business transformation delivery centers. Presently, IBM Daksh has over 20,000 employees and has over 200% growth in the last three years. The company is servicing 200 processes at sixteen delivery centers spread across seven cities.

The second was the acquisition of Network Solutions by IBM in November 2005, which enabled IBM to augment its networking and managed services portfolio of offerings in India, and broaden its reach across the country. It also helped IBM to consolidate its leadership in the Indian domestic services market by strengthening its service capabilities in the enterprise and mid-market business segment.

Apart from this, the first of its kind model in the world called the "On Demand Model" or "Risk Reward Model" got prominence, thanks to IBM's willingness to share risk and opportunity with Bharti Airtel. As part of the agreement, IBM was asked to deliver IT to Bharti as a service-and not as a product or solution-and was paid certain percentage of Bharti's revenue.

On March 26, 2004, Bharti signed a 10-year agreement with IBM to consolidate, transform, and manage comprehensive infrastructure and applications, joint development of marketing IT and telecom solutions and services for India, and to be the preferred supplier of telecom services to IBM India. Since then IBM has been focusing on IT and back office business processes, while Bharti has been focusing on aggressive marketing. All this has resulted in Bharti Airtel increasing its base from 6 mn to 42.7 mn.

IBM worked on parameters like: customer-facing interfaces, thereby helping customers manage their accounts, view bills, make and track service requests, register complaints, and more through multiple channels, like the Web, phone and text messaging; predicting customer needs by building business intelligence to the tune of 7 Tb and over 250 mn call data records (CDR) per day; billing and mediation helped in integrating key business functions like marketing, speeding up new product development and rollout; and intelligent network monitoring, which monitors networks for issues even before they might occur.

The company has increased its trust in IBM by expanding its outsourcing relationship with additional $100 mn to incorporate next generation servie delivery platform, which will enable Bharti to offer VAS to its customers and open up new business opportunity in terms of innovative content and video services. IBM is also working with Bharti to develop capabilities to implement number portability and carrier access code as and when these services are being allowed in India.