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Last Updated : Sep 04, 2014 08:22 PM IST | Source: CNBC-TV18

IBM bets big on India, excited about 'smart cities' project

The company is also seeing a strong revival in the telecom sector and expects clients to start investing. IBM is also on the lookout for acquisitions to build capabilities.

Global technology giant IBM is betting big on India. Speaking to CNBC-TV18’s Sheeren Bhan, its India MD Vanitha Narayanan said the company is excited about the new government’s ‘smart cities’ project.

The company is also seeing a strong revival in the telecom sector and expects clients to start investing. IBM is also on the lookout for acquisitions to build capabilities.

Below is the transcript of Vanitha Narayanan’s interview with CNBC-TV18’s Shereen Bhan.


Q: Let me start by asking you how confident you are feeling about the India growth story. We have gone through a couple of years. Two – two and half years of pain; the Indian economy is just about beginning to start to see green shoots, how confident do you feel?

Vanitha Narayanan
Vanitha Narayanan
MD|IBM, India

    A: Very optimistic. There is a level of confidence about both government actions and also policy actions which are now a bunch of private sector actions to occur. So overall I would say confident mood and whether you look at whether it’s smarter cities, growth of small enterprises leveraging new technologies or large private clients who have sort of held investments back in and are now ready to go ahead and commit.

    Q: Are you beginning to see that already, are clients now putting money on the table because our sense is that while the mood has changed people are not beginning to make investments just yet?

    A: I would say probably you can extend it, but we are also seeing it in smaller areas. So definitely I would say in the last quarter, more positive than we have seen in the prior quarters. Some of the big decisions and some of the big investments, yes, we probably have to see a little more time go by but there is movement in terms of proposals. This is the key transformation, this is the key step change, this is something we need to. So we will step in back and revisit those because they can see that this is now going to be a time to act.

    Q: Are you seeing this across sectors, across industries or is it specific to a few sectors; telecom for instance is a sector which is seeing a recovery not just from a fundamental point of view but also from a stock market valuation point of view. Stocks are up almost 10 percent for this particular week. You have extended your partnership with Bharti Airtel. Is telecom looking much better than the last two years?

    A: Yes, one; as you said the clients of the telecom industry, the players in the telecom industry have seen some level of revenue stability, rate stability and they are all now looking at how they get ready for a digital era and a mobile data era. So it is about building their capabilities to serve in a very mobile data world which again, when you look at the different services, it goes across segments, across industries because this is about building and delivering capability in a very client-centric way. So from our perspective as well, I see all of these clients, whether it is use of analytics, use of their own front office, digitisation, building capabilities around services, they are all at the back of the green board.

    Q: Now that Bharti know you will confirm the value of that particular deal and the terms of your extension, but what is the deal pipeline looking like for you, for those kinds of deals in India at this point in time?

    A: Our view and our experience with our clients now is the kind of deals that we will see will evolve, will change because these will not be very long term, large, single, monolithic solutions, they will have a set of capabilities that are going to drive some very specific indicators for that client, whether it is revenue, customer acquisition, customer experience, cost containment, a variety of things. There are still very good transformation, and this is what is exciting to me, whether they are large clients or small clients the level of innovative capability that we are seeing in this engagement is very high.

    Q: These five-year, ten-year deals, you don’t believe that that scenario is going to play out any longer?

    A: Those are still five-year, seven-year, ten-year, don’t get me wrong. The people are still - because you still have to plan for the long horizon and there are clients who are doing that but within that it is not going to be one thing that drives the seven-year relationship, it is will be many things and many capabilities that will get embedded in those longer relationships because of the pace at which the market is changing, the industries are changing and frankly the possibilities of capabilities that people like us are bringing to the table.

    Q: I know you are a telecom veteran, that has been the sector you have been involved with for over two decades but besides telecom, what else is looking exciting from an IBM opportunity point of view in India?

    A: We talked about telecom. I would say financial services. What is interesting to me again is financial services and the scaling of financial services to a huge segment of the market. Again, this is where we are looking at innovation whether it is an innovation on how your credits score, innovation on how you validate the clients because this is a segment of clients who have never been in traditional databases before.

    Smarter cities, we were maybe a little early at the game. Six years ago is when we invited the world and said, let us build the smarter planet and since then we have had thousands of engagements both commercial around the world as well as with government cities and also some of the non-profit work that we do from the IBM Foundation with cities and we have done some of those in India as well.

    First Published on Sep 3, 2014 10:26 pm