IBM expects $1 billion in India revenue this year

Big Blue expands in region as staff availablity gets tighter and salaries higher

IBM expects about $1 billion in revenue from India, as the company's hardware and services business in the local market soars.

The company made $700 million in revenue from India last year, said a company spokesman Monday. In the first three quarters of this year, the company posted revenue growth of 39 percent over the previous year. "At the current growth rates, we expect revenue of $1 billion for the year," the spokesman added.

Unlike Indian outsourcers who have mainly focused on more lucrative contracts abroad, multinational services companies like IBM have focused on the growing Indian outsourcing market.

IBM India's contribution to IBM's global revenue is higher if the revenues from services delivered from India to global customers are also included. These are higher than domestic revenue and growing faster, said the IBM spokesman who did not give exact figures. This is, however, included in the revenue of the country in which the services have been contracted, and are not reflected in IBM's India revenues, he added.

India is a key hub for the global delivery of services by IBM, as the company takes advantage of the country's large pool of skilled manpower.

Reports, including in The Wall Street Journal, quoted an IBM official in the United States as saying that the company has increased its staff in India to 73,000 this year. The IBM India spokesman was unable to confirm this data immediately, but he confirmed that the company had 53,000 staff in the country at the end of last year.

Although the company does not break down the number of staff it has in offshore software development and services in India, most of the new additions are likely to have been made in the company's outsourcing operations based in India, with the rest of the additions in sales and marketing.

The expansion by IBM in India comes even as staff availability there has gotten tighter and salaries are on the increase. India is still attractive to foreign companies to set up software development and services subsidiaries or outsource work, as salaries are still competitive and the talent pool is large, said Siddharth Pai, a partner at outsourcing consultancy firm Technology Partners International Inc (TPI) in Houston, in an interview last month.

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