IBM's Palmisano visits India

Big Blue may move more work to its Indian subsidiary

IBM's chief executive officer and chairman of the board, Samuel Palmisano, made a low-key visit Monday to Bangalore, India, where the company's Indian subsidiary is based. This is the first visit by a chief executive of IBM to India and comes in the wake of recent trips to India by Microsoft Chairman and Chief Software Architect Bill Gates and Sun Microsystems CEO Scott McNealy.

However, whereas the visits by Gates and McNealy were high-profile events, Palmisano did not make a public appearance, declining to meet the media. Apart from courtesy visits to government officials and corporate customers, Palmisano spent most of the day briefing local company employees on IBM's plans.

IBM has a research and development (R&D) laboratory in India as well as a software development center with about 4,500 employees, and it does work for both IBM and the company's customers worldwide. The company also is setting up a business process outsourcing (BPO) center in Bangalore that will offer services to IBM customers worldwide.

The size of both the software development and the R&D operations are expected to be increased significantly over the next three years as IBM shifts work from its locations in the U.S. to India, which offers the advantage of low-cost engineering talent, said company sources on condition of anonymity.

Palmisano's key objective while in Bangalore will be to assess the progress of the company's strategy to outsource software development and BPO to its Indian operation, according to analysts. As outsourcing to India has become a politically sensitive issue in the U.S., with U.S. companies accused of moving jobs from the U.S. to India during a recession, Palmisano may have decided not to discuss his plans for IBM's Indian operation with the media, the analysts added.

Copyright © 2003 IDG Communications, Inc.

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