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IBM Eyes 50,000-Plus Indian Employees

Posted by Paul McDougall
March 13, 2006

Tags: global outsourcing, offshore outsourcing, offshoring, Data Networking & Management, Hardware and Infrastructure, IBM outsources to India, Offshore outsourcing, Other, Outsourcing, Services and Outsourcing

Channel: Other, Networking & Mgmt

Meet the new face of IBM software. Siddharth Purohit lives in Bangalore, India, and is an expert at developing the kind of reusable code on which the company is staking much of its future. As such, Purohit represents two of IBM's biggest bets--Indian talent and software built around service-oriented architectures.

IBM is on a hiring binge in India. The company employs about 39,000 people in the country, up 70% from 23,000 a year ago. That rate of growth should continue "for quite some time," says Amitabh Ray, who heads IBM's global delivery operations in India. At that clip, IBM will have at least 55,000 workers in India by next year. And the figure could easily pass 60,000--or 20% of its current worldwide workforce of 300,000.

Jeby Cherian, part of a new world order at IBM

Make no mistake: This isn't the kind of routine, brute-force coding for which India is known. IBM last week revealed it would spend $200 million a year on a Bangalore development center to centralize work on one of its most strategic efforts--building SOA-based software systems that consultants can resell to customers in various industries. "We're moving all of that development to India," says Jeby Cherian, head of IBM's new Global Solutions Delivery Center in Bangalore. Previously, IBM did this work in a number of development centers worldwide.

Along with churning out software components, workers at the Bangalore center will design new ways in which businesses can combine those components with other technologies to solve some of their thorniest, and costliest, problems: straight-through processing for banks, for example, and inventory optimization systems. That's hardly commodity work.

The SOA Bet
IBM needs growth. Its software sales were flat last quarter, and its global services business was down 5%. Software based on SOA is one of its big growth bets. It plans to invest $1 billion this year around SOAs, which let companies reorganize IT infrastructures around processes. Software to "check shipping status" exists as a reusable component, one of many that can be mixed and matched to create, say, an online inventory management system. SOAs are all the rage because they're easier to maintain and update, and because they offer a way to Web-enable processes with less custom programming. Most companies using SOAs spend less than $1 million annually on the technology, but 60% of them will increase spending by an average of 17% this year, AMR Research predicts.

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