14 DAY TRIAL // India has become more and more appealing for big hardware and software corporations that raced in setting development, research or manufacturing units on Indian territory. AMD has recently opened a new research and development engineering facility in Bangalore, while IBM got quite a piece of revenue from the Indian market. India is a key position for the company, as it has a great amount of skilled engineers willing to work for foreign companies.
According to company's spokespersons, IBM made $700 million in revenue from India last year and the company's expectations for 2007 are even bigger. The first three quarters of this year have proven extremely successful for the hardware manufacturer and reflected in a 39 percent growth as compared to the previous year. "At the current growth rates, we expect revenue of $1 billion for the year", the spokesman added.
While other Indian outsourcers had the lucrative contracts aspect in mind, IBM considered the Indian outsourcing market. The income from the Indian IBM subsidiary easily beats the $ 1 billion estimations if analysts include services delivered from India to global customers. According to IBM reports, this type of services brings greater income than the US-based subsidiary, but the company refused to disclose the exact figures.
The Wall Street Journal reported that IBM India has increased the number of employees to 73,000 during this year, which means that one in five IBM employees is Indian. At the end of the previous year, there were only 53,000 staff members in the Indian research and development facilities.
IBM has invested in India even after the competition on the Indian labor market got higher and the salary expectations dramatically increased. According to Siddharth Pai, a partner at outsourcing consultancy firm Technology Partners International Inc (TPI) in Houston, India is continuing to lure foreign investors into setting up software development and services subsidiaries because the salaries are "still competitive and the talent pool is large".