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IBM may rival India's top offshore IT firms in head count

Company adds autonomic computing center in Bangalore as part of $6B investment plan

April 4, 2007 12:00 PM ET

Computerworld - IBM this week said it has added about 35 developers and engineers who will work on autonomic computing technologies to its India Software Laboratory operation. That barely amounts to a ripple among the 53,000 employees IBM now has in India -- a total that represents 15% of its global workforce of 356,000 people. But it's another indication of India's growing importance to IBM.

Development of autonomic technologies, which are designed to enable systems to manage and heal themselves, is done at various IBM research facilities worldwide. The company said the staffers at the new Autonomic Computing Technology Center in Bangalore, India, will work closely with its software development labs in North Carolina and Toronto and with its India research lab, which has facilities in Bangalore and New Delhi.

Most of the developers hired to work at the autonomic computing center hold advanced university degrees, according to IBM. "They have the skills to really take this on," said Catherine Pleil, program director for service management at Tivoli Software, IBM's management tools unit.

The India Software Laboratory has a total of 3,200 employees in five cities. Overall, IBM eventually may surpass India's homegrown IT services firms in head count and become the largest IT employer in the country, said Atul Vashistha, CEO of NeoIT Inc., an outsourcing consultancy in San Ramon, Calif. He said he thinks IBM will increase its workforce in India at a rate of 20% to 25% annually for the next four to five years.

Samuel Palmisano, IBM's chairman and CEO, traveled to India last June to announce a planned investment of $6 billion over the next three years in the country. At the time, IBM had 43,000 employees on its India payroll, a number that has since been increased by more than 23%.

Vashistha said IBM has no choice but to expand in India because the major offshore services firms based there -- Tata Consultancy Services Ltd. (TCS), Infosys Technologies Ltd. and Wipro Ltd. -- "have reached the mass where they are now directly competing with IBM."

The India-based companies are also adding employees at a double-digit pace annually. According to their most recent financial filings, TCS has 83,500 employees, Infosys is at 69,500, and Wipro has 66,200. Other large firms offshore firms in India include HCL Technologies Ltd. with 38,317 workers, and Satyam Computer Services Ltd., which has 34,400 employees. Not all of those employees are in India, though. TCS, Infosys and the other firms are expanding their operations worldwide.

David Tapper, an analyst at IDC in Framingham, Mass., said the expansion of IBM's labor pool in India is being driven by general business growth. But part of IBM's motive is that company executives "want to build a base in the emerging markets because they do see them as the next generation of revenue," Tapper said. "I think they are looking at the long term, for the next 10 to 20 years."

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