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‘We are really very bullish about the India market across sectors’
In an exclusive interview with BW Businessworld, Karan Bajwa as Managing Director of IBM India talks about IBM’s India strategy and how they plan to stay ahead of the race, especially in the cloud and cognitive space.
In January this year, IBM appointed Karan Bajwa as Managing Director of IBM India, succeeding Vanitha Narayana who had been appointed as Chairman. Bajwa’s mandate was to lead the team to win newbusinesses, shape market opportunities by building alliances and partnerships, and solidify the company’s position in the marketplace. He is also responsible for IBM’s partnership with clients for a cloud- and cognitive-led digital transformation of their businesses. In an exclusive interview with BWBusinessworld, Bajwa talks about IBM’s India strategy and how they plan to stay ahead of the race, especially in the cloud and cognitive space. Edited excerpts:
Q. It’s been about 4 months since you took charge as the India head. What’s your own assessment in terms of what you planned and what you have achieved so far?
My vision is to make IBM the preferred digital transformation partner for our clients. As we continue to transform and bring to the fore the 'New IBM', my vision is to give clear shape and form to that ‘New IBM’. In a nutshell, today IBM is a cloud first and cognitive solutions company. IBM is a company that makes the digital transformation as an aspiration come alive for our customers. It is a company that cares for and embraces the ecosystem. It is a company that differentiates with technology, and yet has deep industry competence.
Simply put, I would say that the plan for IBM is to mainstream cloud, SaaS, cognitive and embrace the ecosystem. It is to establish technology leadership in security and blockchain. It is to expand the market and acquire new customers, and really be relevant to the SMB market, as well as transform the ISV ecosystem. When I say, ‘new customers’, it is also about being committed to addressing the needs of small to mid-sized customers. With cloud and software-as-a-service, this is possible and we will also continue our focus on enabling independent software vendors and channel partners (both the reseller channel partners and specialised partners).
Q. Globally, IBM has seen 19 consecutive quarters of declining sales. Does that worry you? IBM is seen doing a lot of internal re-structuring to cut the flab and set things right. What’s happening in India? What's the big change?
IBM is unique. It is the only company that has reinvented itself through multiple technology eras and economic cycles. Today IBM is much more than a ‘hardware, software and services company’. IBM today is a cognitive solutions and cloud platform company. Understanding IBM requires a longer view—in particular, remembering why we embarked on this journey of transformation. One thing that has always kept us ahead is, we never feared to disrupt ourselves. It has nothing to do with economic downturn or fixing something broken. Rather, our experience over more than a century has trained us to be vigilant. We began to see that the IT industry would radically reorder, driven by the deluge of data, the emergence of cloud computing and AI. We were convinced that the source of value for our clients would shift and that the convergence of these innovations would usher in a new era in both technology and business. This is really where IBM is focused. In the traditional IT industry, we continue to grow our share but it is the cloud and cognitive piece that will drive this fundamental transformation and the growth.
If you see our Q1 (2017) results, our strategic imperatives together generated nearly $34 billion in revenue, and now represent 42 per cent of our total revenue and grew 13 per cent Y-o-Y. With over $14.5 billion in cloud revenue over the last 12 months we are the global leader in enterprise cloud. These are positive signs of the shifts happening. So, while our transformation continues, a strong foundation is now in place. India is a very strong market for us. It has been called out in prior quarters and in this quarter as well as a growth market. We are really very bullish about the India market across sectors, not just one sector.
Q. Despite the overall revenue declining, IBM's so-called strategic imperatives including cloud and cognitive seems to be doing well? How do you see India contributing to the growth?
Cloud and SaaS is the first fundamental shift in our business. Our selling will be cloud first, our solution will be cloud first, our delivery will be cloud first, and that’s the journey we have set ourselves on. That’s the first imperative that is mainstreaming across the organisation, irrespective of whether you are in the systems, software, infrastructure or business consulting business, the conversation is cloud first. The second piece is cognitive. People have seen the early signs of success here. Our aim this year is to make sure that we have established industry specific used cases for cognitive with significant business impact. The work on cognitive in healthcare with Manipal Hospitals is now live. The work with cognitive in fashion with Aditya Birla is now live and the same in retail with Titan. We are setting these use cases by industry. The real business impact will happen when each organisation applies cognitive to whatever data they have to whatever used case that they can think of, to drive business impact. That’s our goal this year. The third very important thing for the company is embracing the ecosystem. The clear realisation is that we are now on a stage where the combined power of the ecosystem is way more than us individually trying to do something.
Q. What about your focus on security and other emerging technologies?
IBM is in a unique position of having the best technology solutions for security. The market leadership position around the different categories of products is very well established. We have spent almost $200 million over the last year itself in terms of investing into the security business across the world. We launched a SOC in India last year, to enhance the availability to our customers to manage security services changes and also provide a concentrated approach to security.
The other area where we have established leadership is on an emerging trend - blockchain. Blockchain, they say, could be to transaction about the internet vs the information. That’s how it is being viewed. IBM’s blockchain leadership has been established both in terms of the platforms and the used cases. In fact, we recently announced closing over 40 blockchain use cases globally.
Q. You have recently hired a chief digital officer. What’s the game plan like?
Nipun Mehrotra was appointed in 2017 as IBM’s chief digital officer (CDO) for India/South Asia and the business head of the newly formed “Digital Business Group (DBG)” to help transform the way IBM engages and partners with the burgeoning tech ecosystem comprising of startups, academia, developers, and investors. Nipun and his team will be at the forefront of leading IBM’s customers in their digital transformation journey in collaboration with the ecosystem. This is one of the first IBM CDO positions in a market geography, reflective of India’s importance in the tech ecosystem. DBG has specialised deep skills in data sciences, AI / cognitive technologies; builds new business models and partnerships (eg: IBM Garage) to integrate the innovation priorities of clients, ecosystem & IBM in fintech, retail/fashion, education, health.
Q. There have been reports that IBM is planning to downsize its workforce by around 5,000 employees this year. Is that right? If yes, in which areas and functions would they be from?
I would not react to any unconfirmed news. This is just speculation. We are still growing and we will continue to invest in our strategic priorities that I outlined earlier for the region.
Q. AI-based technologies such as Watson will make several jobs redundant but at the same time, newer jobs are likely to be created. The point is, are the people well skilled to take up the new roles? Is IBM doing anything to help in the required re-skilling?
The Indian IT industry was initially built around cost and then skills arbitrage. This is a great opportunity for the industry to re-skill itself around new skills such as cloud and artificial intelligence. If we do not leverage it, we will lose the edge that we have as a country. Things are getting commoditised very fast, so it’s important to continuously reinvent yourself. India was the inventor of the BPO model and look where we are today. We have moved on to do high-value work. India almost has the responsibility in the industry to acquire the new skills.
As an organisation, we have set up a goal to deploy at least 100,000 Watson certifications to create that capability. These are really bold goals. We established these goals to make sure that we are disseminating this knowledge. It is not the revenue number through which we will get this value. The vision is to make sure that we are giving people access to technology. Similarly, we are doing a lot of work in partnership with educational institutions/universities to impart core cloud and cognitive skills as a part of their curriculum.
Q. With a lot of innovation coming from new-age startups these days, have you engaged with them in some way like having an incubation program?
We have a program called the Global Entrepreneurship Program (GEP Program) which provides business mentoring, technical support, networking opportunities with enterprise clients and credits to help entrepreneurs build their applications on cloud. Currently, 1200 startups are on this program. With their disruptive technologies, innovative entrepreneurs can play a major role in changing the way the world works. That's why we are looking to team with entrepreneurs to address new market opportunities, combining startup innovations and disruptive technologies with IBM's infrastructure, software, experience, and reach to bring world-class solutions to market.
Q. IBM has recently signed an agreement with Salesforce to offer joint AI solutions - Watson with Einstein. Do you see India playing a role here?
IBM and Salesforce recently announced a global strategic partnership to deliver joint solutions designed to leverage artificial intelligence and enable companies to make smarter decisions, faster than ever before. With the partnership, IBM Watson, the leading AI platform for business, and Salesforce Einstein, AI that powers the world’s #1 CRM, will seamlessly connect to enable an entirely new level of intelligent customer engagement across sales, service, marketing, commerce and more. IBM is also strategically investing in its Global Business Services capabilities for Salesforce with a new practice to help clients rapidly deploy the combined IBM Watson and Salesforce Einstein capabilities. This practice has already been set up in India and is committed to creating world-class solutions leveraging the power of Salesforce -- producing memorable customer, prospects, and employee experiences.