Organizations in growth markets across Asia have not traditionally been heavy consumers of outsourcing services. Having lots of on-premises hardware still carries some prestige for local CIOs, particularly in China and India. The availability of relatively inexpensive IT staff in local markets has also helped them deliver acceptable service levels to the business. Until now, that is. The combination of quickly rising IT salaries, increased competition from regional and even global expansion, and growing demands among business stakeholders to more effectively engage customers has put pressure on CIOs to increase the performance of their organizations.
More and more CIOs I speak with are struggling with how best to effectively transform their IT capabilities and meet fast-changing business requirements. In particular, whether to embark on this transformation journey alone or leverage outsourcing partners. In a recent report, I profiled organizations in Asia that are leveraging external service providers to accelerate their IT maturation. One example is a manufacturer with 10,000 employees and operations across Asia that outsourced its entire IT infrastructure environment to improve and homogenize service levels. Another is a large Indian bank that outsourced its entire IT department to a service provider and improved its maturity level from a 3 (on a scale from 1 to 10) to a 6 in less than a year.
Last month, I attended an IBM Systems and Technology Group (STG) Executive Summit in the US, where IBM outlined its key strategies for accelerating sales in growth markets, including:
· Aggressively marketing PureSystems. IBM is positioning PureSystems (a pre-integrated, converged system of servers, storage, and networking technology with automated self-management and built-in SmartCloud technology) as an integrated and simplified data center offering to help organizations reduce the money and time they spend on the management and administration of servers.
· Continuing to expand in “tier two” cities. Over the next 12 months, IBM plans to continue its expansion outside of major metropolitan areas by opening small branches in nearly 100 locations in growth markets, most notably India, China, Brazil, and Russia.
· Expanding channel capabilities and accelerating new routes to market. IBMplans to certify 2,800 global resellers on PureSystems in 2013 and upgrade the solution and technical expertise of 500 of its partners. Also, the company plans to drive the revenue of managed service providers (MSPs) by working with them closely to develop cloud-based services and solutions on PureSystems.
Considering the vast potential demand from growth markets and slowdown in developed markets, IBM is among the growing camp of multinational vendors aggressively targeting them as an engine for future business. Some of my key observations on IBMs event and recent announcements: