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A Power-Full Mosaic

IBM Continues to See Growth in Key Geographies


Illustration by Brian Hubble

Of the several global economies with the potential to grow at above-average rates over the next 10 years, India, China, Taiwan, and the Middle East and Africa (MEA) stand out. These countries expect to demonstrate continued rapid growth, and IBM and Power Systems* technologies are right in the thick of it.

While the UNIX*/AIX* market tends to be the focus in growth markets, IBM i and Linux* can’t be overlooked. IBM has a strong presence in growth markets and Linux is becoming one of the most sought-after solutions as well. Power Systems servers have a strong lead with the capability to run all three operating systems simultaneously and such cross-operating system advantages as PowerVM* virtualization, PowerHA* for high availability, and PowerSC* for security and compliance.

Amid these growth-market countries, several themes recur—perceived value, market integration and growth strategies.

 

India

IBM has perhaps the best reputation in India among the growth markets and is a widely recognized brand there. Viewed as one of the top multinational companies, IBM is seen as a good corporate citizen and an excellent employer. According to Mickey Purohit, director of development expansion and transformation for the IBM Systems and Technology Group (STG), clients in India trust the brand, and a good ROI has helped Power Systems become the platform of choice.

Purohit claims all IBM business segments in India have been growing throughout the recent economic challenges, however, not at the rate seen before the downturn. He says it’s because Indian clients are savvy; their main concern is buying for value, not price—and Power Systems technology is successful because of the value, reliability and optimized integration it provides.

“Indian clients depend on vendors to provide the latest and greatest products. They want the newest technologies, and consumption is higher and faster than in stable markets,” Purohit says. “Clients want their new technology purchases into production as quickly as possible because they want a fast return on their investment.”

Globalization and consolidation of older servers and less efficient servers (such as x86) into fewer servers helps reduce clients’ operating expenses. Energy is one of the biggest expenses for clients in India, and because the Power* platform is efficient, it offers low energy requirements and low cooling costs in data centers. The country’s rising land prices also favor the Power Systems platform. There, 70 percent of a building’s cost is land, says Purohit, and huge, sprawling data centers aren’t generally viable. These clients value the opportunity to consolidate large numbers of servers and reduce their enterprise’s footprint. Fewer, more efficient servers often have the added benefit of reducing software licenses, further increasing Power Systems appeal.

“Indian clients are looking to reduce their costs but that doesn’t mean they want any old thing off the shelf,” Purohit says. “They buy for value and scalability. They are investing for growth and they want an integrated system, with hardware and software up and running quickly. They don’t want to use multiple products from multiple vendors. IT is not their core business, they want an end-to-end system and someone to stand by them if they have issues or problems.”

 

“The government wants everyone to have a bank account, and many of India’s 1.3 billion people have never been exposed to the benefits banks provide.” —Mickey Purohit, director of development expansion and transformation, IBM STG

Built with advanced computing, virtualization and security, the Power platform is widely used for weather forecasting in India, replacing 90 percent of a competitor’s hardware. The Ministry of Earth Sciences, similar to the U.S.’s National Oceanic and Atmospheric Administration, performs weather, earthquake and ocean predictions. In fact, all five of the ministry’s centers use Power Systems technology.

Opportunities for Power Systems business growth continues to expand in India. As clients grow their business, demand also grows for scalable infrastructure so they can seamlessly evolve from a small business into a large enterprise. Purohit adds, “IBM is investing in Power technology and coming up with better products in both the traditionally x86 market and the non-x86 market compared to competitors.”

In India’s non-x86/UNIX* category, Power Systems servers have a leading 39 percent market share, mostly due to the banking and telecom sectors, which have been key engines for growth. The telecom industry was expected to grow 14.6 percent in 2011 and 9.1 percent in 2012. Telecom subscribers in India numbered 846 million in 2011.

Banking still has room to grow as the Indian government pushes for financial inclusion for bank branches in all hamlets of 50,000 people or more, Purohit says. “The government wants everyone to have a bank account, and many of India’s 1.3 billion people have never been exposed to the benefits banks provide.”

China

IBM has a broad investment strategy in China, the world's largest growth market. Power Systems technology has a strong leadership position in the server market in China, as well as a strong business presence with IBM i clients, especially in key markets like banking and financial services. Not only is IBM well established in the three largest business markets in China—centered in Shanghai, Beijing and GuangZhou—but it also has more than 30 regional offices serving growing cities around the country as part of its geo-expansion strategy, a key element of IBM’s 2015 earnings roadmap.

  IBM has software development labs and Lab Services teams in Shanghai and Beijing, with skills in a wide range of Power Systems products, including IBM Systems Director. The Beijing development lab is the sister lab and partner with IBM Rochester, Minn., with responsibility for many of the components of the IBM i operating system.

Tom Brandes is a freelance writer for variety of subjects, including technology, healthcare, manufacturing, sustainability and more.



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