India displaces the US as home of IBM's largest workforce

04 January 2018 3 min. read

US-based technology firm IBM has been rapidly expanding its base in India over the last few years. Having begun as an offshoring center for cost-effective labour, the country has now grown into one of the main tech hubs for the firm, currently hosting more IBM employees than the US itself.

Founded in 1911, IBM is an American technology company that provides services across hardware, middleware and software domains, delving extensively into consulting services as well. The firm brought its operations to India in 1951, opening offices in Mumbai and Delhi initially. Now, IBM operates across the country, with offices in Bangalore, Pune, Kolkata, Hyderabad, and Chennai

IBM arrived primarily to capitalise on the expansive labour market in India, which consists of technologically skilled, English-speaking professionals. Using this as a resource, IBM has grown into one of the biggest technological firms worldwide. As elucidated by an economist at the University of Massachusets, “IBM would be a totally different company if it wasn’t for India.”

Outsourcing to India is not unique to IBM. However, the firm’s employee-count in the country has doubled since 2007 to 130,000, making it the only multinational corporation to have a bigger labour force in a single foreign country than it does in its home country. Currently, the firm operates with less than 100,000 employees in the US as per the latest estimates.

IBM Office India

Over the years, the firm’s India outfit has grown into its full potential of core activities, including software development and consulting. In line with global trends, the firm has also expanded its cloud-based operations in the country, particularly since last year when it acquired a local cloud migration solutions provider by the name of Sanovi Technologies.

As the country has grown into an integral part of IBM’s success, India has increasingly become a major center for business. After a 15-year hiatus from India, the firm returned in 1993 through a collaborative venture with Tata. In years to come, the firm broke off from the collaboration, and opened a research lab in the country, signifying intent to upscale operations.

In 2004, the firm signed a $750 million (Rs. 480 crore) agreement with Bharti Airtel, a major telecom service provider in India. In addition, IBM has been a major player in the consulting industry in India, having helped major firms such as AT&T and Airbus with technological process management.

Moreover, the firm is hoping to capitalise on the India’s enormous, and increasingly tech-savvy, rural population. Examples of this are experiments being run by IBM to generate profits from small loans, thereby creating incentives for banks to move to rural areas. Additionally, the firm has also been experimenting with video-based medical consultations in rural areas that lack medical access.

In recent times, India has grown into more than just a business center for IBM, increasingly assuming the character of a research and innovation hub. For example, the firm is currently experimenting with a search engine tool that allows running searches with images rather than just characters. One application of the system has already been tested in the fashion industry, allowing designers to dodge the possibility of a copied design by scanning the existing database.