"We are redefining IBM for the future. In doing so, we are creating two market leading companies...I'm very proud of the footprint we have in India, which will continue...We will have two entities in India at the end of this, not one, but that is going to take a year to play out. And I would expect that people will find a place in one or the other," Krishna told reporters on a call.
The first company, IBM, would focus on hybrid cloud and artificial intelligence, allowing it to tap into the trillion dollar total addressable market (TAM) as created by hybrid cloud, he said.
The second company will be a managed infrastructure services company, which will focus on service delivery excellence and automation that has a total addressable market of USD 500 billion.
"We do believe this will unlock growth for both and will return IBM to sustainable mid-single digit growth in the medium term," he added.
Asked about the impact on India operations, Krishna said IBM is a globally integrated company and there are many services that are delivered from India and other centres concurrently.
"Close to a 100 per cent of our clients get touched by our infrastructure managed services employee centred competencies, practices in India...I'm going to guess maybe about a fourth or third of our employees (in India) would be part of the new company," he said.
IBM had around 383,000 employees at the end of 2019. While the company does not provide country-specific headcount, India is estimated to have well over 100,000 employees.
Krishna did not comment on which of the two units IBM India and South Asia Managing Director Sandip Patel would join.
He said together with its partners (including Tech Mahindra), IBM will tap into the the opportunity of digitisation and cloud transformation.
He noted that the business opportunity for IBM is USD 1 trillion of TAM that is roughly split as USD 350 billion of services, USD 450 billion of software or platform as a service, and about USD 230 billion on infrastructure.
"As our business expands and services, I fully expect there to be opportunity for employment, promotion, skills, interaction with universities, and all of that. We are very proud of our ability to be able to hire so many talented people in India, and that I expect will grow in proportion to the service opportunity," he said when asked about the opportunity in the Indian market.
He noted that IBM has a very large R&D presence in India as well.
"...as our opportunity begins to grow in the next part on the software piece, then I expect there to be opportunity for our people in India in both employment skills, growth as well as taking those skills back into the local market...Third, on infrastructure, that may be less direct but there is a lot of support that goes on infrastructure also and a lot of our teams there are based out of India," he said.
According to IBM, the new company will entirely focus on managing and modernising client-owned infrastructures, a USD 500 billion market opportunity.
It will leverage IBM's expertise to offer hosting and network services, services management, infrastructure modernisation, and migrating and managing multi-cloud environments that are critical services, core to client operations.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.