Strategy

India: Tale of Two Strategies

IBM announces major new investment; Apple scraps plans for a call center.
Stephen TaubJune 6, 2006

Two major technology companies are taking distinctly different approaches to India.

IBM announced that it expects to nearly triple its investment in the country over the next three years, to $6 billion, primarily in services, research, and software operations.

Speaking before 10,000 employees gathered in Bangalore and via satellite to thousands of other employees in four more cities, chief executive officer Samuel Palmisano asserted, “India and other emerging economies are an increasingly important part of IBM’s global success,” according to a press release.

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“If you are not here in India, making the right investments and finding and developing the best employees and business partners, then you won’t be able to combine the skills and expertise here with skills and expertise from around the world, in ways that can help our clients be successful,” said Palmisano. “That investment will ensure that we make the most of the opportunities to grow this marketplace, while it also enables IBM to fulfill its vision to become a globally integrated company.”

Bloomberg pointed out that other major tech companies with significant commitments to India include Microsoft and Dell, as well as banking giant JPMorgan Chase. “India’s become not just an important or crucial part, it’s become an absolutely essential part of their global delivery chain,” Kiran Karnik, president of India’s National Association of Software and Services Companies, told the wire service.

It seems, however, that not everyone agrees.

Apple Computer has scrapped its plans to open a customer call center on the subcontinent, according to several published accounts.

Earlier this year, reported the Associated Press, Apple announced plans to open a support center in Bangalore and had hired dozens of people for a staff that was expected to eventually top 600 employees. However, the company has laid off all the employees, according to the wire service, citing media reports in India.

“We have re-evaluated our plans and have decided to put our planned support center growth in other countries,” a spokesman told the AP without offering further details.

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