We are going 20 percent cheaper than Oracle

IBM is growing at twice the market rate in India. As per IDC estimates,
the information management and business analytics market in India is growing at
16-18 percent and the company is growing at well over 30 percent in the country

What are some of your plans for the channel community in this space?

In the past three years, we have spent around $12 billion on acquisitions
like Cognos for business intelligence, Optim for database compression, SPSS for
statistical analysis and Guardium for database security to name a few. What this
has enabled is that we now have an expanded business software solutions
portfolio. So the first thing we have been doing is to give our partners access
to these additional products to sell along with their existing basket of
solutions. This helps them address a more holistic solution need from a customer
perspective and thereby add value for various parameters across the spectrum.

Secondly, a lot of our pure hardware partners are struggling with just
dealing in that arena and are looking to move into the software solutions space.
To meet this desire, we have a set of products under the analytics portfolio.
For example we have the ISAS (IBM Smart Analytics Systems) box which comes with
pre-configured software so that the partners do not have to configure the
software in the box themselves. This gives them an opportunity to make that
crossover to the software solutions range as well as earn extra margin on
selling the solution. We are only employing our value-added reseller network for
the ISAS portfolio and this helps us protect partner margins.

Thirdly, last October we launched a new partner initiative called the 'Growth
Through Skills' program. Under this, we are looking to get our partners skilled
and ready to sell the software from both a technical and sales perspective. This
will help us streamline our partner base in terms of getting only those partners
willing to make the commitment both financially and also upgrading the skills to
engage with us. As per the program, we want each of our partners selling our
software portfolio to have a minimum of two technical and one sales
certifications.

Lastly, for those partners who are involved in selling SAP systems, we are
giving their sales team an extra commission for selling our DB2 database as a
part of the overall solution offering to the customer.

Tell us about your India specific performance and give us a sense of the
global scale as well.

We are growing at twice the market rate in India. As per the IDC estimates,
the information management and business analytics market in India is growing at
16-18 percent and we are growing at well over 30 percent in the country.
Traditionally our business has come from selling the DB2 product but we have
been seeing increased revenue coming from our other solutions like Optim and
Infosphere. At a global level, we segregate our markets in two-growth and mature
markets. The growth markets of which India is one, have been growing at three
times the mature markets for Information Management and twice that of mature
markets for Business Analytics. This has been possible mainly because we have
been investing in growth markets especially with regards to skills. The global
market for business analytics and information management is in the region of $30
billion.

What are the drivers of growth in this market?

Given the explosion of data especially non-traditional data from sources
like social networking media has increased the need for managing information as
well as deriving insight from that information to gain competitive advantage
over others. Personal selling is the most powerful form of selling and gaining
insight through analytics can help customers gain that advantage. Some of the
applications of analytics is voice analysis and facial recognition. Another
aspect is the variety of data that companies have to deal with now. It becomes
important to be able to react in real time and analytics and managing of
information can help achieve that. In India, some of the key verticals boosting
growth are telecom, BFSI, retail, transportation and manufacturing. At a global
level, one major difference is that healthcare is an important factor for
increased growth in the market.

How does China differ as a market from India?

In my experience, I find that Indians are more inquisitive than the Chinese
although both are good at numbers. This approach helps from an analytics angle.
Indians are generally more willing to admit that they have unusable and
redundant data while the Chinese do not want to do it though they know the data
is bad. What works in China's favor is the fact that offices are more
centralized and consolidated and with the penetration of Internet and the
quality of bandwidth being superior to the average availability and throughput
in India, the efficiencies availed through analytics is realized more tangibly
there. In India the data storage is more fragmented across various places with
datacenters being situated locally. For us at IBM, we have a higher installed
base of databases in China while in India, it is Oracle that has a larger base.
To counter this, we are going 20 percent cheaper than Oracle in our license cost
for the DB2. SAP in India is the enterprise system that sits at the middleware
level making calls on the database and that is why we have also partnered with
SAP to sell our DB2 here. Also with our Infosphere suite of products, those that
are using Oracle on the backend, do not need to overhaul their database but can
still switch over to IBM for analytics applications. This can be done through
the Infosphere which sits at a layer on top of the database. Average
implementation time for Infosphere takes around two-three months.

What are the challenges you are seeing in India and how are you overcoming
them?

One major challenge is the network bandwidth in India. The government is
slowly implementing projects and in two-three years time we should see more
concrete results. The reason this is crucial is because faster throughput means
the dependency on the network for business decisions based on information and
analytics in real time would increase.

The other major challenge is the shortage of skilled manpower competent to
deal in software solutions both technically and from a sales perspective. The
key decision makers we sell to are the CFOs and those heading sales and
marketing since the need for information management and predictive analytics is
felt more in the finance and sales/marketing departments. In finance, it is used
for budgeting and planning and to measure other key performance indicators. For
sales and marketing, it can help with optimizing one's supply chain, figuring
out when it is the best time to cross sell and up sell etc. We have a range of
products available but we also need the ground skills to be ready in place here
in India and to do that we have training initiatives. Experience will play an
important role in the develop­ment of partners.

Finally what are your plans for the product portfolio?

For the business analytics basket, we will continue the integration of SPSS
and Cognos. The integration with hardware will also continue and with $3-5
billion earmarked for further acquisitions,

you can expect to see other products being integrated to help with overall
compression, speed and capability. Toward the end of the year we will look to
expand our offering on the cloud from the current Lotus Live to include other
apps as well. We are also extending the base edition of Infosphere to address
the data sourced from social networking. We will not be integrating DB2 and
Informix as some are expecting, because they serve two separate needs.

johnj@cybermedia.co.in