SMB is a big slice of the cake for IBM

Ramesh Narasimhan, director, General Business, IBM India/South Asia, in an interview to V. Sudhakshina of CyberMedia News, talks about IBM's strategy and initiatives as well as the challenges in terms of addressing the small and medium business sector.

What are the key priority areas for SMBs when it comes to IT? Are they still setting up their basic IT infrastructure?

Businesses of all sizes need information technology that's flexible, secure and easy to maintain. SMBs want the same thing as do large enterprise clients. That is value and innovation. Significantly, the mid market companies face the same issues as large companies, but have fewer resources and time to address those challenges.

Some of the top challenges these companies face today, include, information management, virtualization, and collaboration technologies.

IBM services, software and systems for midsize companies can help SMBs gain actionable insight, increase productivity, and improve collaboration.

We recently launched the first, all-in-one, pre-packaged business intelligence and planning solution Cognos Express, designed to help midsize organizations glean the information insights they need to effectively navigate through these difficult times, but without the costs and complexities that come with traditional enterprise solutions.

What are their IT budgets like? What per cent of their revenues goes into IT?

According to a recent study by IBM, even in tough economic conditions, over 50 per cent of Indian mid-market business decision makers expect their IT budget to increase in 2009 versus last year.

The majority of Indian companies surveyed cited information management, supply chain management and security management as critical business priorities for improving business performance and efficiency. Most midsize companies also recognize that a go-it-alone strategy may hinder their chances for success, and finding strategic IT partners who can collaborate with them to realize their vision is the key for success.

Some of the common barriers at growing organizations are an inability to implement IT and lack of required skills in-house. Study findings indicate that many midsize firms work with IT providers and consultants to overcome these barriers.

In terms of selection criteria, 70 per cent of those surveyed indicate that they prefer to partner with an IT company which has expertise in their business to help them work smarter, while 67 per cent look for partners that can provide the highest quality IT infrastructure solutions. Improving efficiency and productivity, improving customer focus and sharpening business agility emerged as the leading business challenges in the study.

How does the company solve their challenges in terms of lack of proper infrastructure, costs, awareness etc?

IBM’s tailor-made solutions help SMBs reduce cost; improve service delivery by enabling business innovation. We will continue to invest in the mid market. IBM is serious and committed to enable the growth of midsize business.

Every part of the company, including our industry-leading research and development team, our global financing unit, and our unmatched global network of business partners, is now focused on providing innovative solutions uniquely developed for midsize companies both in mature markets and in the developing world.

IBM's acquisitions in software and services have given the company tremendous new capabilities to help midsize companies prosper and grow, even during difficult times.

In 2009, IBM updated its Business Partner charter. Our goal is to streamline virtually all business processes, increase our commitment to training and education, and to dedicate ourselves to doing whatever it takes to make our clients successful. For instance, at a time when our competitors are cutting back on resources for partners, IBM continues to invest in its partner’s success - to the tune of $2.5 billion this year, globally.

What is the contribution of the SMB sector to the revenue of IBM?

Think of IBM and images of large enterprise, big business implementations usually come to mind. We have the largest number of patents than any other company for 16 years in a row, and invests over $6 billion annually in R&D.

IBM has over 3,000 scientists in eight Research labs in six countries, 25,000 technology developers in more than 60 major development labs, a Business Partner network of more than 100,000, and an innovation ecosystem of greater than one million. Indeed, not many would guess, for IBM small and medium is a big business.

What is the strategy followed by IBM India to address the SMB market?

IBM is focused on building integrated and multi-product IT solutions to help SMBs innovate in today’s challenging times.

Our solutions are exclusively designed for SMBs with high flexibility and better ROI in mind rather than simply repackaging enterprise solutions at a cheaper price. The solutions draw strength from IBM's extensive research and consultancy and design is driven by the right solution, right package, and right value proposition that meet their need in consultation with channel partners.

The end result is something the partners feel as a compelling value for their customers. We focus on solutions as we don’t believe in a piecemeal approach.

Could you name a few of your SMB customers? How IBM services and solution have benefited them?

While our list of SMB customers runs quite long, and spans across all industry sector pan India, to refer a few: India Glycols, Mahesh Sahakari Bank, Surat District Co-operative Bank, Kurmanchal Bank, Kusumgar Corporates, Innovation AutoRisk etc.

Let’s consider the following case: Madhav Bank, which is a co-operative bank based in a small town of Sirohi in the state of Rajasthan, had the ambition of bringing technology-enabled banking to its large base of rural and semi-urban customers by offering them services like centralized banking, Internet banking and mobile banking. IBM's 5-year contract with the bank to provide a remote IT infrastructure hosting and management from its center in Bangalore helped the client achieve its ambitions while not investing huge up front capital.

For instance, IBM signed a 10-year information technology (IT) outsourcing agreement with Kurmanchal Nagar Sahakari Bank Ltd, one of the leading urban co-operative banks in the state of Uttarakhand in India.

As part of the agreement, IBM remotely hosts and manages the IT infrastructure, manages the disaster recovery site and provides entire networking infrastructure for the bank. This helps the bank focus on its aggressive expansion plans while reducing its capital expenditure on IT by as much as 60 per cent.