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3/10/2006
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IBM Eyes 50,000-Plus Indian Employees

And they're doing high-level work. Look at last week's decision to consolidate SOA work in Bangalore.

Meet the new face of IBM software. Siddharth Purohit lives in Bangalore, India, and is an expert at developing the kind of reusable code on which the company is staking much of its future. As such, Purohit represents two of IBM's biggest bets--Indian talent and software built around service-oriented architectures.

IBM is on a hiring binge in India. The company employs about 39,000 people in the country, up 70% from 23,000 a year ago. That rate of growth should continue "for quite some time," says Amitabh Ray, who heads IBM's global delivery operations in India. At that clip, IBM will have at least 55,000 workers in India by next year. And the figure could easily pass 60,000--or 20% of its current worldwide workforce of 300,000.

Jeby Cherian, part of a new world order at IBM

Jeby Cherian, part of a new world order at IBM

Photo by Mahesh Bhat/Getty Images
Make no mistake: This isn't the kind of routine, brute-force coding for which India is known. IBM last week revealed it would spend $200 million a year on a Bangalore development center to centralize work on one of its most strategic efforts--building SOA-based software systems that consultants can resell to customers in various industries. "We're moving all of that development to India," says Jeby Cherian, head of IBM's new Global Solutions Delivery Center in Bangalore. Previously, IBM did this work in a number of development centers worldwide.

Along with churning out software components, workers at the Bangalore center will design new ways in which businesses can combine those components with other technologies to solve some of their thorniest, and costliest, problems: straight-through processing for banks, for example, and inventory optimization systems. That's hardly commodity work.

The SOA Bet
IBM needs growth. Its software sales were flat last quarter, and its global services business was down 5%. Software based on SOA is one of its big growth bets. It plans to invest $1 billion this year around SOAs, which let companies reorganize IT infrastructures around processes. Software to "check shipping status" exists as a reusable component, one of many that can be mixed and matched to create, say, an online inventory management system. SOAs are all the rage because they're easier to maintain and update, and because they offer a way to Web-enable processes with less custom programming. Most companies using SOAs spend less than $1 million annually on the technology, but 60% of them will increase spending by an average of 17% this year, AMR Research predicts.

Enter Purohit. IBM's India gamble is that it can find enough people like him to make its strategy work. Purohit, 40, obtained a master's degree in computer science from the New York Institute of Technology in the late 1980s, then spent 17 years in the United States on technology and consulting gigs. It wasn't a tough call when IBM offered him a position at the new center. "This is the vision and situation I've been waiting for," says the married father of two girls, ages 2 and 6.

Purohit is the chief architect on a number of key projects at the Bangalore center, including one to build an SOA-based system that will let shipping companies monitor the contents of containers throughout cross-ocean journeys. It's a critical capability for ensuring the integrity of goods that are temperature sensitive or could pose security concerns. The first customer is shipping company Maersk Logistics. The system features wireless container-level tracking devices developed by IBM researchers in Zurich, Switzerland. It's a sensor network that transmits data from the devices to databases that can be accessed by numerous parties, such as shipping managers, customers, and port authorities, using a variety of front-end applications.

Purohit's challenge was to identify and assemble the technologies required for such a system, develop software components where needed, and assemble everything into a working whole. "This group here has the charter to bring all of IBM's technologies and services together on behalf of the customer," Purohit says. "We're creating business solutions and assets that can be reused. This is breaking new ground."

Another example: Teams at the Bangalore center are designing a system that uses telemetry devices, embedded processors, and mathematical algorithms to help automakers predict and manage costs from warranty claims.

While IBM's hiring numbers are huge, its rivals have similar ambitions. Infosys, India's second-largest IT outsourcer, added more than 3,200 employees in its most recent quarter. India's tech and business-process outsourcing industry will employ 1 million more people in 2010 than it does today, as it grows from $22 billion in revenue to $60 billion, predicts India's National Association of Software and Service Companies and consulting firm McKinsey.

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