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How 6 Billion IBM Dollars Helped Chase Apple Out Of India

In just the past two days, Apple Computer said it's cutting and running from a fledgling tech services operation in India, while IBM announced plans to invest a further $6 billion in the country over the next three years. These can't both be smart business decisions, can they?
In just the past two days, Apple Computer said it's cutting and running from a fledgling tech services operation in India, while IBM announced plans to invest a further $6 billion in the country over the next three years. These can't both be smart business decisions, can they?Of course not. In tripling its investment in India, IBM is embracing the global economy not as it is, but as it will be in five years or so. It's getting ready now for a world that, increasingly, is going to be segmented into regions of excellence around disciplines like electronics manufacturing, software engineering, financial services, agriculture, and pharma.

IBM is betting big that India will for years to come be the center of excellence for software development and related work like IT services and help desk support. With this in mind, IBM wants to flat-out own India's technology landscape, and it's apparently CEO Sam Palmisano's belief that half measures won't do. There's too much potential competition down there on the subcontinent.

Apple's decision to shut down its services center in India just three months after its opening is the right one only in so far as the company really had no other choice. The Mac and iPod maker realized it's just too late to the party in India. There are now too many companies chasing Indian IT talent to try and build a base there from scratch. In all likelihood, IBM's plans to spend billions more in the country put the final nail in Apple's own Indian ambitions.

What's more puzzling is why Apple missed the boat on India in the first place. Steve Jobs has always had an affinity for the kind of touchy-feely, trippy spirituality that many Americans, rightly or wrongly, associate with the country, its music, and certain of its agricultural products. Apple even once ran a series of ads featuring Mahatma Gandhi.

Turns out this may have been more about connecting with Apple's counterculture-loving customer base in the United States than it was about any deeper understanding of India's future role as a global tech hub. Ironic that Palmisano, the blue-suited IBM lifer, "gets" India a lot better than Jobs, the former hippie.