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April 08, 2004
An Indian Advantage
Posted by Dana Blankenhorn
IBM has bought India's #3 outsourcer, Daksh. It will be renamed IBM Business Consulting.
Daksh has 13 clients, including Amazon.com, Forbes reports, and 6,000 employees. The company cost $150-200 million, and it had revenues of $60 million. Do the math on sales per employee -- it's fairly modest.
The deal gives IBM a total of 15,000 employees in India. It's expected to be part of a rush of such deals by U.S. firms. (The illustration, by the way, is from an IBM Web site, about a technology conference in India.)
It's important, I think, to note the difference between India and China here. China has been very reluctant to allow outright buy-outs of its technology firms. Indians figure they can use the capital to start new firms higher-up on the value chain.
Also, the direct investment shows confidence by Ameriacn firms that they can get their money out, that their investment will be respected rather than manipulated in the interests of the state.
I like India.
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Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
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