India and IT Industry

NYT has a story on the vital role India is playing in the future growth of IBM and other IT global multinational companies.

I.B.M. is growing not only in size by adding new hires, but also in revenue. The company's business in India grew 61 percent in the first quarter of this year, 55 percent in 2005 and 45 percent the year before.

That growth has not come just from taking advantage of the country's pool of low-cost talent. In recent months, the technology hub of Bangalore has become the center of I.B.M.'s efforts to combine high-value, cutting-edge services with its low-cost model.

For instance, the I.B.M. India Research Lab, with units in Bangalore and New Delhi and a hundred employees with Ph.D.'s, has created crucial products like a container tracking system for global shipping companies and a warranty management system for automakers in the United States. Out of the second project, I.B.M. researchers have fashioned a predictable modeling system that helps track the failure of components inside a vehicle, a potentially important tool.

So what started as a simply cost reduction strategy is now becoming the USP for many IT companies.The It talent pool in the country is now all set to take IT Co's in the next phase of growth..