IBM India rakes in $5 billion in revenues in FY17, outperforms Infosys, TCS

10 | IBM (Image: Reuters)

Global technology giant IBM earned USD 5 billion from outsourcing operations in India in FY17, beating domestic firms like Tech Mahindra.

IBM registered a strong growth of 41 percent in the April-March period. This was mainly due to the technology spending in the domestic outsourcing market.

A report by Mint said that IBM reported revenues of Rs 32,325 crore (USD 5.01 billion) in the fiscal year ending March 2017, compared to Rs 23,005 crore earned a year ago.

These figures made IBM the largest technology services firm in the domestic outsourcing market, outperforming Infosys and Tata Consultancy Services (TCS) and Wipro.

A key source of revenue for IBM were  multi-year, multi-billion dollar outsourcing contracts from marquee customers such as Bharti Airtel, Vodafone India and Idea Cellular (before the Vodafone-Idea merger).

At one point, the size of IBM’s India workforce was once 150,000. This figure has, however, shrunk in the past five years to about 100,000 as IBM has automated a number of commoditized services, such as software maintenance.

According to sources who spoke to Mint, IBM India generates most of its revenue from selling services to overseas clients, only to recover the services it sells overseas from customers and service providers it works with.

Analysts point out that the firm needs diversify its operations away from software maintenance, which is facing a stiff challenge from automation and immense commoditization.