IBM and Tech Mahindra inks pact to deliver $2 billion project

The two tech giants teamed up to generate business worth $1 billion each on the segment of 5G, cybersecurity and cloud services to its global customers.

A joint statement issued by both IBM Chairman Arvind Krishna and Tech Mahindra CEO C P Gurnan confirmed that both the tech giants have partnered to generate business worth $1 billion each over the next three years by jointly offering solutions in 5G, cybersecurity and cloud services to customers globally.

IBM chief Krishna is to personally drive the partnership with Tech Mahindra for setting up centers of excellence in the Tech Mahindra's campuses, first in Bengaluru and then to expand in other cities, in order to develop case studies that they can take to customers globally. On the other hand, Indian tech-giant, Tech Mahindra is looking for 40% of the joint work to be on 5G, it's foundation domain from which most of its business returns come from such as AT&T and BT Plc.

“It's a win-win situation for both the client and partners because the customers get access to more technology and more capability and more expertise and the partner can expand the business. And it's a win for us because our business expands,” Krishna asserted in a virtual conference. “If you're getting a billion dollars of revenue (each), look at our profit margins, even at a 20% margin, that means you're spending 80% of that each year on employees”.

Indian IT firms are partnering with cloud providers such as Google, Amazon Web Services, Microsoft and IBM, to help shift client applications to the cloud. This also helps clients shift their IT expenses to an operational model, and be more flexible to deal with shifts such as remote working that has been accelerated due to the pandemic. The shift to the cloud also enables IT firms to use tools such as Artificial Intelligence and analytics to improve their clients business.

“We will be adding a lot of value to each other as we build almost a billion-dollar ecosystem for each other. We are building this on the success of the customers by solving some of their critical challenges,” said C P Gurnani, CEO of Tech Mahindra.

Both executives sounded hopeful about how the pandemic situation in the country indulged in accelerated the adoption of technology by companies, individuals, and countries and is set to continue as technology enables improvement in the quality of life in people.