IBM to prioritize Cebu, Davao
Subscribe Now April 23, 2012 at 10:48am
Wong told journalists from Southeast Asia that IBM is working on expanding to 25 cities in 20 countries to provide IT infrastructure development and software and large service solutions to companies in these secondary cities.
Of these 20 countries, six are key countries of Asean–Philippines, Vietnam, Thailand, Malaysia, Singapore and Indonesia.The company aims to support the medium-sized enterprises, considered one of the fastest growing segments of the Asean economy and where IBM experiences a strong demand. They want to spur innovation in the sector by providing advanced technologies that were once reserved for larger companies with larger budgets.
With this, IBM wants to strengthen its local presence by working with their local partners.
Expanding to cities like Cebu and Davao entails the putting up of a physical office with office staff to act as a sales team, client support and collaborate with IBM’s business partners, who in turn, recruit and educate the public to use IBM products.
Wong said IBM executives made a careful selection of cities to expand to, making sure factors like having a large educated population with a significant wealth of IT skills, a city’s gross domestic product, attractive industries and enough telecommunications and services, were present so they could introduce their products.
Ana Joy Bellosillo, IBM-Philippines geo leader, said they intend to focus serving the manufacturing and retail sectors of Cebu and the agricultural plantations of Davao.
Wong said that 50 percent of their IT services are served in main cities while the rest are served to cities outside the capital. He said they are seizing the IT infrastructure opportunity by taking their company to these cities and offering their range of solutions to industries like banking, telco and public services.
IBM considers Southeast Asia a “region of opportunity”, as the member countries of Asean are economically integrated free-trade zones and is expected to have free labor movement by 2015. Asean also has a combined $38 billion in foreign direct investments, second to China in Asia.
Wong explained that IBM’s strategy is focused on growth markets of 140 countries rather than the mature markets, which consist of G8 countries, because they see it as the engine of growth for the company. He noted that growth markets made up 22 percent of IBM’s global revenue and they expect growth markets to deliver 30 percent of global revenues by 2015.
They also expect 60 percent of the world’s GDP to by delivered by growth markets by 2015.
Wong believes their strategy works, as the company’s first quarter earnings showed a 7.1 percent improvement in profit.
“Our growth market strategy is built on the notion of market expansion, country expansion and city expansion beyond the metropolitan cities,” Wong said.
The company said the opening of new branch offices across the Southeast Asian region will boost IBM’s business and enable it to strengthen its relationships with clients and partners and provide solutions and services to more areas such as information management, IT security, cloud computing and business analytics.
They also want to enable local students gain experience with IBM products. The company said it will allocate an amount for skills and certification to make students familiar with the IBM brand and the solutions it provides.
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