Tech Mahindra and IBM to create $1 bn ecosystem together

The two companies, who have been in a global partnership for more than two decades, will work on five strategic focus areas comprising 5G, automation, hybrid cloud, cyber security, data and artificial intelligence (AI).

The partnership is aimed at expanding access to more clients, thus increasing the overall size of the market.

About 40% of the revenue will be driven by telecommunications and 5G, powered by hybrid cloud, while 60% will be from other industries, said C.P. Gurnani, chief executive officer (CEO) and managing director, Tech Mahindra.

“It is about driving a smaller share of a much bigger market as they bring in the innovation, capabilities, and expertise of all of us to solve problems for our clients," said Arvind Krishna, CEO, IBM.

“The Indian market is really vibrant. Remote delivery is going to offer Indian companies a great ability to expand their market share globally. That implies they have to think about their digitization infrastructure and that is an opportunity for all of us," Krishna said.

The two companies will also co-invest in centres of excellence and innovation centres in India, South Asia, and the US.

With IBM set to spin-off its managed infrastructure services unit as a separate public company by end-2021, it has sharpened focus on tapping the $1-trillion hybrid cloud opportunity as only 20-25% of the workload worldwide has actually moved to any form of cloud.

In the last six months, IBM has strengthened its long-term relationships with global system integrators in India and other markets, especially with those who are helping clients modernize workloads with Red Hat OpenShift for any cloud environment.

The longstanding global partnership between Tech Mahindra and IBM has also led to the development of solutions by leveraging IBM’s blockchain, data and artificial intelligence, and security capabilities.