'E-business infrastructure is the cornerstone of IBM’s strategy for products and services.'

As VP of IBM’s Asia Pacific Personal Computing

Division, Ravi Marwaha has a clear focus for PC business in this region. A

mechanical engineer by qualification, Ravi has stayed on with IBM for the last

33 years. And in these years, he has worked in different capacities in Australia,

Japan, Germany, USA and India. During one of his earlier assignments as GM, IBM

India, he was responsible for creating successful joint ventures for IBM in the

country. In an exclusive interview, he shares his business strategy with DQCI.

What is your strategy for PC business?



Our strategy as far as PC business is concerned is fairly clear. E-business
infrastructure is the cornerstone of IBM’s strategy both in terms of products

and services. And we want to make sure that we have the most innovative,

well-designed and high-quality product.

We believe that there is a lot of focus on ‘cost of

acquiring’ machines and we are happy to address that by good design and

innovative products. But, now we are going to focus more on the ‘cost of

deployment’ and the ‘cost of future ownership’.

How do you plan to do that?



When I talk about the ‘cost of deployment’, we are doing a lot of work
in having special software for managing applications, or what is termed as

images. Whatever software you have on your PC is the software image. A big

company has many images. They may have an image for their sales people, a

software image for their design people, another image for their accounts people.

Managing images is a big cost which people

underestimate. So, every time you want to change images you have to test and do

many things before you can implement a new piece of hardware or a new

application.

We are going to have a proprietary software, called

Image Ultra, to manage that image. And its going to be available soon.

How has IBM managed to maintain a low ‘cost of

ownership’ for its PCs?



We strongly believe in the principle of ‘cost of ownership’. And cost of
ownership at a business level is very important as it is at an individual level.

If you add the cost of OS, anti-virus and a three-year warranty, you will

actually find that there isn’t any difference. The only difference is that the

advertised cost and hidden prices are not well understood by many customers. But

today in the commercial and corporate world, people have understood the cost of

ownership.

Which are the prime areas that IBM is focusing on

for the future of PC business?



According to our customer feedback, the three top priorities on their mind
is wireless, security and migration. And effectively these are the areas where

IBM is focusing on for its future PC business.

What role do you envisage for channels in PC

business?



As far as our go-to-market strategy is concerned in Asia Pacific, it is
clearly one of having the predominant part of our business done through

channels. And so it is very important for us that we and the channel make sure

that our relationships work out well.

At the same time we are clearly going direct where

customers want it. It works out very well in some areas where customers don’t

require the value from our channel. But there are vast majority where customers

do require the value from channels. For us it is just a matter of making sure

that our portfolio is able to address both.

In the light of the negative growth in PC sales in

the first six months of 2001-02, what is IBM’s outlook?



I am not sure whether IBM’s outlook really matters. What you should really
look at is the outlook of research agencies like IDC. Because frankly what

happens to the PC business depends a lot on what happens to the economy.

We can have a thousand opinions about what happens to

the economy. But if you look at IDC, they have a reasonable view based on what

they talk to the industry. Their view is that there will be a gradual

acceleration towards the end of this year with a fairly strong FY 2002-2003.

Our view of it is frankly that we need to be the best

at satisfying our customers. It really doesn’t matter what the market growth

is, as long as we get a good share of the market. So we have to be focused on

what we can do best.

What is your share now?



According to IDC, our market share stands at around 8.5 percent in India.

There is a perception that IBM PCs are priced higher

compared to other brands. Comment.

We don’t think so. In fact I will be happy to

convince any customer that they will end up spending far less money on an IBM

PC.

If you look at the consumer segment, I don’t believe

our products are expensive, but as a strategy IBM’s focus is on commercial

space. We do have consumer products that are priced higher, but we focus much

more on the SO (small office) part of it rather than the HO (home office) part.

But, isn’t HO too a big market?



Could be, but that is OK. I have to decide where I am going to focus.

If prices are competitive, then why is that your

share is not picking up?



It is picking up. It used to be two percent sometime ago and has become 8.5
percent now.

What efforts do you undertake to ensure maximum

channel satisfaction?



Channel satisfaction is very critical to our business. We measure our
channel satisfaction depending on what we can do in the market space. You need

to make your products available in the market and there has to be a demand for

those products and channels do the role of fulfilling and supporting our

customers. We are also concerned that our channels do well.

IBM is unique in providing so many business

opportunities. We tell our business partners that we have a basket of

portfolios. Depending upon when they are ready and able to build up their own

strengths, they can pick up different IBM products, be it software, services,

networking or e-business infrastructure.

SYLVESTER LOBO & NELSON JOHNY in

Mumbai