8 April 2004 IBM has bought Indian call centre management company Daksh eServices, one of the country’s largest outsourcing businesses. Although terms have not been disclosed, IBM is thought to have paid up to $170 million for Daksh, making it India’s largest IT acquisition.
“India is one of the fastest-growing economies in the world and an important marketplace for IBM,” said Abraham Thomas, general manager of IBM’s India subsidiary.
Daksh, whose name means ‘skilled’ in Hindi, has annual sales of over $60m and employs 6000 workers. IBM, which already employs 9000 people in India, says it will add all these to its business process outsourcing (BPO) unit.
Daksh provides call centre support for Amazon.com, the online retailer, and Citibank. It is already one of IBM’s IT services clients and IBM Global Services accounts for around half of the company’s total revenues, signing $17.3 billion of contracts in the last quarter.
Lowering prices is now a requirement for IT services suppliers, in the face of demands from customers for lower prices and intensifying competition in the IT services market.
Offshore outsourcing of business services has been the subject of much criticism in the US and has become an issue in the Presidential election campaign. IBM’s purchase coincides with press reports of American workers having to train their Indian replacements before being made redundant.
But recent research by the Information Technology Association of America has claimed that the US economy stands to gain from the practice, with businesses making collective annual savings of $20.9 billion by 2008.