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Georgina Lee

The sale of its personal computer business to Lenovo last year has ushered IBM's China business into a new era. 

Big Blue is now looking to connect the country with its key software research and development hubs located in the US and France. 

 IBM recently boosted its investment in China in an effort to capture demand from mainland companies looking to revamp their business operations. 

This was done against a backdrop of change including the expansion of Chinese companies overseas, reforms to the domestic banking sector  and the telecoms sector's migration to 3G.

Last week, the IT powerhouse announced its China strategy for the next five years in Beijing as it inaugurated its China business innovation centre, a window for showcasing its solutions tailored for six sectors: finance, telecoms, public service, medical and public health, retail and manufacturing.

 The centre also houses a telecoms solution laboratory linked to the group's four telecoms solution laboratories in the US and France. 

Henry Chow, general manager for IBM Greater China group, said that for the next five years  IBM would focus on helping Chinese enterprises expand globally. 

To achieve  this goal, it expanded its research laboratory in China and established a systems centre last year for supporting Chinese firms' IT needs such as benchmarking, testing and training. 

'Many have asked me if IBM is coping well with our China business after our sale of PC business to Lenovo,' Mr Chow said.  

'I must say that the disposal has simply meant that we are not only leading in our systems, software and IT services businesses in China, we still  have a presence in the PC [market] through our stake  in Lenovo,' he said.  

The company still has a 13.2 per cent stake in Lenovo after its US$1.75 billion sale last year. 

IBM China  employs  more than 2,500 software engineers.  There are about  200 scientists  working in its software development  and research laboratories, and they submitted about 200 patent applications to the Chinese authorities last year. 

 IBM's system centre in Beijing, which houses servers and storage equipment worth  US$500 million, is the only performance benchmark centre located in Asia; the remaining four are located in the US, France and Germany. 

Mr Chow said IBM China, which had  branches in  18 mainland cities, would open four more offices in four provinces this year. 

Peter Shen, vice-president of operations for IBM China, said this year the company would hire up to 2,000 people,  adding to its  team of  more than 5,000. 

The firm would focus on serving the telecoms and the public sector this year, after the emphasis on the financial sector last year. 


IBM said that in 2004, business from its four emerging markets  - China, India, Brazil and Russia - grew more than 25 per cent to  overtake the US$4 billion mark. 

Gartner analyst Annie Chung said that after the disposal of its PC business,  IBM's China strategy had changed from a product focus  to  an industry focus through selling a suite of solutions and hardware according to industries' specific needs. 

 Last year, the company  set up its business consulting division to advise companies on their business operations.

'It is now cultivating  industry expertise ?so that it could sell its solutions and hardware with an industry focus. The research by its business consulting division could back up its IT software innovations team and [help it] sell more specific solutions to these industries,' Ms Chung said. 



IBM steps up presence and boosts R&amp;D in the mainland

IBM steps up presence and boosts R&amp;D in the mainland

IBM steps up presence and boosts R&D in the mainland