IBM Malaysia strategy pays off

IDG News Service — Mon, 11 Aug 2008 15:59:18 -0700

Technology giant IBM Malaysia has released its second quarter results that exceeded Wall Street's expectations, with gross margin profits recorded in 15 out of the last 16 quarters.

According to the company, its earnings were up 28 percent to US$1.98 per share, exceeding analyst consensus estimates of US$1.81 per share. Revenue was also significantly higher than analyst estimates, up 13 percent to US$26.8 billion compared to the same quarter last year.

IBM Malaysia managing director Ou Shian Waei explained that the strong performance is attributed to the company's strategy of investing in emerging economies as these developing nations build out their infrastructures.

"By doing business in over 170 countries, IBM enjoys an increasingly broad-based geographic distribution of revenue. Revenue from countries in IBM's new Growth Markets organization grew 21 percent, representing 18 percent of the company's geographic revenue. Asia Pacific, where IBM's key growth markets are located, grew 16 percent to US$5.3 billion," said Ou.

Malaysia's key role

Ou said that Malaysia is part of IBM's Growth Market organization, headquartered in Shanghai, China, and represents 60 percent of the world's IT growth.

"IBM continues to invest in Malaysia, which plays a key role in its globally integrated enterprise strategy. From three employees in its earliest operations, IBM in Malaysia has grown to over 3,000 strong today with more than 10 shared centers in the country that cater to functions like research and development, accounting, and finance. It has also recently launched a new building to house its ASEAN Regional Contact Centre, which will increase its capacity to support IBM's global clients in 70 countries as well as more than 12,000 IBM users in the ASEAN region."

Following what he described as a radical transformation of its business five years ago, Ou explained that IBM is working closely with the Malaysian government on realizing Malaysia's goal to become a global ICT hub with shared centers as well as initiatives in human capital development with programs like Service Science Management and Engineering (SSME).

He added, "For 47 years, IBM has been at the forefront of the continuous advancement of business and technological innovation in Malaysia. We have also embraced global opportunities, shifted our focus to higher value spaces and transformed our offerings and management systems to deliver what our clients really want: integration and innovation."

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IBM Malaysia strategy pays off