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IBM unveils China business model
By Wen Dao (China Daily)
Updated: 2005-03-17 23:12

The US information technology (IT) giant IBM will develop its business in China in a China IBM rather than an IBM China and plans to open more offices in the market this year.

"When some day people regard IBM China a local Chinese company, we can say we are part of the national assets of the country," said Henry Chow, chairman and CEO of IBM China, on Wednesday.

He said in the interview that one criterion for becoming a local Chinese company is the building of a replica of its US business, and the bringing in of all organizations necessary to the country.

Also crucial to IBM's China arm is the strength and respect enjoyed by its cousin in the US.

Chow said on the sidelines of the annual IBM Forum in Beijing that his business has just opened a new branch office in Hangzhou of East China's Zhejiang Province and will open another in Jinan of Shandong Province in the second quarter.

The world's largest IT company will open another two branch offices in the second half of this year. It will also upgrade all representative offices to branch offices this year.

The firm has six branch offices and nine representative offices in China at present, whose function is to provide solutions to customers in every corner of the country.

IBM will attempt to provide integrated solutions for China's healthcare system, government information utilization and security, and bring added value to businesses.

Chow said his company would also establish an IBM Business Value programme (IBV) in China.

"We believe it is time for us to set down our experience in mergers and acquisitions, as well as business transformation and let Chinese enterprise know how we can help them on their way to excellence," said the IBM China chief.

He said IBM has conducted dozens of mergers in its transformation from a computer-dominated company to a service-orientated business over the past 10 years, which has become an example for many companies, and an example that needs to be passed on to Chinese enterprises.

The IBV programme aims to provide solutions to 19 industries including the banking, insurance, automobile, electronics, petrochemicals, retail, and telecoms.

Chow said the programme will start with research into finance and electronics, and then expand to the telecoms and retail sectors.

Partnerships are also a key to IBM's business plan in China.

The company has over 1,000 major software vendors and system integration providers, which work with IBM to develop IT solutions focused at customers throughout the country.

Last week, it teamed up with major Chinese software developer Kingdee. According to the deal, the Chinese firm has promised to use IBM's DB2 database software and eServers as the primary infrastructure for its enterprise customers' applications, while IBM has agreed to provide Kingdee technological, marketing, sales, and service support.

Chow said IBM will continue to invest heavily in research and development this year.

Its research scope will include business transformation technologies, real-time information and knowledge sharing, interactive technologies, and multimedia technologies.

IBM employs more than 2,000 engineers at its China Software Development Centre, but will add further resources to the centre, as software and services are two promising areas for IBM in China as well as the world.

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