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December 16, 1998

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IBM Global may pick up stake in Microland

Email this story to a friend. IBM Global Services, the US giant's India arm, is in talks with Microland Limited, a networking services major in the country.

IBM Global sources say talks between the companies were initiated two months ago and it is early to comment on the amount of stake IBM may pick up in Microland.

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Declining to comment on the development, an IBM Global spokesperson has been quoted as saying that "As a policy we do not comment on speculations."

A spokesperson for Microland said there has been no such talks.

IBM Global has been aggressive in its expansion plans and is eyeing a clutch of cutting-edge technology companies for strategic investment in the country. The company is in an advanced stage of completing one such investment in Equifax Venture.

"Picking up stake in Microland will boost IBM Global's growth plans in India. Within a couple of years of starting its operations it is eyeing a turnover of Rs 300 crore (Rs 3 billion) by this yearend," an industry analyst tracking IBM Global said.

"Microland is bound to gain to a large extent by this investment as the company's growth rate has slackened during the past two fiscal years," the analyst added.

It is also learnt that in addition to this investment from IBM Global, Microland is being actively sought by investment banking institutions to pick up stake in the company.

IL&FS, ICICI Venture (formerly TDICI) and GE Caps are some of the corporations who have already invested in Microland.

Microland started as a systems integrator and has widened its offerings and is now involved in IT consulting, systems integration, systems management and support, in addition to imparting, precisely the areas in which IBM Global operates in India.

Microland has redefined its focus and provides IT services and contractual expertise in the areas of network designing and administration, in addition to messaging, technology migration and other professional services to its domestic as well as international clients.

Microland reported a turnover of Rs 1.81 billion for 1997-98. The company has carved out a software services division, a technology media division and an Internet business solutions company - Planetasia.com.

IBM Global, an 80:20 joint venture between IBM and Tata Sons, is an end-to-end services company offering specialised services in industries ranging from banking to manufacturing to system software to hardware design.

- Compiled from the Indian media

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