IBM will buy Daksh eServices, a business process outsourcing (BPO) company near Delhi.
IBM hopes to enhance its ability to deliver customer relationship management and back-office services to its clients in various industries by this acquisition.
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It also hopes to increase the scope of IBM's global network of 22 business transformation delivery centres, adding capabilities in India and the Philippines.
The company is not new to using India to deliver low cost services to its customers. The 9,000 employees at its Bangalore subsidiary handle software development for both IBM and its clients.
The proposed acquisition of Daksh by IBM is a continuation of the consolidation in the Indian BPO industry, according to Ravindra Datar, principal analyst for IT services and BPO at Gartner India Research and Advisory Services.
"Successful businesses in the BPO space in India that want to expand further abroad, need the brand, marketing muscle and financial support from a large multinational company or a large Indian corporate house," Datar said. "The acquisition of Daksh by IBM will fit into this category."
Daksh eServices is one of India's largest independent BPO companies. It offers customer care, technical support and back-office transaction processing services to companies worldwide, including Amazon.com.
In addition to its BPO facilities in India, Daksh set up a BPO facility in Manila in January that is expected to employ 1,000 people by the end of the year.
The proposed acquisition of Daksh is the first that IBM has announced in India in the BPO space. The transaction, which is subject to Indian regulatory approvals, is expected to close in May. The financial details of the buyout were not disclosed.
After the acquisition, Daksh will become a part of IBM Business Consulting Services, according to a spokeswoman for IBM India, who added that all the staff at Daksh's operations would be absorbed by IBM after the acquisition. Daksh currently has about 6,000 staff spread over four facilities in Gurgaon and a fifth in Mumbai.
John Ribeiro writes for IDG News Service