IBM mulls big IT lab for SA

2008-06-25 07:15

Johannesburg - IBM may consider building a software development laboratory in South Africa to invent, create and maintain software commercial products, the head of its software division said on Tuesday.

Steve Mills told Reuters in an interview his firm may invest even more in South Africa, to bolster its existing operations.

Mills spoke after opening IBM's first Africa innovation centre in Johannesburg, meant to develop IT skills.

"This centre really provides a starting point," Mills said. "It may provide an anchor point for creating an ever larger solutions laboratory."

He would not put a timeline on when IBM is likely to build a software development laboratory in the country.

In December 2007, IBM committed to increase its investment in sub-Saharan Africa by about $120m up to 2009.

The company has a hybrid software development lab in Egypt and Brazil, and other labs in China, India and Malaysia.

"And the same potential exist here (South Africa). There is more (investment) coming in the future with every expectation the (IBM's) growth rate is going to justify continuing increase in those investments," said Mills.

"Based on the establishment of this innovation centre and staffing, our total IBM population here is South Africa will continue to grow."

IBM said its South African unit grew at a rate of more than 20% in rand in 2007.

He added that the building of the centre would enable IBM to have skills to serve both South Africa and other customers in Africa as part of its roadmap for growth.

The new innovation centre would grow IBM's technical talent and expertise in sub-Saharan Africa, the firm said.

"So we are taking a regionalised view, which we hope is going to expand into not just one significant anchor country but hope some other countries start to be more significant in terms of their revenue contribution," said Mills.

To respond to growing economies and people who want information technology services, African markets have to build and develop IT and business infrastructure. South Africa was a launch pad for expanding into other African nations, Mills said.

"That's what the centre is all about. That's what the incremental investment, resources, hardware, etc, is all targeting to do," he said.

IBM is also eyeing growth opportunities in Africa's telecommunications sector, which are likely to upgrade their network infrastructure to broadband. Mills said the company sees a huge growth in wireless communications in Africa.

- Reuters

- Reuters