TBY talks to Hugo A. Santana Londoño, President & CEO of IBM Mexico, on the country's growing importance as an IT center, and the quality of its human resources.

What role does Mexico play in IBM's Growth Market Unit for developing markets?

We have 85 years of history in Mexico, and we recently announced a $70 million investment as part of our Road Map 2015, which is very important for IBM. Within that document we present the four main strategies for the corporation. One of them is a Growth Market Unit, which is comprised of about 140 countries with large opportunities for growth. In these areas, the IT penetration rate is usually lower than in major markets. When we started this project, the Growth Market Unit was below 20% of the company's total revenues. The Road Map 2015 outlines the objective to increase that figure to 30%. IBM has selected 20 countries for higher growth and investment, and Mexico is one of those. We are very proud of this fact and are focusing growth more on the business market. The other three focus areas are cloud computing, business analytics and optimization, and Smarter Planet.

Within those three business groups, where is the main focus in this market?

At IBM, we are applying cloud computing, business analytics, and smart concepts. We have built what we call the transformation of IBM, which incorporates goals to maintain the hardware business while building a strong software and services basis. Currently, hardware makes up only 20%-21% of the total business of IBM. We were able to build 80% of our operations around software and services, and this links to a strategy we have been carrying out recently. We are approaching IT as a supporter of businesses. We are investing heavily in the transformation of our business and are becoming more linked to the idea of technology supporting other enterprises. We combine the industry and our knowledge as part of the strategy, bringing huge amounts of expertise to Mexico. A sub-chapter of business analytics and optimization, which is very popular in Mexico, is what we call “smarter commerce." Smarter commerce is breaking the boundaries between retail, telecommunications, banks, and consumer companies by connecting ecosystems. We are also connecting to the consumer in a smarter way, utilizing social networks to the full potential on the business side. We have many tools and methodologies for smarter commerce, which include taking advantage of social media and software that allows clients to run campaigns on the web and utilize the best marketing strategies of the digital world. We also offer core metrics, which can help our customers measure the success of their campaign on the web.

“The university system here is very strong, especially in terms of IT, where graduates are highly qualified and talented."

How is the development of technology impacting data centers in Mexico?

We are seeing that consumers are maturing and they seek to concentrate on their core business. It is very difficult for many customers to keep up with technology investments, training, and certification. We have offered 60,000 courses in Mexico in the last two years, with 1,000 new technical certifications. For any company with core business separate from the IT side, it is difficult to maintain something like a data center—considering air conditioning, energy, space, security, heat, back-up generators, and diesel. We developed a Smarter Data Center in Mexico with a $30 million investment and we plan to operate four in total by 2015. IBM uses only the latest technology to analyze floor space and energy and heat distribution. Customers can connect through the web to see their equipment, evaluate each piece, and monitor them remotely. The services they can offer are under the umbrella of four categories. One is outsourcing; a second is software production: worldwide, there are 60,000 people working in our software facilities. We are exporting software and services from Guadalajara, which is home to a global delivery center. The third possibility is technology services—specifically traditional varieties such as maintenance and technical support. The fourth one is consultancy.

How strong is the local market from a human capital perspective?

The university system here is very strong, especially in terms of IT, where graduates are highly qualified and talented. IBM has formed alliances with 80 universities in Mexico, where we share best practices, certification programs, and policy making. Our partner schools maintain the right to use all of our software—there are 1,000 products that professors can use for free to teach students about best practices in the corporate sector. We also employ 350 ambassadors who can teach or link universities mainly in Mexico City, Guadalajara, and Monterrey. It is very important for us to identify top talent from the best universities and provide them with a balanced curriculum.

How is demand from the SME segment evolving?

IBM has formed partnerships with 100 new SME corporations in the last six months. We are growing with a specific mid-market strategy for SMEs. IBM has assigned 200 new people to carry out such projects in Mexico, and our expansion approach is working well. The new branches constitute a $10 million investment. It's beautiful when you bring value-added technology to smaller corporations or companies, because it sincerely supports their business. This is our specialty.

How would you advise clients to implement a successful cloud strategy, and what particular trends can you identify in this market?

In Mexico we just announced part of a $70 million investment, and $30 million of it will be allocated to an IBM Smarter Data Center located at our Technology Campus in Guadalajara. The data center is already a base for cloud computing. With the Smarter Data Center, we are aiming to combine the worldwide efforts of IBM in cloud services with a local deployment that includes cloud offerings. Some clouds will be designed for connecting desktops as part of a less-expensive operation with even more control and security, connected to a central cloud that handles everything. This system would not require each PC to be equipped with licenses and software. We can support and concentrate the licenses remotely. Other people are using cloud computing for the maintenance of applications instead of buying the equipment for the software. In addition, the cloud usually has an efficient back-up system in case of disaster, so that all of our clients feel protected with this solid recovery infrastructure. For them to buy this technology themselves would be very difficult, as would be the maintenance process and the hiring of experts. Our cloud helps customers handle a variety of processes and has a myriad of applications.

© The Business Year - December 2012