Posts Tagged ‘emerging markets’

IBM’s Growth Markets grow…and get smarter.

February 3, 2010

A couple of weeks ago IBM announced its 4th Quarter and Full-Year 2009 results.  Their Growth Markets Business Unit which includes 140 of the 170 countries that IBM operates in – grew 14% in Q4 compared to 3% decreases in the Americas.  For the quarter, Growth Markets represented 20% of IBM’s revenue.  For the year, Growth Markets were 19%, up just slightly from 18% of total IBM revenue in 2008.  The signs are clear: Growth Markets are growing, even as other markets fell.  Much of the success in Growth Markets has come from “Smarter Planet” solutions which are gaining traction among governments, utilities and private sectors.

NOTE: IBM’s growth markets are those that show increased potential for them.  They do not equate to emerging markets according to the financial world’s and economic discipline’s definition.  But, there is much overlap.

As I have been thinking about the role of “smarter computing” in emerging markets, and the opportunity to “do it right the first time,” several of IBM’s recent wins resonated with me.  Increased urbanization across China for example – and last year’s Chinese Government stimulus package – has spurred infrastructure development.  While much has been written about the resulting real estate bubble in China, there are other long-term infrastructure investments that will contribute not only to continued GDP growth but also to long term productivity and economic development.

“Smarter cities” that embed intelligence and data analytics across transportation systems, resource management, electricity grids, public health and safety and other municipal initiatives can help local governments to leap frog the traffic congestion, blackouts, crime waves, epidemics and other afflictions that have plagued urban areas throughout history.  These initiatives will also encourage civic engagement by providing channels for government officials to encourage and capture public opinion, enabling citizens to provide feedback on and potentially input into government initiatives.

Here are a few IBM Smarter Cities wins from China that are worth highlighting:

China: Kunshan Municipal Government

Kunshan Software Park

The Kunshan Municipal Government, CVIC Software and IBM announced a co-operation in Kunshan City, Jiangsu Province. The three parties will jointly set up the smart city strategy solution development center, laboratory and service center in Kunshan Software Park. The solutions will support the implementation of the Smart City solutions covering the areas of e-government, food management, water resources management, smart transportation, public sanitation and health management and city security areas.

China: Shenyang Government

The Shenyang government and IBM have embarked on a major collaboration project in an effort to help the Shenyang city fulfill its vision as an eco-city in China. The collaboration will see investment of RMB $300 million from the Shenyang Government, and will lead to the set up of an IBM Collaboratory in China. It covers areas of eco-city planning, water quality management and pollution control, carbon emission reduction, food safety as well as intelligence and public opinion collection and analysis for city development and environmental protection. Chosen by China’s State Council to be the model city for environment protection and development, Shenyang is committed to fulfilling its environmental responsibility goals. Shenyang, with a population of over 7.5 million, is the capital city of Liaoning province in Northeast China and an important industrial center in China. In the 1980’s, Shenyang was identified by the World Health Organization (WHO) as one of the 10 most polluted cities in the world.

China: ENN Group

IBM and ENN Group, an energy provider in China, entered into a strategic agreement where the two companies will work together to provide Intelligent Energy solutions for building smart eco-cities in China. The extensive collaboration includes strategic investment by IBM in ENN’s energy services business, joint development of “Intelligent Energy” solutions and combined efforts to build the industry expertise and skills to serve the energy market in China. In addition, IBM will provide Information Technology infrastructure management and services, as well as application management and maintenance services to ENN. As part of the multi-year agreement, which is also IBM’s largest contract sealed in China in the last 10 years, IBM will leverage its deep expertise in consulting services and enterprise transformation to help ENN reengineer its processes across the company’s core business areas, including corporate strategy, business development and marketing, accounting and financial management, project management and service delivery.

Wouldn’t we all like the opportunity to get it right the first time? Or at least the opportunity to do it again?


Taking a stand. You go Google!

January 13, 2010

Just sharing a blog that could make a huge impact on the business, economics, and politics of China.  I’ve excerpted the key portions for you below:

A new approach to China

1/12/2010 03:00:00 PM

Like many other well-known organizations, we face cyber attacks of varying degrees on a regular basis. In mid-December, we detected a highly sophisticated and targeted attack on our corporate infrastructure originating from China that resulted in the theft of intellectual property from Google. However, it soon became clear that what at first appeared to be solely a security incident–albeit a significant one–was something quite different.

First, this attack was not just on Google. As part of our investigation we have discovered that at least twenty other large companies from a wide range of businesses–including the Internet, finance, technology, media and chemical sectors–have been similarly targeted. We are currently in the process of notifying those companies, and we are also working with the relevant U.S. authorities.

Second, we have evidence to suggest that a primary goal of the attackers was accessing the Gmail accounts of Chinese human rights activists. Based on our investigation to date we believe their attack did not achieve that objective. Only two Gmail accounts appear to have been accessed, and that activity was limited to account information (such as the date the account was created) and subject line, rather than the content of emails themselves.

Third, as part of this investigation but independent of the attack on Google, we have discovered that the accounts of dozens of U.S.-, China- and Europe-based Gmail users who are advocates of human rights in China appear to have been routinely accessed by third parties. These accounts have not been accessed through any security breach at Google, but most likely via phishing scams or malware placed on the users’ computers.

These attacks and the surveillance they have uncovered–combined with the attempts over the past year to further limit free speech on the web–have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down, and potentially our offices in China.

Posted by David Drummond, SVP, Corporate Development and Chief Legal Officer

Reaching real tech buyers in emerging markets virtually. Really!

October 14, 2009

Not all technology buyers in emerging markets are accessing the internet from mobile phones or dial-up connections.  In fact, many places in countries considered “emerging markets” are rapidly resembling more mature markets, in income levels and especially in mobility, internet access, and now broadband penetration.  Shanghai, for one, is probably better connected than some cities in the middle of the US.  What does that mean for technology marketers?  It means that they can leverage their complete toolbox of marketing tools to reach those audiences — and increasingly they are doing just that.

One tool that is rapidly entering the mainstream is the use of virtual events to connect with audiences far andvirtualevents_emergingmkts wide.  In Forrester’s Business Data Services Global Technology Adoption Survey, IT decision-makers in emerging markets report greater use of virtual events to inform purchasing decisions than their mature market counterparts — 42% in emerging and 37% in mature markets.  When compared to physical events, buyers in some countries — Chile, Mexico and  Vietnam — participate more in virtual events (see figure).  And, tech marketers are paying attention.  One of EMC’s virtual launch events attracted almost 8,000 attendees from over 80 countries.  And, you don’t have to be big to have that success.  Quest Software’s 2008 Quest Connect event attracted almost 1500 attendees from 20 countries.

Stay tuned for some tips on how to plan and execute a successful global virtual event.  And, in the meantime, take a look at my recent Forrester report, “Reach Real Global B2B Tech Audiences With Virtual Events: New Tools And Best Practices For B2B Marketing Beyond Borders.” And, attend my upcoming Forrester Teleconference, “Reach Real Global Audiences With Virtual Events,” on Monday, October 19, 2009, 1:00 p.m.-2:00 p.m. Eastern time (18:00-19:00 UK time).

What keeps your customers up at night?

October 9, 2009

Adapting marketing messages to specific audiences is a topic I’ve written on here and in a few of my Forrester reports.  Getting the messages right requires an understanding of the drivers and motivations of buyers.  And, going into new geographical markets means that you’ll need local knowledge; you can’t assume that you know what will resonate in a particular market.  Recently I came across an example that illustrates the point in The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World, by Jacqueline Novogratz, Founder and CEO of Acumen Fund.

In 2002, Acumen Fund began investing in the production and distribution of insecticide-treated bed nets in Tanzania.  While initial investment enabled increased production, and subsequent grants hAcumen_bednetselped distribute the nets to at-risk groups, the Acumen Fund’s mission is to promote social entrepreneurship primarily through market mechanisms.  They wanted to extend distribution beyond give-aways so that nets would be available to everyone.  So, they worked to kick-start a distribution network of sales women who sold door-to-door and at “parties” similar to Tupperware or the Avon lady… I’ve digressed but only to establish context.

One woman particularly successful at selling nets demonstrated that she truly understood her audience.  Rather than pitching the nets through public health messages, she appealed to what she knew would really motivate her potential buyers.  Rather than “must” or “should” and details of health improvements, she focused on beauty, vanity, status, and comfort:  the nets got rid of insects buzzing in your ears and made it easier to get a full night sleep; with more sleep the children would do better in school; the nets are colorful and decorate the house; and when neighbors see them they will be impressed with how well you are caring for your family.

The example is bed nets in Africa but the lesson applies to any product or market.  Knowing what keeps your potential customers up at night — whether it’s mosquitoes or cost or competition — is key to crafting the right messages.

Bridge the Financial Divide with Netbooks

October 1, 2009

There was a great mobile banking article in the Economist last week.   It reminded me of a report written by GSMA on its Mobile Money for the Unbanked initiative that came out a few months back.  The GSMA report points out that mobility penetrMobility_FSaccessation is much higher in emerging markets than is access to financial services — an opportunity for mobile operators and banks to work together to bridge the financial divide.  So, I began mulling the opportunity that these trends provide for netbook adoption:  why don’t netbook vendors partner with local banks to deliver financial services via 3G-enabled netbooks.

Mobile banking has taken off through cell phone access, particularly in Africa and the Philippines. Smart Communications in the Philippines launched its SMART Money initiative in 2000. In 2004 and 2005 some of the first innovative deployments of mobile banking in Africa were launched in South Africa— by WIZZIT and MTN Standard Bank respectively. Safaricom and Vodafone launched M-PESA in Kenya in 2007, with growth of up to 10,000 new users a day, and now over 5 million customers. More recently, MTN announced expansion of its Mobile Money service to its over 80 million subscribers in 21 countries. And, Vodafone will soon replicate M-PESA scale in Tanzania, Zain launched ‘Zap’ in Kenya and Uganda with plans for a broader rollout.  Orange is also piloting a deployment of Orange Money in Cote D’Ivoire.

Combining the momentum of mobile banking and the lively SMB segment, banks in emerging market have an opportunity to equip small businesses with netbooks.  Again, recalling my previous post, for many in emerging markets a netbook is a step up as an internet access and business device.  Sounds like a win-win all around.

Re-write the netbook story for a wider audience

September 24, 2009

Netbooks have cOLPCome a long way from their first appearance as the low-cost device for students in emerging markets — the “$100 laptop” distributed via the One Laptop Per Child (OLPC) initiative.   In fact they’ve come so far that they’ve apparently forgotten their roots.  Netbooks are now — like the pug in my previous post — an “accessory” or a “companion.”  But, neither of those messages resonates well with some audiences — like B2B buyers — or in certain parts of the world — emerging markets.   Netbooks are much more than luxury goods.  And, they don’t need to be relegated to children or students in emerging markets.  Many business users don’t need all the computing power in vivenne-tam-netbookmost desktops or laptops.  In fact, for most uses a netbook is more than enough.  And, for users buying a computer for the first time — and perhaps replacing their mobile phone as their primary internet access device — netbooks are by far an improvement: imagine a full screen and a real keyboard for the first time.  Or imagine not having to go to an internet café to use a PC.  Yes, netbooks are a great device for businesses in emerging markets.  Let’s hope that netbook marketers don’t just focus their attention on the fashion runway.

My upcoming report “Re-write the Story on Netbooks: Get the B2B Story Right for Netbooks in Emerging Markets” will be out soon.  Stay tuned.

Where are tech buyers getting their information?

September 3, 2009

Just wanted to call attention to a couple of new Forrester reports.   I’ve started drilling into the Four Ps — mostly on the promotion front.  Here are a few highlights:

“Vive La Difference” looks at how buyers across North America and Europe inform their purchasing decisions — looking at both how they interact with and leverage social media and which information sources they prefer.  News flash: business buyers do use social media to inform their business decisions.  The results show that tech buyers are more socially active than the overall adult population, and they are using social media tools for work purposes.  But, that use is not consistent across countries.  More technology buyers in France and Germany spend time creating content — likely reflecting language differences and the need for local language content. More respondents in France and Germany also review, rate, or comment on social content.  North American respondents use more social media for work purposes; of all, French respondents were the least likely to use social media for work purposes.

Looking at both traditional and social information sources, there were commonalities and differences.  All respondents rely first and foremost on their peers and colleagues for information.  Beyond that, though, information sources differ across countries.  Some of the most striking differences are between our French and German respondents: The second most significant source of information for German respondents is industry events, trade shows, and conferences; for the French respondents, their direct sales person was their No. 2 source. For tech marketers, the message is clear: Participate in German trade shows and invest in French sales competence and collateral in France.

Following that first regional look at information sources — or marketing vehicles — we took a broader look beyond just mature markets to include emerging markets as well.  The landscape in emerging markets is even more complex. Unlike mature markets, there is no clear No. 1 information source common across emerging market countries. Social media sources rank much higher in emerging markets than in mature markets — but not always the same tools. Overall rankings show that in aggregate across emerging markets the highest ranked sources are only used by a little more than half of respondents (52%) — unlike their peers in North America and Western Europe, where there was a resoundingly common No. 1 source. However, in most emerging markets, social media sources fall into the top 10 — with some as high as No. 3 in Vietnam, No. 4 in China, and No. 5 in Chile. Tech marketers take note: The common thread across emerging markets is not a specific source but rather a greater reliance on new social media to inform IT purchasing decisions.