Revenues up at IBM centre
ONE of Leicester’s newest businesses has seen its revenues rise about 30 per cent on the back of strong growth.
Turnover at the IBM Client Innovation Centre, in New Walk, reached almost £89 million last year, compared with almost £68 million the year before.
However, pre-tax profits dropped by about 15 per cent to £2.5 million, due to changes in accounting procedures.
Salaries accounted for more than £60 million of the annual costs, with subcontractor fees making up more than £12 million.
IBM announced plans to launch the new operation in the city four years ago, to test software, provide support to customers and manage projects.
Much of the work now done in Leicester was brought back to the UK from countries such as China and India.
Council support – including a £1 million grant – played a big part in the multinational picking Leicester as a base for the innovation centre, along with the city’s good transport links, low costs and good recruitment pool, including Leicester, De Montfort and Loughborough universities.
Globally, IBM is placing a growing emphasis on cloud technology, with Leicester playing its part in that process.
The parent company has a hybrid, multi-cloud approach, offering clients the choice to mix up their hosting infrastructure – using combination of in-house, public and private cloud technology.
Last month, IBM announced the $34 billion (£27.5 billion) acquisition of Red Hat, which it called “the world’s leading provider of enterprise open source software”, to help it deliver the “next-generation hybrid multicloud platform”.
This week, National Express announced it had signed an eightyear deal with Vodafone Business and IBM for cloud and digital services.
When the Leicester centre launched, there were plans to create about 300 jobs.
According to the annual report it was up to 1,160 employees last year (many working within client companies) compared with 985 the year before.
The annual report said: “These financial statements present the results for the company’s fourth year of trading, which has seen a rapid expansion in the provision of its services.
“The company provides software development, test and technical services, along with related analysis and project management services to other IBM entities.”
It was the first client innovation centre of its kind opened by the multi-national, and was followed by branches in Winchester, Thames Valley and Preston.
It now operates from more than 16 locations spread across Europe.