Accenture, ranked third globally, has been IBM's lone credible rival in India with a count of 35,000 India hands. IBM says it hires according to customer requirements but rivals and industry insiders say it has set an ambitious target of 100,000 employees in India by end-2008. A director at a top three software services firm likens IBM to a cyclist among a bunch of long-distance runners. ''It suddenly just pedals away,'' he says, requesting anonymity. ''Six billion dollars is a staggering amount of money; no [technology] company has talked this scale in India,'' says Sudip Banerjee, president of Wipro's enterprise solutions division. ''If anyone can do it, IBM can.''

How will the $6-billion IBM investment pan out? The company lists ''increased resources, including hiring and train- ing; infrastructure costs (facilities, real estate, taxes); capital expenditures to support IBM and client requirements; and expansion of our software development in India'' as the important heads under which the money will be spent.

Big Blue—a nickname that stuck with IBM because of its large, blue mainframe computers of the 1960s— has established over 25 centres in India across Bangalore, Chennai, Gurgaon, Kolkata, Pune, Hyderabad and Mumbai.

The India investment plan is key to IBM's global financial targets. The megacorp aims to grow its $8.65 billion earnings 10%-12% in the years ahead on slower revenue growth goals of 6%-8%. ''Specifically, by moving more of its services delivery and support to lower-cost countries and increasing integration between its various geographies, IBM is targeting total net savings of $300-400 million dropping to the bottom line,'' Goldman Sachs & Co managing director Laura Conigliaro wrote in a Tuesday report.

IBM expects its global services business—which accounts for more than half Big Blue's $91 billion total revenues—to be the lead segment driving its topline. Of its suite of services, 'business transformation services' driven out of low-cost locations like India will grow two to three times industry rates, Mike Daniels, senior vice-president of IBM's global technology services told analysts at the Big Blue's analyst conference in Bangalore this week.

The advantages are clear: most of the 43,000 IBM-ers are engaged in servicing overseas clients and the process of shipping work to a low-cost location like India will continue in the next few years when nearly a third of Big Blue's employees work from Indian shores. Average costs of an IBM employee is less than $1,000 a month, a fifth of median US tech wages. Rising Indian worker costs will chip away at this offshore advantage but a $4,000 monthly differential is a huge gap to cover and will take time.

Analysts attending the Bangalore schmooze-fest were less sanguine and picked holes in the company's topline targets. ''That ($ 6 billion) is a big number. You got to take it with a grain of salt,'' says John MacCarthy, Forrester Research Inc's vice president of Asia research. ''If they have already invested $2 billion and let's say they are going to double to $4 billin, then they are going to have 80,000 people. I don't see where they are going to get at $6 billion.''

MacCarthy could be right. Unlike homegrown majors, IBM and Accenture have been primarily growing by making hires of experienced workers. Companies such as TCS, Infosys or Wipro, in contrast, have almost entirely hired fresh technology—and, increasingly, science—graduates and training them for up to three months. Such a strategy helped the companies hire in thousands that the tech and back office industry needed to meet booming demand.

Industry insiders the foreign service firms' 'lateral hires' strategy may not be sustainable in the years ahead. India's technology and call centre worker pool is over a million. Says the software firm director: ''Hiring from the existing pool can be a tough act to keep going in the long run. Eventually, these (foreign) companies will have to get into training big time.''

According to recruitment firms, salaries at foreign tech and BPO employers are as much as 20%-25% more than at remuneration at their Indian counterparts.

And, it will not be easy for foreign firms like IBM to get into training workers in large numbers. ''Large Indian companies run universities on campuses,'' says Wipro's Banerjee. The company has a 75-strong permanent faculty, 30 managers who actively interact with trainees and visiting teaching staff. The net result: at any given point in time, Wipro has 3,000 workers in its training rooms. The numbers are similar or higher at Infosys and TCS.

The other option, then, for IBM could be acquisition-led. McCarthy predicts that IBM could go on an acquisition spree. ''I don't think they are going to physically build out $6 billion in India,'' he says. ''With $6 billion, they may not get it the top three (Indian software houses) but somewhere between top three and ten among the players.'' Indian software's top three companies are valued between $15 billion and $20 billion leaving them out of reach for even an acquirer of IBM's size.

IBM's chief financial officer Mark Loughridge focus on the company's acquisition experience at a presentation in Bangalore led Merrill Lynch to wonder if buyouts may accelerate ahead, analyst Richard Farmer wrote to investors on Wednesday.