This alliance will result in hiring of a significant number of people globally by the Pune-headquartered company, which employs 9,500 people, but the investments may impact margins in the near term, its founder and Chief Executive Anand Deshpande told PTI.
He, however, said the partnership will be revenue accretive and work done on it will account for a "significant" part of its revenue in the next couple of years.
The partnership involves implementing and building the software suite for the IBM Watson IoT Platform, first launched in the third quarter of 2014, and also helping its other clients on IoT solutions using IBM's platform, Deshpande said.
Deshpande said this is a departure from the legacy outsourcing model for Persistent, where both the entities will be jointly investing in development of a platform.
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He, however, did not specify the exact number of employees it will be adding, the overall investments in the initiative and the degree of the hit on margins in the near term period as a result of the tie-up.
IoT involves connecting physical devices like television sets and washing machines to the digital world through sensors.
He said IBM has been offering IoT solutions for the last five years and created a separate division for it last January. The US-based company has also committed to invest USD 3 billion in IoT over the next four years.