Wheeling and Dealing
'Tis the season for courting small business deals.Tis the season for courting small business deals. Or, if you are IBM Global Services or EDS, that could be shortened to just "small deals." eWEEK reported on Jan. 23 how EDS is completing a makeover that will enable the IT services provider to accept smaller contracts and not rely on multibillion-dollar deals. Likewise, IGS is ready to make a dealany dealwrites Executive Editor Stan Gibson. IGS, which accounted for half of IBMs $91 billion in 2005 sales, has hit a wall. Revenue decreased by 5 percent in the fourth quarter, and Wall Street punished IBM stock last year for less-then-stellar earnings reports primarily due to slowing services growth. CEO Sam Palmisanos solution was to try something many of his customers are already doing when it comes to IT services: diversify.
Rather than confront potential customers with a united, albeit intimidatingly large, front, Palmisano divided IGS into three core competencies: Enterprise Business Services, Integrated Operations and IT Services. The trick with IBMs version of multisourcing, as it is with customers, is trying to find the right mix, and not getting in its own way. As Dave Berry, CIO of cosmetics maker Coty, asked, "How does IBM go to itself and negotiate lower prices?"