Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications

    IBM Divides to Conquer

    By
    Stan Gibson
    -
    February 21, 2006
    Share
    Facebook
    Twitter
    Linkedin

      There comes a time when size alone is not enough. IBM Global Services reached that point last year when IBM Chairman and CEO Sam Palmisano divided the unit, which is responsible for $47 billion of IBMs $91 billion in revenue, into three pieces.

      The units and their leaders are: Enterprise Business Services, headed by Ginni Rometty; Integrated Operations, led by Bob Moffatt; and IT Services, under the hand of Mike Daniels. The three report to Palmisano.

      “We are three people with different backgrounds and capabilities. A single person cant run a business of this magnitude. I dont know that individual,” Moffatt said.

      One analyst said the new structure makes sense.

      “One thing is for sure: IGS had become too big to stay as one entity. Thats beyond debate. What can be debated is how to break it up. What Sam Palmisano did last spring is kind of creative,” said IBM watcher Bob Djurdjevic, president of Annex Research, in Phoenix.

      Another analyst voiced skepticism.

      “These three pieces are each bigger than most companies. Each one is a complicated business to run and a difficult business to reap good profit on,” said Linda Cohen, an analyst at Gartner, of Stamford, Conn.

      “Aside from the fact that it may confuse the customer, it is a difficult way to manage the company internally.”

      Cohen added that a single leader from IGS may emerge. “Lets see which one rises to the top,” she said.

      Although the IGS structure appears well-suited to address the trend of customers to multisource—or select best-of-breed outsourcers—Rometty said the multisourcing trend may be as much an invention of consultants imaginations as it is a real-world phenomenon.

      “If Im a client, how am I going to do my finance and accounting processes? Do I really want to distribute those among different people?” asked Rometty.

      “For finance and accounting, would I like to work with the same person whos going to help me transform the process—and put the applications in place to support the process—who may have some very interesting analytics, which we use IBM research a lot for?”

      Following this thinking, from IBMs point of view, ideally the Enterprise Computing Systems unit would serve as a channel for the others.

      Customers would start at the top with business transformation outsourcing then work down to application development and data center management.

      Indeed, Moffatt said IGS executives, as one might expect, are given monetary incentives to bring other IBM units into deals.

      Nonetheless, Moffatt and Rometty said they are willing to let the customer be the boss—if a customer wishes to go a la carte, then so be it.

      One analyst said she suspects few customers follow the pattern of business transformation first, then application development, followed by infrastructure management.

      /zimages/1/28571.gifRead more here about IBMs arsenal.

      “Customers ask if its not just McKinsey plopped on top of an outsourcing deal,” said Julie Giera, an analyst at Forrester Research, of Cambridge, Mass.

      “There are some deals like this, but customers are multisourcing on an increasingly frequent basis. Like General Motors, they want multiple suppliers all delivering pieces and parts. Customers want traditional outsourcing based on price.”

      Pointing out the difficulty of making consulting work with outsourcing, Giera noted that IGS rival Electronic Data Systems had acquired McKinsey-style consultancy AT Kearney, only to spin out the unit last year.

      Until something like that happens at IBM, IGS is the industrys only source of business transformation, IT outsourcing and application development components, which can all work together in concert—or not.

      /zimages/1/28571.gifCheck out eWEEK.coms for the latest news, reviews and analysis about productivity and business solutions.

      Stan Gibson
      Stan Gibson is Executive Editor of eWEEK. In addition to taking part in Ziff Davis eSeminars and taking charge of special editorial projects, his columns and editorials appear regularly in both the print and online editions of eWEEK. He is chairman of eWEEK's Editorial Board, which received the 1999 Jesse H. Neal Award of the American Business Press. In ten years at eWEEK, Gibson has served eWEEK (formerly PC Week) as Executive Editor/eBiz Strategies, Deputy News Editor, Networking Editor, Assignment Editor and Department Editor. His Webcast program, 'Take Down,' appeared on Zcast.tv. He has appeared on many radio and television programs including TechTV, CNBC, PBS, WBZ-Boston, WEVD New York and New England Cable News. Gibson has appeared as keynoter at many conferences, including CAMP Expo, Society for Information Management, and the Technology Managers Forum. A 19-year veteran covering information technology, he was previously News Editor at Communications Week and was Software Editor and Systems Editor at Computerworld.

      MOST POPULAR ARTICLES

      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      IT Management

      Intuit’s Nhung Ho on AI for the...

      James Maguire - May 13, 2022 0
      I spoke with Nhung Ho, Vice President of AI at Intuit, about adoption of AI in the small and medium-sized business market, and how...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×