IBM will be focusing its Global Services first and foremost on these integration and simplification problems by using itself as an example.
"We've made some fundamental shifts in our IBM strategy in order to know how to provide value for our customers," Hennessy said. "We remixed our businesses to move to higher-value spaces; we exited commodity businesses; we acquired over 60 companies to complement our scale and portfolio over the past five years.
"At the same time, we have been really driving global integration to participate in the growth markets and improve our productivity. As a result, IBM is a much higher-performing enterprise than it was a decade ago. Our business model is much more aligned with our clients' needs and is generating better financial results," Hennessy said.
But the IT strategy has had to be tightly aligned with the overall company strategy in order to attain this, Hennessy said. "We had some fundamental IT transformations we had to go through," he said.
"For example, IBM decided to consolidate 128 CIO functions into one. We centralized 155 data centers into five strategic centers around the world. We decided we had to sunset over 10,000 legacy applications-we've gone from about 16,000 applications to under 5,000, and we still have a long way to go, but we've made some great progress there," Hennessy said.
"We've optimized our global network of skills, we've driven 31 networks down to one, so we've done the fundamental IT transformation work, and we've gotten significant cost-savings out of it. Over the past five years with the revenue growth, employee growth and the acquisitions I talked about, our IT expenditure is still down about 26 percent."
IBM absorbs this firsthand knowledge and experience about integration and takes it out to the marketplace, he said.