IBM, Unisys Focus on Services

Opinion: IBM and Unisys sell services first, boxes second.

With IBMs planned sale of its PC manufacturing unit to Lenovo, of China, the role of PCs at IBM is undergoing change. And as with many things at IBM, services are supplanting hardware in importance.

IBM recently announced tweaks to its "PCs as a service" offerings so that a customer can choose from a menu of items. The move should make the services more appealing to smaller businesses.

PCs as a service is not a new concept. As far as IBM is concerned, it goes back about 15 years, when IBM began servicing PCs made by other vendors. This "break-fix" support was typically extended only to big users, often those with whom IBM had significant existing relationships. That work has morphed over the years to become a standard offering of IBM Global Services for customers throughout much of the world.

The new "a la carte" offering will let customers select from 13 services, ranging from image management to anti-virus to backup and recovery. While it would seem every customer would want anti-virus services, a small customer might not want to purchase backup and recovery services, believing it could do those on its own, noted Dale Moegling, international desktop executive at IBM Global Services, in Greenville, S.C. Moegling said a customer could also add a new service in the midst of a contract—typically a three-year deal—if a new type of threat, such as spyware, should emerge.

/zimages/2/28571.gifClick here to read more about IBMs on-demand services plan.

IBM, of course, will also include its ThinkCentre desktops, if you want. The price per month, for a full helping of services and a high-end desktop, can reach $70. If you already have the desktop and just want a few services, those can be had for as little as $3 per month, per service, said Moegling.

Its the opposite of Dells business model, which starts with a hardware sale and seeks to add services to it. However, Moegling said he believes IBM can actually undercut Dells price for a similar hardware and services bundle by as much as 8 percent.

A competitor with a business model much more similar to IBMs is Unisys, which also pitches a services-first approach. A key selling point of Unisys is fighting the ever-growing array of viruses. "Theres always going to be cost reduction, but its also about improving productivity and protecting the assets. Its about anti-virus also. Were a very strong security player," said Phil Smith, global solutions director for global infrastructure services at Unisys, in Blue Bell, Pa. Then there are the needs brought on by new regulatory compliance demands. "You have to protect the data" or face stiff penalties for noncompliance, Smith said.

Unisys is also finding that the traditional desktop environment is becoming mobile. Increasingly, corporate users are working from home offices and using laptops. In some cases their business tools of choice are smart phones and tablet PCs, said Smith.

"The desktop is moving to a mobile and multidevice environment," Smith said.

Smith said Unisys has signed up the New York City Transit for desktop services and help desk services. "Its about $105 million over the initial term of five years and could go up to $143 [million] with an additional two-year option," said Smith.

Out and about

Remember Jamcracker? The erstwhile highflier of the dot-com boom years has evolved from its previous incarnation of aggregator of application service providers to become a software provider for those who want to provide software as a service.

"We lost a big chunk of our customer base because the customers just went away," said Todd Johnson, president of Jamcracker. Although the Santa Clara, Calif., company maintains a legacy-installed base from its days as an aggregator, it is selling an on-demand enablement kit and has signed up such customers as Kana.

"We turned our hosted platform into a software product. Were selling it to ISVs and service providers. The piece in the middle is really hard to build. We can shorten the delivery time of the average Web-delivered application by 270 man-months," said Johnson.

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