IBM: Beyond BlueTim PaddenJeff Younger

“IBM is changing its definition from international business machines to international business models.” –David Cearly of researcher META Group

IBM entering the business consulting and outsourcing services industry

Sold PC division to China’s Lenovo Group Ltd.

Bought PricewaterhouseCoopers Consulting in 2002 for $3.5 billion

50,000+ employees focused on business rather than pure technology

$96 billion total revenues $46 billion in services $3 billion in business outsourcing, up 45% from

previous year Stock Price: $80.50 Projected 12.5% gain in earnings per share

this year IBM worked with the Mayo Clinic on

improving medical research Signed $180 million, 7 year contract with Dun

& Bradstreet Corp. IBM now handles some of their credit report data-

processing

Competitors: Accenture Ltd.

$15.6 billion in services $2.2 billion in business outsourcing, up 50%

Dell Inc. $4 billion in services Growing 30% annually

Wipro Technologies Based in India Growing fast, hiring 1,400 employees per month Slightly different strategy than IBM

Diversification IBM wants to be free of the computer industry,

which is growing at only 6% annually Entering into six new markets, including after sales

service for consumer electronics, insurance claims processing, and supply chain optimization

IBM is demonstrating Moderate to High Levels of Diversification Less than 70% of revenue comes from the dominant

business (computer industry) All of IBM’s businesses are linked together