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IBM to grow its software and services business

March 7, 2006

In February, IBM announced that it plans to increase its overall investment in data management an additional US $1 billion, in a bold move to build a profitable services and software business out of helping enterprises better manage their data.

IBM said its plan is being driven by a number of trends: Hardware that’s getting increasingly supercomputer-like, improved software-related capabilities for accessing data, pressure from new data-drenching technologies such as radio frequency identification (RFID) and an overall desire by business leaders to improve usage of information throughout their enterprises.

IBM sees a solid business reason for the investment. Steve Mills, an IBM senior vice-president and Software Group executive, said customer demand for information management-related software and services is expected to give the company “double-digit” growth in those areas.

“We believe we are at a turning point relating to the leveraging of information,” Mills said.

In addition to its spending plans, IBM will boost its staff dedicated to this issue by 65 per cent, or from 15,000 to about 25,000.

Joining Mills were some customers, including Wachovia Corp. CIO Joe Monk and Panasonic Corporation of North America CIO Robert Schwartz. Both men said they see data management as the top IT issue for improving business processes.

Schwartz said his company has been heavily involved in improving its information management. He said replacing methods such as spreadsheets, e-mails and even faxes for sharing information has improved product time to market by months.

Schwartz predicted that RFID is the “next driving force,” but he said it also will bring new challenges.

“Think about the massive amount of information that will be generated,” said Schwartz, who added the competitive advantage will belong to those companies that learn to use their data.

Monk said IBM’s plans are relevant to the direction Wachovia is taking. The financial services company has spent the past two years focusing on integrating applications.

“How are we managing that data, how are we bringing that data to the right people, in the right place, at the right time, are all part of what I think is core” to the effort, Monk said.

Source: IT World Canada