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IBM Getting PwC Consulting for $3.5 Billion
MoThugz writes: "This Yahoo! News article reports that IBM will be buying PriceWaterhouseCoopers Consulting for a cool $3.5 billion in cash and stock. From the page: 'The purchase is aimed at boosting slowing revenues in the computer giant's large services business, which now accounts for more revenue than its well-known computers and mainframes. ... The merger gives IBM, the world's largest supplier of computers and computer services, the consulting arm of PriceWaterhouseCoopers, the world's largest accounting firm. The combined IBM-PriceWaterhouseCoopers will rank a close second to top consultant Accenture Ltd. , formerly Andersen Consulting.'"
This sort of thing really creeps me out. I mean, from a business standpoint I'm sure it makes sense, but it also seems to be the next step in the sorts of things Karl Marx was describing. We already have a media cartel and a software monopoly. Now we have IT corporations buying up consultancies?
Does this freak anybody else out at all?
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Bleah! Heh heh heh... BLEAH BLEAH!!! Ha ha ha ha...
These figures are off the top of my head, please correct me if wrong.
Consulting made up ~25% of IBM's 18 Billion in revenue last year. It's been a significant part of IBM for a long time and many credit the consulting arm of IBM for pulling IBM through the '90s. IBM is *much* more than a harddrive manufacturer or computer hardware company.
If you have a hard time understanding this, put it this way... IBM was the Microsoft of the 60s, 70s, and 80s. Back then, Computers were mostly for *accounting* and various services that you would hire consultants for. IBM took advantage of this and became big. I question Microsoft, because after ~10 years as a substantial Monopoly, they haven't successfully branched into another area and their largest competition is given away for free.
Anyways, I figured a consulting explanation was in order for anybody who wants to post a *WHY WOULD IBM BUY A CONSULTING FIRM?* comment.
BTW, does anybody know what happened to the name "Monday"? I thought PWC consulting was changing it's name to "Monday". Am I wrong?
Bringing irony to the Slash-masses
This acquisition makes perfect sense. Just as corporate security requires much more than just securing the computers, offering business solutions requires more than just offering hardware and software. When IBM's clients are faced with a business problem, IBM can now offer not only hardware and software, but solutions for the tax angle, the public relations angle, etc. My guess is that they've been looking to do something like this for a while, and now there's a 60% off sale going on at the NYSE.
Indeed. I've seen the same pattern myself (and I even worked for a time at a company that pulled that kind of scam).
The only thing I'd add is that most of these companies have pet technologies that must solve every problem. At one company I worked for this resulted in half a dozen aging Novell servers that worked perfectly well being replaced with about two dozen massive NT4 servers that were horribly unstable. Our wonderful NDS tree that was a pleasure to administer was replaced by unmanagable 'domains' with complex trust relationships that nobody understood.
At the consulting company I was working for, Tivoli was the 'one true solution' for everything (you can guess the company). Clients were conned into buying Tivoli agents for everything. It's amazing how expensive these agents can get. Then of course you need more of their expensive consultants to configure the resulting mess.
What I've learned is that consultants have their place, but you have to keep them under a tight reign. Give them specific, well scoped projects with well-defined deliverables. Do use them for specific skills that you don't have in-house, or extra manpower when you don't have enough staff for a specific project. Never let them define the goals, scope, or technology to be used.
It is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail. - Abraham Maslow
Last year HP tried to buy PWC, the deal ended because the price was too high, something like $18 Billion. Now that HP has merged with Compaq and has all of the Compaq nightmares IBM buys PWC for $1.5 Billion.
Carly must be dieing right now.
"The poet presents his thoughts festively, on the carriage of rhythm; usually because they could not walk" Nietzsche
these big IT consulting firms are only as good as the clowns they put on your project. In my career so far, i've been involved in 3 major projects involving "Big 5" consultants. Often, you get graduates with little experience under their belt.
Their answer to this is that their employees are able to draw on a vast and global pool of knowledge.
I think that's bollocks.
IMHO you should stop for a moment and think why these now big consulting companies are so big. Do you really think all their clients are really stupid people?, because all these consulting firms are really expensive. I don't think it is realistic thinking that all these firms could charge that much if their clients didn't see any real benefit from their services. This doesn't mean, of course, that some projects end badly, bad I don't think it is the most general case.
I'm quite fed up with this bad attitude against the big consulting corporations. I've worked with some small consulting companies, and many times I have seen just a bunch of code monkeys, unable many times to compromise with the client or take the responsibility for the project when it is needed.
IMHO again, the reason why many times the big companies go for the services of the big consulting firms, is just because they know they are not able to accomplish their objectives by themselves.
And finally, the big consulting and the small and freelance consulting worlds are not very far away. I know people who has crossed borders in both ways.
I once talked to a very high level consultant working for one of the big consultancy firms, at a bar. He told me this,
"Look at there business and come up with the most complicated solution, and describe it in the most vague and unintelligible way you can. Make sure to use lots of big technical words,especially trendy ones, feel free to make up entirely new terminology to desribe everyday things. For instance a gateway is now a "Inter/Intra network liason device", and a router is now a "packet traffic management switching and delegation processing unit." Do not spell out clearly how to implement your plan. If the business does well, take all the credit. If not, claim they did not implement your plan correctly, and that it is their own fault for leaving out the most "critical" piece of your solution."
That was from a guy I knew in Philly who made 7 figures a year, and that he employed the strategy on all consultant gigs from management, to manufacturing and IT.
Could Jesus microwave a burrito so hot, that he himself could not eat it? HS