IBM Says its Future is in Services, Not Goods

TFGeditor writes "An article at Technology Review quotes IBM exec Paul Horn saying that the company's business model is shifting from goods and products to software and services. From the article: 'Horn's challenge, then, has been to take a $6 billion research organization dedicated to work that advances technology products and get it to do work that benefits service businesses. IBM is thus in the process of answering an important question for all technology companies: can corporations perform useful research in the services arena?'"

Comments

Yeah, right

[Capt'n Hector]

With billions invested in chip fabrication, they're not going to be abandoning that business anytime soon. With their name recognition in other hardware sectors, they're not going to abandon those markets anytime soon. Maybe I'm out of the loop, but when someone says "software," is IBM one of the first things you think of? I could imagine EXPANDING into software and services alongside hardware, but then we're back in the 90s selling "solutions".

short term

[goombah99]

IBM always was a goods+services company. You were not buying a bar code reader as part of how you would monitor inventory you were buying a big-blue inventory control system and if the best method for you was a bar ocde reader that's what IBM would implement for you. IBM sold instances of objects not function calls.

For IBM slightly higher Short term profits are indeed in services. since much hardware these days is commoditized.

The only reason IBM could get away with just repackaging commondity software and hardware is because they have no competition for innovation. They can just innovate in services and not worry.

But what is IBM going to do when some other company say toshiba decides to sell goods_services and some toshiba engineer invents a holographic terrabyte on a chip memory and they wont sell it to IBM. IBM is giving up its 100 year formula for why people by IBM. IBM means you have an assured path to the best service and hardware. Long term profits are in goods+services.

as the parent poster implied. This sounds like what happened to ATT and HP.