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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?'"
As products mature, it becomes more and more difficult to diferentiate yourself from your competitors. That translates to lower profit margins. IBM is simply recognizing that. The question becomes, will their services fall into the same trap? Or can they continue to specialize and keep profit margins up.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
I feel that in IT, in most cases, services are the goods.
Who's going to do R&D and develop new products? Seems like everyone is getting out of the development business and going into the patent holding/suing one.
Coder's Stone: The programming language quick ref for iPad
Hasn't IBM been earning more than half its revenues from services for over a decade? And they're just getting around to announcing it now?
More news: Microsoft has announced they're going to be a software company. GM is showing some interest in making cars. Walmart is going to start selling stuff.
Why doesn't Slashdot ever get slashdotted?
Of course, if IBM has decided to full-on push their consultants, it might help them to find a few who aren't complete morons. Based on my experience, IBM is well on their way to becoming the new Anderson.
Every year during my review, I just pray the words "slashdot.org" aren't mentioned.
Gotta love the spyware contained in the article.
Avenue, A Inc. Whatever that is.
Google has been conducting its research extensively in the services area. Google labs contains a plethora of useful services Google's researching, with new ones coming almost every month. A few ones that interested me: Google sets allows users to enter a few items (apple, banana, orange) and Google will find more from that set (pear, kiwi). Google ride finder allows you to find taxis and limousines by tracking their positions in realtime. All of these services are available to the public so Google can get feedback on their "research".
Also, if anyone watched the Masters golf tournament they saw at least 10 commercials for IBMs consulting services. After seeing them buy up all of that expensive advertising time the conclusion is simple: IBM believes that services are the future and they are getting a jump on the competiton with advertising dollars, marketing generalizations and dare I say "slashvertising."
I don't keep a lid on my coffee so when I walk around I look busy -me
I recall been told some years back (around 2000 give or take) that for a long time IBM Global Services was the only division that was profitable on a consistent basis. Even back then the writing was on the wall for the PC group (which had not shown *ANY* profit for years before, and up till its sale was still unprofitable.)
Gotta love the spyware contained in the article. Avenue, A Inc. Whatever that is.
Nothing for me, using Firefox 1.0.2. Then again, I'm also using AdBlock and FlashBlock, so maybe they're filtering out the bad stuff.
Go Firefox, go.
" Unless IBM wants to focus on competing with the ever growing chinense and other low cost manufactures they have no choice but to get out of hardware."
That is only the Intel/AMD market. How much value added can you do with the Intel/AMD platform? They all have sound. They all have IDE and now SATA. They all have USB. You may be snazzy and add Firewire. Now in the PowerPC market IBM can add value. Look at the Cell, G5, and Power series. IBM simply does not want to be a me too company selling cheap PCs anymore.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
And, in other news, the 3M (Minnesota Mining and Manufacturing) Corporation announces that it doesn't really do much mining these days either.
Want to improve your Karma? Instead of "Post Anonymously", try the "Post Humously" option.
Open-Source may help drive even the biggest software company toward a service model, by putting downward pressure on the market-determined price of software licenses.
A Seattle Times review of Microsoft's Linux lab boss ends with a comment by IDC's Al Gillen: "...open-source software is going to help drive the acquisition cost of software down toward zero," he [Gillen] said, a shift that will require software companies to move "over to a maintenance and support model."
"Pluged in to Microsoft's biggest rival" - Seattle Times (May require no-cost signup to view.)
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They can expand their R&D and with no real axe to grind they can secure that new and needed standards gets approvel quicker. Their interest is the quality of the standard that they can then offer their clients as a new service.
Take a look here and you will get a good feel for the Future IBM
Help fight continental drift.
An excerpt from A Nation of Salesmen, by Earl Shorris:
I saw that selling, in all its forms, has achieved dominion over the world in our time, not only determining the economic spirit of the nation but deeply affecting its social, political, cultural, and moral life. I saw that America has become the land of the salesman, Homo vendens, who is both dangerous and afflicted.
Under the dominion of Homo vendens, we are no longer free to know the world. The salesman now informs us. In the mix of mind and matter that is perception, the information comes not from our senses encountering reality but from the salesman. Thus we have lost the world.
-- -pjk Perry Kundert perry@kundert.ca http://kundert.2y.net
We still use Notes in a worldwide corporation that has over 25,000 seats.
We use ZOS, OS/400 & AIX and have done so for the last 10+ years, with no downtime caused by OS failure. In fact I can only remember one outgage caused by these servers, somebody ignored some disk pack erorrs when they should have called the engineer for a replacement. Needless to say said person was lucky to keep their job and was on probabtion for 6 months.
We use DB/2 and have never ever lost a record or had any downtime caused by DBMS failure.
We use MQSeries and have never ever lost a transaction or had down time caused by messaging software fail.
So prehaps you might wish to think a little larger when looking at IBM software. In fact it's hard to think of another company which provides such high quality enterprise software. The downside is cost measured in many many $$$$.
Whoa... wait a second. Isn't efficient production of goods *the whole point* of outsourcing? I know you don't mean to say Taiwan doesn't know how to produce electronics efficiently or Japan doesn't know how to produce cars efficiently do you?
What I mean to say is that Taiwan is efficient at producing electronics because American companies created the processes to efficiently create those electronics.
Well, you have me there. We are the bread basket of the world here in America... though that might have something to do with those farm subsidies.
I mean that we are the leading developer of geneticly engineered seeds and plants that would make growing plants in Africa possible. if you eliminated the subsidies from the US, then Africa, India and China would all be able to compete with the US in Food Production. (See below for why this is important)
Besides, farming and factory work is as much an honest days work as setting a bone or designing a wing that is 0.3% more efficient that the one we had last year. Is a profession less noble when it doesn't require a university degree? I don't think so. Furthermore, I think it's condescending and snobbish to suggest otherwise.
Hey now. Lets not go putting words into my mouth. My inlaws grew up on farms and I am humbled every time I meet someone who works 16 hours a day to feed their family. That said, working in a service profession almost always translates to more free time and a higher salary (the major components in any quality of life measurement)
Now for the importance of a global food market. This is going out on a limb, but I really believe it is true. If we eliminated US farming subsidies and allowed farmers to get a fair price for their crops at the market, we would eliminate a large part of the world's poverty. I think you would find that most economists would agree with this statement. Because many terrorism experts would tell you that poverty is one of the major friends of terrorism recruitment, I think eliminating farm subsidies would solve a large part of the worlds terrorism problems by drying up the channels of young, poor men.
Now I know...I just said farmers who want subsidies are terrorists. And that is ABSOLUTELY not true, but that's my argument and I'm sticking to it.
I tried for 5 years to come up with a clever sig...only to realize that I am not clever.