IBM to invest $1b in ‘on demand’ services group

ARMONK, N.Y: IBM Corp. has said that it was creating a 200-person services group within its research division to help bring new technology directly to its customers. IBM will put $1 billion into the division, called On Demand Innovation Services, over three years. The group will specialize in technology that can help improve business performance, such as real-time computing.

The goal is for researchers who are part of the group to spend about one-half of their time with customers working on solving their problems and the other half on research, according to Alfred Spector, vice president of services and software in the research division.

IBM's 3,440 researchers are located in eight laboratories from India to New York and work on everything from developing database algorithms to trying to find a technology to eventually replace silicon as the foundation of microchips.

Chief Executive Samuel Palmisano unveiled recently a strategy for IBM, and a new marketing campaign, that focuses on on-demand computing, which includes letting people pay for as much technology as they need and software that enables companies to run more efficiently.

The services group will work closely with the company's business consulting services division, which includes PriceWaterhouseCoopers Consulting. IBM bought the consulting arm of the No. 1 accounting firm in October, adding 30,000 employees.

IBM, which sells computers and related hardware, software and services, gets the largest portion of its revenues from the services business.

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