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IBM to invest $1 bn for "info-on-demand" practice

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CIOL Bureau
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Yinka Adegoke

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NEW YORK: IBM will invest $1 billion to develop software and recruit thousands of consultants over the next three years to expand its business of making corporate information more accessible to office workers, the company said on Thursday.

The world's largest computer services company is dedicating 15,000 existing consultants to the drive to help steal a march on rivals such as Microsoft Corp., Accenture Ltd and Electronic Data Systems Corp.

It will grow this base by 65 percent, or 9,750 people, globally over the next three years. Most of those will come from outside the company, Michael Schroeck, a partner in IBM Business Consulting Services, told Reuters.

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Computer services company BearingPoint Inc. and Web search leader Google Inc. on Tuesday said they would form a corporate consulting practice to apply Google's search techniques inside businesses.

Analysts say these software and services companies are among dozens betting on the market for "information-on-demand," which applies Web techniques to help companies struggling to manage inside and outside their organizations.

"All the big system integrators should be nervous," Forrester analyst Barry Murphy said. "If I was Accenture or EDS, I would be concerned because this puts IBM in a position to have the most experienced services force out there."

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To deliver on the promise of speedier access to information, International Business Machines Corp. is bringing together its software and consulting businesses to help clients cope with globalization, mergers and regulatory compliance.

IBM Business Consulting Services was created shortly after IBM bought PWC Consulting three years ago for $3.5 billion.

The new effort marks a major refocusing of the division, executives said. Over the past year, IBM has been organizing worldwide centers that combine IBM researchers, programmers and sales support staff from groups that had operated separately.

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Schroeck said the new consultants will focus on corporate governance, managing the flow of corporate data and business performance management, among various areas.

"It's about bringing the structured and unstructured information in an organization together, analyzing the information and delivering it to the right people in the organization when they need it," Schroeck said.

IBM wants to exploit the scale of its business to compete with rivals, some of which have software technology expertise while others have consulting and services staff, but none of which have all the pieces which IBM can offer.

"(These systems integrators) still need to partner with IBM because IBM has some very strong software products - they are going to be forced to walk the fine line between partnership and competition," Murphy said.

"It's a bold move," IDC analyst Henry Morris agreed.

"(IBM has) made significant investments in technologies surrounding information on demand. But the technology investment doesn't make sense unless they are also making investments around a practice to help organizations deploy the technology to deliver the information where it's needed."

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