By Timothy Prickett Morgan
Having long since figured out that e-business is going to be the big driver in its hardware and software businesses, IBM’s Global Services unit is pinning its hopes for continued growth on the e-business star now as well. IBM GS yesterday announced that it would be launching a worldwide network of e-business innovation centers located in the business districts of the world’s major cities. These centers, IBM hopes, will put its most talented e-business experts as well as employees with experience in systems and software integration at the disposal of companies seeking to transform themselves into e-businesses.
Companies like USWeb/CKS, Scient Corp and Razorfish have all made names for themselves in the e-business space, growing from simple corporate web design to implementation of multi-million dollar e-commerce systems. IBM thinks that its expertise in the services business, especially in host integration, will give it an advantage when the great unwashed in corporate America and Europe add web front ends to their existing systems, which more times than not are running on an IBM host with IBM systems software. Whether or not this actually plays into IBM’s hands remains to be seen, but it is certainly clear at this point that IBM Global Services, like IBM’s Server Group, has been riding a budgetary tidal wave powered by Y2K remediation and ERP installations. If the division wants to grow – IBM has already warned investors that services business growth will probably slow in the coming quarters – IBM Global Services will have to position itself as an e-business vendor, just as much as Sun Microsystems and Hewlett- Packard have to.
You don’t have a graphic artist design your house, so why would you have a web designer build your e-business, explained Doug Elix, senior vice president at the Global Services division, at yesterday’s announcement. Elix says that this year companies will spend $327bn out of $1 trillion on various IT services, and that Global Services is the biggest provider of outsourcing, systems integration, business strategy, application hosting and e- business services. The biggest in each one of those categories individually, that is, as well as together. He says that IBM, which has had 10,000 e-commerce engagements so far, generates more e-business services revenue than all the name-brand web design houses put together. I don’t believe that there’s any other company in the world that can do this. We are absolutely unique, says Elix. He says that the shortage of IT professionals, which he estimates runs to over 1 million personnel worldwide, is what will make Global Services generally attractive to corporate IT shops who want to get on the web or build intranets and extranets, and that its new metropolitan e- business centers will be particularly attractive because it will essentially emulate the fast-paced, web savvy design companies populated by young, smart people that IBM’s competitors have by virtue of the fact that they are generally founded by young, smart web savvy people. Moreover, IBM’s e-biz centers will be located near business centers and universities (and presumably affiliated with them in the long term), which IBM hopes will spur innovation and collaboration among its experts, developers and customers.
To give its corporate customers a place to meet its web and e-biz rocket scientists, IBM is expanding its existing multimedia center in Atlanta and re-designating it as an e-business innovation center. The Atlanta center has over 400 e-biz specialists and has been involved in over 1,000 e-business engagements this year. IBM has already setup similar centers located on the outskirts of Dallas and Chicago (which will be located downtown soon). The e-biz center in Washington DC will be co-located with an existing center for government services, and the center in Boston will be located in the Lotus HQ in Cambridge. An e-biz center for Los Angeles will open in February or March smack in the middle of the block between Sony and MTV. A center will be opened on Whitehall Street in New York’s financial district. IBM Global Services plans to open similar centers in metropolitan areas in the UK and Germany, to be followed by centers in Italy, France, Canada and Asia/Pacific.
In addition, IBM Global Services has signed alliances with a slew of e-biz and web specialists who have expertise that it does not. The Coleman Group, part of the Interpublic advertising conglomerate, has inked a deal to help IBM’s customers in the consumer packaged goods area to polish up their brands for the web. OgilvyOne, another e-biz brand specialist, is collaborating with IBM in the auto and pharmaceutical businesses. AnswerThink, an internet consulting company, will help IBM’s customers in the financial services, retail, auto and healthcare markets with interactive branding as well. Internet Research Group, a web research and marketing strategy firm, will work with IBM’s customers to assess their markets and planning processes. RGA Interactive, an interactive media company that specializes in kiosk and broadband media, will work with IBM’s customers in the media and entertainment markets as well as with all clients who have an interest in broadband and pervasive distribution of Internet content. And finally, the web tools from net.Genesis, DoubleClick and Net Perceptions will be integrated with IBM’s own Net.Commerce storefront software.
