Hieb sees more strength from IBM on the services side, particularly with the acquisition of PricewaterhouseCoopers, a major consulting firm that "gives IBM a solid group of experts in the health care market." But even there, he said, "so far I am underwhelmed with what they have done with that group."
Still, no one can dispute the potential for growth, regardless of the competitive obstacles. In the post-genomic era, learning how to harness the newly available genetic information to develop more effective treatments for human diseases has triggered an unprecedented quest by life sciences companies and academic research centres.
Information technology is an essential partner because it enables researchers to match up the thousands of chemical compounds that companies have in their databases with "targets" -- places on a gene -- they could affect. For example, genes that go awry can cause cancer, so the goal is to find potential drugs that could interrupt this process.
Moreover, information technology is playing a key role in identifying cost-effective treatments at a time when health care has become a top issue for politicians, employees, hospitals, doctors and consumers. An important goal is "information-based medicine," which combines a patient's individual profile -- including genetics -- with treatment data to achieve personalised medical care.
As in its business with other specific industries, IBM doesn't provide applications to customers; that is left to a wide variety of specialised partners. Rather, Big Blue aims to combine its hardware systems, R&D prowess and huge services business to develop unique health care packages.
Big spender
Augen said IBM had spent $150m to $200m establishing partnerships and alliances by 2002. That was on top of $100m in venture capital investments made to gain access to cutting-edge start-ups. For example, he said, the company put $10m into a biotech fund run by Burrill & Co., a San Francisco merchant bank.
Despite all this investment, IBM still wasn't winning a lot of pharmaceutical business. Even though IBM in 1999 had proudly unveiled Blue Gene, a supercomputer dedicated to analysing the human genome, the company wasn't making many life-science equipment sales.
Talkback
IBM will throw their weight around, and make progress.