Story: Who'd have thought... Tech predictions you wouldn't bet on
Posted by: Mr X. (Thursday 30 October 2003, 8:48 PM)
"Services are the spearhead" - Lou Gerstner.
Services for IBM are the keystone. Of the three major segments (Services, Hardware, software), Services is the fastest growing , but as you point out, the lowest margin. Why doesn't IBM just sell it off and raise its margins? Because IBM knows how to link services with its other segments. In addition to being a very large and profitable business in its own right (relative margins aside), IBM Global Services is the #1 delivery mechanism for all the other IBM kit. Without IGS, IBM Hardware and Software will wither. With IGS, IBM is a self-fulfilling engine.
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