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IBM: Beyond Blue

IBM: Beyond Blue. Tim Padden Jeff Younger. “IBM is changing its definition from international business machines to international business models.” –David Cearly of researcher META Group IBM entering the business consulting and outsourcing services industry

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IBM: Beyond Blue

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  1. IBM: Beyond Blue Tim Padden Jeff Younger

  2. “IBM is changing its definition from international business machines to international business models.”–David Cearly of researcher META Group • IBM entering the business consulting and outsourcing services industry • Sold PC division to China’s Lenovo Group Ltd. • Bought PricewaterhouseCoopers Consulting in 2002 for $3.5 billion • 50,000+ employees focused on business rather than pure technology

  3. $96 billion total revenues • $46 billion in services • $3 billion in business outsourcing, up 45% from previous year • Stock Price: $80.50 • Projected 12.5% gain in earnings per share this year • IBM worked with the Mayo Clinic on improving medical research • Signed $180 million, 7 year contract with Dun & Bradstreet Corp. • IBM now handles some of their credit report data-processing

  4. Competitors: • Accenture Ltd. • $15.6 billion in services • $2.2 billion in business outsourcing, up 50% • Dell Inc. • $4 billion in services • Growing 30% annually • Wipro Technologies • Based in India • Growing fast, hiring 1,400 employees per month • Slightly different strategy than IBM

  5. Diversification • IBM wants to be free of the computer industry, which is growing at only 6% annually • Entering into six new markets, including after sales service for consumer electronics, insurance claims processing, and supply chain optimization • IBM is demonstrating Moderate to High Levels of Diversification • Less than 70% of revenue comes from the dominant business (computer industry) • All of IBM’s businesses are linked together

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