Tim Padden Jeff Younger IBM: Beyond Blue Tim Padden Jeff Younger

IBM entering the business consulting and outsourcing services industry “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

$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

Competitors: Accenture Ltd. Dell Inc. Wipro Technologies $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

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