IBM restructures systems division

by Agam Shah

January 3, 2008 —

With the aim to improve company performance and better meet customers' needs,
IBM on Thursday said it was realigning its Systems and Technology group around
types of clients.

Instead of product types, the newly aligned division will focus and develop
products based on the needs of customers in different segments, said Tim Breuer,
an IBM spokesman.

The restructured division will target four segments: large enterprises; small-and-medium
businesses; verticals; and microelectronics, which includes customers buying
IBM's chips.

The objective is to help customers and improve sales of IBM's products, Breuer
said. The realignment enables the division to better determine and integrate
hardware, software and services for customers, like meeting data center and
virtualization needs in large enterprises, Breuer said. That should help IBM
increase its business across the different segments, he said.

The newly aligned division will work with other divisions to better configure
products for customers in different segments, Breuer said.

The restructuring comes at a time when the Systems and Technology division
is struggling. In the third quarter of 2007, revenues for the division decreased
10 percent year-over-year to US$4.9 billion, including the divestiture of the
Printing System Division in June 2007.

IBM is delivering on its promise to focus on customer-oriented solutions that
it announced last year, said Joe Clabby, president of Clabby Analytics.

The SMB market is especially booming, and the restructuring should help IBM
cope with heavy product demand, Clabby said. IBM has struggled a bit chasing
the SMB market, but the restructuring coupled with some other recent improvements
such as better marketing should help, he said.

With the restructuring, IBM is finally putting bat to ball, though it remains
to be seen how it will play out in the long run, Clabby said.

IDG News Service