IBM can lead Silicon Valley out of recession, according to an article in the Economist.
The technology market has gone through wrenching changes since every big firm in America dreamed of becoming a dotcom (or feared being devoured by one). Technology no longer sells itself simply because it is new. Real power is flowing to those firms that have begun to work out not what to sell, but how to sell it…IBM’s answer to this problem was its purchase, last July, of PwC Consulting.
By packaging business consulting with IT, IBM now hopes to sell its customers full, all-singing, all-dancing, business “solutions”, rather than vague promises about the benefits of new hardware or software.
IBM hopes that from these consulting engagements will cascade demand for its software, hardware and systems specialists. From the customer’s perspective, however, IBM is now selling something quite differenta commitment to improve a specific part of the business, with payment more clearly linked to results. The famously weak accountability of consulting and IT should improve. As Steve Milunovich of Merrill Lynch put it recently, the customer now has one throat to choke.
So, the next big thing may “not to be a technology at all, but a better way to make it work.”