Global IT services revenue up 8.2 percent in 2008 – Gartner

by Editor 6/12/2009 10:50:00 AM
consulting jobs,tech jobs,job board
The latest study from information technology consulting firm Gartner, Inc. shows that global IT services revenue rose 8.2 percent in 2008, to $806 billion, from $745 billion in 2007. IBM remains the worldwide market leader, with 7.3 percent of the global market share, followed by HP (4.8 percent), Accenture (2.9 percent), Fujitsu (2.5 percent), and CSC (2.1 percent).

Kathryn Hale, research vice president for Gartner’s worldwide IT services group, says: “Vendors had six to eight months of ‘business as usual’ in 2008 and then approximately four months encountering the beginning of the global economic downturn, featuring widespread cost restrictions and cost reductions. The only two segments of the market that grew less than forecast were IT management and process management. This is particularly surprising, because in economic hard times the potential cost savings from outsourcing usually keeps this market segment buoyant. However, apparently buyer hesitation to commit to the long-term requirements of outsourcing agreements took precedence in 2008.”

The full report - “Market Share: IT Services, Worldwide Rankings, 2008.” – is available on Gartner’s site

Worldwide IT Services Vendors by Revenue in 2008 (Millions of U.S. Dollars)

IBM – 58,891

HP – 38,584

Accenture – 23,732

Fujitsu – 20,432

CSC – 17,112

Others – 647,172

Find the latest IT consulting jobs on our job board.

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IBM named leader for outsourcing innovation capabilities

by Editor 5/8/2009 4:08:00 PM
IBM has been named innovation leader for outsourcing in a recent study conducted by The Bathwick Group. The leading status of the global IT services company was acknowledged as part of the Bathwick Services Index of major outsourcing businesses in Europe, a quarterly IT Services research publication that was first released in 2008.

The Bathwick Group used online benchmarking and IT assessment activities to collect data from end users around the world, and declared IBM the leader for building innovation into existing large-scale outsourcing contracts.

Kate Hanaghan, Senior Analyst at The Bathwick Group, said: “Innovation in outsourcing is particularly crucial in this very tough economic climate as it can help the IT function to run more cost-effectively and more efficiently. Equally, we know that clients who work with IBM value being able to tap into IBM's deep R&D resources and broad industry expertise in order to experiment beyond the confines of traditional outsourcing agreements. Overall, IBM heads the services pack with an innovation strategy that is mature, well funded and very well received by its customers."

Dave Liederbach, IBM general manager, strategic outsourcing, added: “Innovation partnerships are a natural extension of outsourcing relationships, giving clients direct access to IBM's extended capabilities including research and development as well as our own transformation experience, best practices and lessons learned. Providing experts from IBM's vaunted Research arm to address strategic client challenges and deliver innovative breakthroughs extends the core value IBM delivers through IT outsourcing. IBM is uniquely positioned to deliver this kind of higher-value engagement.”

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IBM strengthens Information Agenda strategy, buys leading data discovery software firm

by Editor 5/5/2009 4:06:00 PM
Software giant IBM has acquired the assets of California-based data discovery software company Exeros. This move further strengthens IBM’s Information Agenda strategy and provides the company’s Business Analytics Optimization Consulting business with new capabilities.

Exeros’ software is designed to automatically discover hidden relationships between databases and to help users disentangle overwhelming amounts of information coming from different sources much faster than they would ordinarily be able to do. As a result, Exeros' technology can radically cut the expenses of data warehousing, master data management, and other data-intensive projects.

“All organizations today are faced with the daunting challenge of turning massive amounts of information into insights to guide their businesses, but many are held back by the complexity of corporate data sources,” says Ambuj Goyal, general manager, IBM Information Management. “The combination of IBM and Exeros will enable companies to more intelligently manage their data across all formats and computing platforms, creating a smarter enterprise.”

IBM will integrate Exeros within IBM's Information Management Software portfolio over the next several months.

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IBM study predicts new world financial order

by Editor 4/27/2009 4:04:00 PM
According to a survey by the IBM Institute for Business Value, 90% of financial markets executives and government officials believe the returns of the past are over. The study reveals that as the financial markets industry radically restructures, firms must adapt to a new lower-margin landscape where they will need to specialize around services that clients value rather than continuing to provide a full range of in-house offerings.

The new IBM study predicts significant consolidation in segments wrought with over-capacity such as investment banking, asset management, and wealth management. Enhanced regulation and transparency will also eliminate opacity, with previously high-margin activities becoming commoditized.

The study predicts three specific areas of specialization that are likely to emerge from the new economic condition:

  • Beta transactors: the majority of financial markets firms will concentrate on utility services (trading, asset management, etc) that provide the infrastructure required to facilitate market-making in the same way that water companies provide the reservoirs, purification processes and pipes required to deliver clean water.
  • Advisors: a smaller number of firms will concentrate on providing advice - such as wealth management or mergers and acquisitions advice.
  • Alpha seekers: a handful of private equity firms, hedge funds and boutique investment houses, none of which are 'too large to fail', will focus on generating high returns from high-risk investments.

"The three trends - towards specialization, client orientation and improved efficiency - are triggering a restructuring wave on a greater scale then ever before, eroding margins and forcing all firms to reconsider their value propositions and their core business models," said Shanker Ramamurthy, Global Managing Partner for Banking & Financial Markets at IBM Global Business Services. "The new industry will not only lack some of the great brand names of the past, but will also lack many of its past characteristics - from excessive risk taking, opacity and leverage, to massively high returns."

For some time, firms found it all too easy to make vast profits by exploiting pockets of opacity in the market and did little to refine management or control systems, to improve transparency or to connect with their clients. Respondents to the IBM survey said that improved client service and efficiency will be critical for competitive survival in a new lower-margin financial order, a finding consistent with other more mature industries. In the future, firms will need 'smarter' systems that can continuously assess their risks and returns across each line of business and adjust their business mix accordingly. At the same time these systems will also enable firms to refine client service through improved understand of profitability by business line and product as well as by individual client.

"Banks have been used to a level of volatility and business cyclicality, and are currently slashing headcount and closing business lines in order to save money, just as they have done in previous downturns. However, in the current restructuring, radical efficiency improvements will be required for survival," added Ramamurthy. "Indeed IBM's analysis suggests that the current wave of redundancies and divestitures will provide insufficient savings and that firms will need to seek further efficiency improvements of 20% or more as they face the need for a level of transformation and radical business model reform not seen in previous downturns."

Although growth is expected to be sluggish through 2012; it will depend on a firm's ability to thrive in an increasingly transparent environment. For example, hedge funds (and their prime brokerage service providers as a result) will come under severe pressure as transparency reveals that the majority of funds are not delivering on their 'alpha promise'. Meanwhile flow businesses (derivatives in particular), passive investments and infrastructure providers such as custodians, clearing firms and exchanges will grow as a result of increased transparency and a movement away from risk assumption towards risk mitigation.

In one of the most extensive surveys of the financial markets industry ever undertaken, and at a time when the industry is facing its greatest period of turmoil, the IBM Institute for Business Value surveyed 2,754 industry participants, including 1,076 individual investors and 1,678 executives and public officials, to determine how financial markets firms should prepare for the future. In a report published today entitled "Toward transparency and sustainability - Building a new financial order", it found that respondents were in broad agreement on the need to eliminate complexity and excess and move to a more transparent, sustainable market. They also agreed on the need for effective regulation not only to avoid the mistakes of the past, but also to prevent new ones in the future - but they feared that poor regulation may hinder necessary innovation.

Further findings in the report include:

  • Providers and clients are disconnected 79% of the time (what clients actually value and will pay for vs. what providers think their clients value and will pay for).
  • 80% of firms ranked themselves as moderate to poor in delivering on their brand promises of client-centricity, agility and stability (brand promises are for multiple stakeholders including clients, governments and employees).
  • Over 60% of clients believe their provider isn't acting in the best interest of the client; and nearly 60% of providers agree that they are not acting in their clients' best interest.
  • The buy side understands client behavior to a greater extent vs. the sell side - but there is still room for improvement even on the buy side.
  • Over 90% of executives and government officials believe the industry will unbundle; apparently 'wealth destruction leads to self reflection' - the industry is specializing by thinking through 1) what to do, 2) what not to do, and 3) how to specialize around what the client values.
  • When asked about the new world order, financial executives and government officials ranked as number one the need for greater transparency, second the need to address capital and liquidity and third the misalignment between firms' incentives and the needs of governments and individual consumers.
  • 70% of executives are concerned that the government will 'overshoot' and over-prioritize financial stability at the expense of innovation.

For more information about IBM go to: or about the IBM Institute for Business Value go to  

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IBM reports results for the first quarter

by Editor 4/21/2009 3:51:00 PM
IBM has posted first-quarter 2009 diluted earnings of $1.70 per share compared with diluted earnings of $1.64 per share in the first quarter of 2008, an increase of 4 percent as reported. First-quarter net income was $2.30 billion compared with $2.32 billion in the first quarter of 2008, a decrease of 1 percent. Total revenues for the first quarter of 2009 of $21.7 billion decreased 11 percent (4 percent, adjusting for currency) from the first quarter of 2008. “IBM continued to perform well in a very difficult economic environment. This was due to our long-term strategic focus: shifting into software and services, divesting of commodity businesses, and creating solutions that help clients reduce cost and conserve capital. At the same time we have a disciplined approach to cost and expense management giving us a strong financial position," said Samuel J. Palmisano, IBM chairman, president and chief executive officer.

“We are well-positioned to continue to move aggressively and leverage our strong cash performance to make the most of the opportunities that arise, including smarter planet initiatives and other strategic options. We remain ahead of pace for our 2010 roadmap of $10 to $11 per share."

IBM said that it expects full-year 2009 earnings of at least $9.20 per share.

From a geographic perspective, the Americas’ first-quarter revenues were $9.3 billion, a decrease of 7 percent (3 percent, adjusting for currency) from the 2008 period. Revenues from Europe/Middle East/Africa were $7.2 billion, down 18 percent (3 percent, adjusting for currency). Asia-Pacific revenues decreased 6 percent (3 percent, adjusting for currency) to $4.8 billion. OEM revenues were $461 million, down 34 percent compared with the 2008 first quarter. Revenues from the company’s growth markets organization decreased 12 percent (up 4 percent, adjusting for currency) and represented 17 percent of geographic revenues.

Total Global Services revenues decreased 10 percent (2 percent, adjusting for currency). Global Technology Services segment revenues decreased 10 percent (1 percent, adjusting for currency) to $8.8 billion. Global Business Services segment revenues decreased 10 percent (4 percent, adjusting for currency) to $4.4 billion. IBM signed services contracts totaling $12.5 billion, at actual rates, a decrease of 1 percent (up 10 percent, adjusting for currency), including 16 contracts greater than $100 million. Shorter-term signings were $5.5 billion, a decrease of 14 percent (5 percent, adjusting for currency). Longer-term signings increased 14 percent (27 percent, adjusting for currency) to $7.0 billion. The estimated services backlog at March 31 was $126 billion at actual rates compared with $130 billion at year-end 2008.

Revenues from the Software segment were $4.5 billion, a decrease of 6 percent (up 2 percent, adjusting for currency) compared with the first quarter of 2008; pre-tax income increased 5 percent. Revenues from IBM’s middleware products, which primarily include WebSphere, Information Management, Tivoli, Lotus and Rational products, were $3.6 billion, a decrease of 5 percent (up 4 percent, adjusting for currency) versus the first quarter of 2008. Operating systems revenues of $492 million decreased 7 percent (flat, adjusting for currency) compared with the prior-year quarter. For the WebSphere family of software products, which facilitate customers’ ability to manage a wide variety of business processes using open standards to interconnect applications, data and operating systems, revenues increased 5 percent year over year. Revenues from Information Management software, which enables clients to leverage information on demand, decreased 8 percent. Revenues from Tivoli software, infrastructure software that enables clients to centrally manage networks including security and storage capability, decreased 1 percent, and revenues from Lotus software, which allows collaborating and messaging by clients in real-time communication and knowledge management, decreased 12 percent. Revenues from Rational software, integrated tools to improve the processes of software development, increased 9 percent.

Revenues from the Systems and Technology segment totaled $3.2 billion for the quarter, down 23 percent (18 percent, adjusting for currency). Systems revenues decreased 22 percent (15 percent, adjusting for currency). Revenues from the converged System p products decreased 2 percent compared with the 2008 period. Revenues from System z mainframe server products decreased 19 percent compared with the year-ago period. Total delivery of System z computing power, which is measured in MIPS (millions of instructions per second), increased 18 percent. Revenues from the System x servers decreased 27 percent. Revenues from System Storage decreased 20 percent, and revenues from Retail Store Solutions decreased 38 percent. Revenues from Microelectronics OEM decreased 36 percent.

Global Financing segment revenues decreased 9 percent (flat, adjusting for currency) in the first quarter to $578 million.

The company’s total gross profit margin was 43.4 percent in the 2009 first quarter compared with 41.5 percent in the 2008 first-quarter period, led by improving margins in services and software. Total expense and other income decreased 9 percent to $6.3 billion compared with the prior-year period.

SG&A expense decreased 6 percent to $5.3 billion including workforce rebalancing charges of approximately $265 million. RD&E expense of $1.5 billion decreased 6 percent compared with the year-ago period. Intellectual property and custom development income decreased to $268 million compared with $274 million a year ago. Other (income) and expense was income of $304 million including a net gain of $298 million relating to the sale of certain elements of the company’s logistics process, compared with income of $125 million from a year ago. Interest expense decreased to $136 million compared with $178 million in the prior year.

IBM’s tax rate in the first-quarter 2009 was 26.5 percent compared with 27.5 percent in the first quarter of 2008, a decline of 1.0 point.

The weighted-average number of diluted common shares outstanding in the first-quarter 2009 was 1.35 billion compared with 1.41 billion shares in the same period of 2008. As of March 31, 2009, there were 1.32 billion basic common shares outstanding.

Debt, including Global Financing, totaled $31.0 billion, compared with $33.9 billion at year-end 2008. From a management segment view, Global Financing debt decreased $1.0 billion from year-end 2008 to a total of $23.4 billion at March 31, 2009, resulting in a debt-to-equity ratio of 7.0 to 1. Non-global financing debt totaled $7.6 billion, a decrease of $1.9 billion since year-end 2008, resulting in a debt-to-capitalization ratio of 42.4 percent from 48.7 percent, which reflects the adoption of SFAS No. 160 referenced in the Consolidated Statement of Financial Position.

IBM ended the first quarter of 2009 with $12.3 billion of cash on hand and generated free cash flow of $1.0 billion, up $450 million year over year, excluding Global Financing receivables. The company returned nearly $2.5 billion to shareholders through $675 million in dividends and $1.8 billion of share repurchases. The balance sheet remains strong, and the company is well positioned to take advantage of opportunities.

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IBM launches new consulting unit for business analytics and optimization services

by Editor 4/15/2009 4:30:00 PM
IBM has launched a new consulting organization that will offer advanced business analytics and business optimization.

A recent study by IBM’s Institute for Business Value reveals that half of all business executives do not have access to information in their organization that they need to do their job. It also shows that eight out of ten business leaders make important decisions with missing or untrusted information.

IBM Business Analytics and Optimization Services will draw on the company's deep expertise in vertical industries, research, mathematics and information management to help clients both improve the speed and quality of business decisions while better understanding the consequences and business outcomes of those decisions.

This is the first time IBM Global Business Services has launched a new service unit since it was formed in 2002, following the acquisition of PricewaterhouseCoopers Consulting.

The IBM Business Analytics and Optimization service line is helmed by Fred Balboni, who previously led IBM’s retail industry consulting business, and a team of analytics experts in five core areas: Strategy, Business Intelligence and Busines Performance Management, Advance Analytics and Optimization, Enterprise Information Management and Content Management. More details are available here:

Frank Kern, senior vice president of IBM Global Business Services, says: "Our clients understand they're operating in a competitive environment where more than ever before, in addition to being fast, they have to be right. That requires something beyond the traditional notion of 'sense and respond. That drives the need to speed business decisions, understand the consequences of any decision and predict outcomes with more certainty -- in short, moving to a new level of enterprise intelligence."

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IBM wins contract from Sainsbury's to transform retailer's supply chain network

by Editor 4/9/2009 3:19:00 PM
IBM has signed a five-year agreement with Sainsbury's to transform the retailer's supply chain network. IBM will help Sainsbury's further enhance its customer experience by implementing new systems which aim to heighten stock availability for customers.

The new IBM solution, which is based on the Wesupply network and visibility application, aims to provide an effective platform to help Sainsbury's and its approximately 4,000 suppliers find smarter ways of managing overall supply chain performance to support the continued growth of the business.

With large stores offering around 30,000 products, the IBM solution will allow Sainsbury's to monitor the status of orders across its entire network and manage the availability of products. The Wesupply service will allow information flows to be streamlined and greater visibility of real-time supply chain performance will be provided to heighten stock control.

"To support our continued growth, we were looking to enhance our collaboration with suppliers without a significant increase in cost, while continuing to introduce greater intelligence into our supply chain, explained Tim Goalen, of Sainsbury's. "With a thorough understanding of the solution and services required, and after a detailed review of the market, we chose the IBM and Wesupply solution."

IBM will provide business consulting services to manage the establishment, implementation and maintenance of the Wesupply services which are to meet the requirements of a large supplier network such as Sainsbury's. IBM will then manage the migration of suppliers onto the systems, providing Sainsbury's with enhanced communication across its network. As part of this migration, Sainsbury's will be transitioning its EDI VAN service to Inovis. With hundreds of Sainsbury's suppliers already using Inovisworks, the VAN service fits very well within the IBM solution. "Visibility of stock and collaboration with suppliers are key aspects of Sainsbury's vision of success, making the transactional platform a critical element of their operation," said Justin Suter, Retail Supply Chain Leader, IBM Global Business Services. "Utilising its retail expertise IBM is committed to working with Sainsbury's to achieve this vision and develop smarter solutions that benefit the continued growth of its business."

"We're delighted to be part of the solution and providing Sainsbury's with the tools to enable increased visibility with suppliers," added Bob Godfrey, CEO, Wesupply.

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IBM wins IT Infrastructure Services contract with The Carphone Warehouse

by Editor 4/1/2009 4:03:00 PM
IBM has signed a multi-year information technology infrastructure services contract with Europe's leading mobile phones retailer, The Carphone Warehouse.

For the duration of the contract, IBM will manage CPW’s IT requirements and provide the company with infrastructure services across its service desk, servers, storage, desktop, network and data centre environments.

"IBM has a long and successful track record in the infrastructure area, and I am confident that this alliance will offer lasting benefits such as increased service levels and efficiency improvements to our business," said Simon Post, CPW’s Chief Technology Officer.

Bruce Ross, General Manager, IBM Global Technology Services in the UK and Ireland, added: "The Carphone Warehouse will leverage IBM's global leadership in technology innovation and delivery. As organizations face an accelerating pace of change, innovation is becoming a critical factor in the drive to deliver customer value. This agreement will help Carphone Warehouse to continue to expand their core business and drive cost efficiencies."

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IBM and KANA roll out new Service Experience Management solution

by Editor 3/26/2009 4:32:00 PM
Customer service solutions leader KANA Software, Inc. and IBM have announced a major milestone in the rollout of their Service Experience Management (SEM) strategy, first announced in 2008.

Under the terms of an OEM contract, with IBM, KANA has completed the integration of IBM’s Service Oriented Architecture (SOA) Foundation and DB2 database software into its core Service Experience Management solution, KANA Service™.

KANA Software, Inc. is a global multi-channel customer service solutions company. It offers solutions that allow businesses to deliver consistent service across all channels, including email, chat, call centers, and Web self-service, giving their customers the freedom to choose the service they want, how and when they want it. The clients, which include about a half of the Fortune 500 companies, have reported double-digit increases in customer satisfaction, while reducing call volumes by an average of 20%.

Expanding on the traditional OEM model, IBM is offering Independent Software Vendors (ISVs) such as KANA additional support beyond that of a typical OEM agreement by providing sales force alignment, technical integration, support in reducing development cost, and quicker time to value for joint customers.

As part of this strategic relationship, KANA solutions are standardized and optimized on IBM hardware and software to offer the highest levels of performance and ease of management. The new solution will enable companies to design and deliver ideal service experiences that drive customer retention and cost savings. KANA Service is scheduled for release in the second quarter of 2009.

KANA Service is designed for companies that must deliver superior customer service in the face of limited resources, increased competition, and constant business change. KANA Service enables organizations to easily deliver the ideal Service Experience based on customer profile, business context, and cost constraints. The solution gives customer service executives unprecedented control over the end-to-end Service Experience -- enabling them to adapt to change in minutes, not months, and make customer service a strategic differentiator for their business.

KANA Service is built on IBM’s market-leading SOA and Information Management foundation, which breaks down traditional barriers to integration. IBM’s SOA foundation puts an end to painful point-to-point integrations, enabling “information on-demand” by simply connecting applications once to the middleware layer.

Rob Thomas, IBM’s Worldwide Vice President of Business Development for Information Management, said, “KANA and IBM have worked closely over the past year to develop a new Service Experience Management solution, combining the latest customer service capabilities from KANA with market-leading SOA and Information Management middleware from IBM, along with a joint go-to-market plan. Our partnership is a model of how ISVs can take advantage of IBM’s software solutions and resources.”

“In today’s economic climate, Service Experience has become the differentiating factor in highly competitive industries,” said Michael Fields, chief executive officer, KANA. “Companies need a new generation of customer service solutions that will allow them to adapt quickly to economic and competitive pressures. The KANA SEM solution incorporates IBM software and will enable companies to deliver optimized, one-to-one Service Experiences in an ever-changing business environment. We continue to work closely with IBM to bring our SEM solution to market in the second quarter of 2009.”

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IBM consulting to open four new offices in China

by Editor 3/24/2009 4:29:00 PM
IBM China's consulting unit plans to open four new offices in the country over the next 12 months. IBM expects its consulting business in China to almost double in size in this period and the new offices will be able to satisfy the increasing demand coming from local businesses, in spite of the economic crisis.

Marc Chapman, the general manager of IBM Global Business Services (GBS) said: "We believe it's vital to be close to your clients,” adding that IBM’s business consulting unit currently serves over 100 clients in China. Many of these clients have decided to hold off expanding their businesses until the crisis is over and are instead focused on integration.

"We are very supportive of finding areas where we can really provide support, add value to either the government or companies,” concluded Chapman.


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