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

2. 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

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. 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

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