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Article

Title: IBM Shares Its Secrets

Author: Kirkpatrick, David Article Type: Product Analysis
Source: FORTUNE, v152 n5 p128(6) Publication Date: Sep 5, 2005
  ISSN: 0015-8259
  Illustrations: Graphs
URL of Publication: http://www.fortune.com

IBM's decision to give away some of its technology is not entirely altruistic, based on comments from Sam Palmisano and other leaders in IBM. Interviews with IBM execs indicate a strategy that challenges such contenders as Wipro directly by taking the low-cost model back at them and also includes an aspect that is highly original and bold. Success or failure will determine whether IBM gets a boost in profits or weaken its status as the leading IT company. In short, IBM expects the giveaways of software, patents, and ideas to make the whole industry expand faster and to provide a climate in which new frontiers will open up. IBM has responded to the threat to its services business from India was reflected in unexpectedly weak 1Q2005 earnings, and IBM also eliminated 14,500 jobs, primarily in Europe. The New York Times has also reported its possession of a memo indicating that IBM will hire 14,000 people in India, but IBM says that number is excessively large. India presently also has the largest number of IBM employees outside the U.S., having recently pushed ahead of Japan. Palmisano reorganized services in July and made Bob Moffat one of three executives who will run the unit. Moffat will find efficiencies, and the other two execs will be in charge of delivery of services to clients.

Special Features: Graphs

Companies:
IBM Corp

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India

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