IBM reorg: A sign of things to come

Acknowledging that vertical solutions trump horizontal technologies, the company's System Technology Group will market its products based on software, solutions, and industry contexts.

Last week, IBM System Technology Group (STG) announced its plans for a reorg . Historically, STG was organized around five hardware "brands" (i.e. mainframe, storage, microprocessors, etc.), but this led to customer confusion and channel overlap. What's more, IBM found its salespeople competing with each other in the field. Something had to give.

IBM, the company that practically invented business computing, will now market its systems in a software, solutions, or industry context. To me, this is an indication that the rules of the technology game continue to evolve into a model where vertical solutions trump horizontal technologies. In the old days, everyone had a General Ledger so you could sell hardware and software across industry. Now everything is customized, specialized, and integrated. Tech companies (especially hardware firms) are being forced to pick their industry battles and partnerships more carefully than ever before.

IBM isn't the only firm moving in this direction. Cisco Systems sells communications solutions, not switches and routers, these days, and EMC continues to build a company focused on data governance, management, and security, not just storage. But IBM is now pushing this model beyond marketing programs and into field sales operations. Look for others to follow soon.

Tech Culture
About the author

    Jon Oltsik is a senior analyst at the Enterprise Strategy Group. He is not an employee of CNET.


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