IBM's New Attitude

By Brian P. Watson Print this article Print

IBM is a favorite among customers looking to work with one vendor.

Through new pricing options and better coordination between sales and support staffs, IBM has made a cultural shift to become a better partner, say some customers.

Bob Burger, vice president of technical services with Fifth Third Bancorp, worked with Big Blue to automate the Cincinnati-based bank's transaction systems. Fifth Third decided to go with a service-oriented architecture—tying together disparate applications for reuse and repetition— because it allowed Burger and his team to tie together existing systems. Burger says his team picked IBM WebSphere and mainframe products because of their proven track record and infrastructure capabilities.

Burger also says IBM has recognized that mainframe talent is sparse within its customers' workforces. To help Fifth Third, IBM sponsored training for his staff through a local university. As Burger puts it: "I think they're a little more self-aware of their limitations."

Fifth Third completed the project in late 2005. Eight months later, Burger says the company had saved $20 million by redistributing computing resources instead of buying additional hardware or software (he wouldn't say what the project cost). And Fifth Third signed a licensing agreement with Big Blue that included credits for training and consulting—options that hadn't existed previously. "They've been surprisingly more competitive than I ever thought they would be," Burger says.

Sandy Carter, vice president for service-oriented architecture and WebSphere strategy and marketing at IBM, says Big Blue's new approach was prompted by the rapid expansion of SOA and customer requests for more training resources.

For J.P. Kichak, chief information officer of University of North Carolina Health Care, IBM's lower prices and improved support were key selling points. Five years ago, UNC Health Care, a four-hospital system in Chapel Hill, N.C., moved from a thick-client application for storing and accessing health records running on Microsoft Windows to a Web-based system running on IBM's WebSphere. Kichak says he went with IBM because of its collaborative style and track record for delivering on promises.

Kichak says he's noticed IBM cutting prices in recent years and backing its products with more effective support, both of which, he says, made IBM an easy choice: "I'm going to go where I get the best deal and the most support."

Sometimes IBM wins because it's the proverbial one-stop shop. In 2004, the University of Pittsburgh Medical Center began an eight-year, $400 million project to standardize its entire information infrastructure on IBM products, including WebSphere, says Paul Sikora, the vice president of information technology transformation. IBM worked aggressively, Sikora says, to begin converting more than 800 systems. So far, he says, the project has saved $1 million in licensing costs and $750,000 a year in maintenance fees.

Vijay Sonty, chief information officer of Broward County Public Schools in Florida, this summer expects to launch a portal to let administrators, teachers, parents and students access records and educational resources, part of a four-year, $20 million project. Sonty says IBM's WebSphere platform was scalable and secure, and was less proprietary than the SAP and Microsoft applications it was using.

And IBM's consulting services, while expensive, were a welcome element for Sonty and his team, which needed help learning the new technology. "They're taking this integrated approach," Sonty says. "In the past, it seemed like the right arm didn't care what the left arm was doing." IBM's Carter says Big Blue has realized it needed to have a more unified effort from sales to support.

IBM: At A Glance

New Orchard Rd.
Armonk, NY 10504
(914) 499-1900

EMPLOYEES: 330,000

Sam Palmisano
Chairman & CEO

Steven A. Mills
SVP, Software

PRODUCTS: The WebSphere family of products includes an application server, enterprise service bus, portal and messaging tool. The suite of software runs and integrates business applications, and can provide a framework for a service-oriented architecture.

Reference Checks

UNC Health Care
J.P. Kichak

Broward County Public Schools
Vijay Sonty
(754) 321-0399

University of Pittsburgh Medical Center
Paul Sikora
VP, I.T. Transformation

Fifth Third Bancorp
Bob Burger
VP, Technical Services


2006FYTD 2005FY 2004FY
Revenue $20.66B $91.13B $96.29B
Net income $1.71B $7.93B $7.48B
R&D spending $1.46B $5.84B $5.87B
* Fiscal year ends Dec. 31; YTD represents three months ended April 30, 2006.

This article was originally published on 2006-07-13
Associate Editor

Brian joined Baseline in March 2006. In addition to previous stints at Inter@ctive Week and The Net Economy, he's written for The News-Press in Fort Myers, Fla., as well as The Sunday Tribune in Dublin, Ireland. Brian has a B.A. from Bucknell University and a master's degree from Northwestern University's Medill School of Journalism.

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