Martino Speaks Out On IBM's Move To Buy PwC Consulting
IBM Global Services IBM PwC Consulting
"I do not believe there is cause for concern here," Martino told CRN this morning. "My hope is that as we continue to communicate with our partners" about the deal that they will be reassured that IBM still wants to work with them even as its own in-house services arm grows exponentially.
IBM said yesterday that it is plunking down $3.5 billion in cash and stock for PwC Consulting, namely for the CRM, SCM and outsourcing expertise its consultants bring to the table. Some 30,000 PwC Consulting staffers are expected to move to IBM under the deal.
While some solution providers expressed concern that IBM Global Services, already a key competitor, is getting even bigger, Martino said that IBM is sticking by its pledge to pass leads on businesses with $100 million or less in annual revenue to its integration and consulting partners.
"The first partner opportunity we have with our partners is a classic reseller arrangement, and this move [to buy PwC Consulting doesn't change that opportunity," Martino said. "The second model is an asset-based model, which fundamentally is our services [people supporting our partners" with software, expertise or some other resource, he said.
Partners in the second group, in fact, "should be delighted" about the PwC deal, Martino said, considering the expertise in Microsoft, PeopleSoft, SAP and Siebel technologies that PwC consultants bring to bear.
The third category, partners who engage in teaming agreements with IBM Global Services, also stands to benefit, Martino said. He cited IBM partners Sirius Computer Solutions and Results International as examples of the few specialized partners with whom IBM's consulting arm teams.
Such companies in this third group "have unique capabilities" in wireless application development and other areas that add to IBM Global Services' overall portfolio of skills, Martino said. "Together, we can go farther than we can separately."
IBM Global Services has already had layoffs this year, but Martino said that constant "balancing of resources" is necessary, and the PwC acquisition does not run counter to 2002's head count reductions.
The assets of PwC will be combined with IBM Global Services' Business Innovation Services group, which handles consulting, systems integration and business transformation, into a new unit to be headed by Ginni Rometty.
Rometty, who now serves as general manager of IBM Global Services' Americas division, will report to Doug Elix, senior vice president and group executive of the group.
"We have never been about just consulting," Martino said. "Our differentiator, our strategy, is [building end-to-end solutions to provide business value. That is that this new unit will do."