(OT)?
(I think we all agree here that NOVL could develop a strong services division..)
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Lotus turns to services to
spur growth
By Bloomberg News
Special to CNET News.com
December 12, 1998, 4:50 a.m. PT
IBM, the world's largest computer maker, in
January will unveil a new services division in an
attempt to spur growth in its Lotus Development
software unit.
The Lotus Worldwide Services and Solutions
Group will work with customers to design software
applications based on Lotus products, which help
employees collaborate on projects, Lotus said. The
group also will provide training and troubleshooting
for the products.
Armonk, New York-based IBM is concentrating
more on its booming services business, where
revenue increased 22 percent last year, to counter
slowing growth in software and hardware sales.
Lotus plans to increase the service slice of its
revenue from 37 percent this year to 40 percent by
the end of 1999.
"It's reasonable for Lotus to do this," said Amy
Wohl, president of Wohl Associates, a Narberth,
Pennsylvania-based consulting firm. "With the kind
of software Lotus sells, the revenue is in the
services."
IBM said it expects to make $7 in services for
every $1 of Lotus software it sells.
The new division also could help Lotus in its battle
against No. 1 software maker Microsoft, whose
products have been gaining on Lotus Notes and
Domino. "It might give them a competitive edge,"
Wohl said.
While the services Lotus will offer have esoteric
names like "infoglut rationalization," most involve
organizing businesses' reams of information to help
companies use them more effectively.
Lotus said will hire about 400 people by the end of
next year to bring the new division's strength up to
2,500 employees, the company said. Lotus hopes
to boost its services' sales increase next year above
the current 25 percent growth rate.
To create the new division, IBM in July began
combining existing Lotus businesses, including
Lotus Consulting. The group will give Lotus a more
coordinated services approach, said division head
Evan Salop, vice president of worldwide services,
operations and solutions. "We're going to make
sure we're not fighting over the same customer,"
Salop said.
The Lotus services arm also will work more closely
with Lotus's product division and IBM Global
Services, he said.
In adding the division, IBM must be careful not to
directly compete with its dealers and software
developers, Wohl said. "They have to figure out
how to walk the dotted line and make sure they
don't take so much of (the services business) for
themselves that there's no incentive for their
partners," she said.
Lotus will work with developers and dealers to
target a software services market it estimates will
grow to more than $7 billion by 2000, Salop said.
IBM rose 1 3/8 to 166 3/8 in late trading Friday.
technews.netscape.com
Lotus turns to services to
spur growth
By Bloomberg News
Special to CNET News.com
December 12, 1998, 4:50 a.m. PT
IBM, the world's largest computer maker, in
January will unveil a new services division in an
attempt to spur growth in its Lotus Development
software unit.
The Lotus Worldwide Services and Solutions
Group will work with customers to design software
applications based on Lotus products, which help
employees collaborate on projects, Lotus said. The
group also will provide training and troubleshooting
for the products.
Armonk, New York-based IBM is concentrating
more on its booming services business, where
revenue increased 22 percent last year, to counter
slowing growth in software and hardware sales.
Lotus plans to increase the service slice of its
revenue from 37 percent this year to 40 percent by
the end of 1999.
"It's reasonable for Lotus to do this," said Amy
Wohl, president of Wohl Associates, a Narberth,
Pennsylvania-based consulting firm. "With the kind
of software Lotus sells, the revenue is in the
services."
IBM said it expects to make $7 in services for
every $1 of Lotus software it sells.
The new division also could help Lotus in its battle
against No. 1 software maker Microsoft, whose
products have been gaining on Lotus Notes and
Domino. "It might give them a competitive edge,"
Wohl said.
While the services Lotus will offer have esoteric
names like "infoglut rationalization," most involve
organizing businesses' reams of information to help
companies use them more effectively.
Lotus said will hire about 400 people by the end of
next year to bring the new division's strength up to
2,500 employees, the company said. Lotus hopes
to boost its services' sales increase next year above
the current 25 percent growth rate.
To create the new division, IBM in July began
combining existing Lotus businesses, including
Lotus Consulting. The group will give Lotus a more
coordinated services approach, said division head
Evan Salop, vice president of worldwide services,
operations and solutions. "We're going to make
sure we're not fighting over the same customer,"
Salop said.
The Lotus services arm also will work more closely
with Lotus's product division and IBM Global
Services, he said.
In adding the division, IBM must be careful not to
directly compete with its dealers and software
developers, Wohl said. "They have to figure out
how to walk the dotted line and make sure they
don't take so much of (the services business) for
themselves that there's no incentive for their
partners," she said.
Lotus will work with developers and dealers to
target a software services market it estimates will
grow to more than $7 billion by 2000, Salop said.
IBM rose 1 3/8 to 166 3/8 in late trading Friday.
technews.netscape.com |
