Here's an excerpt from a WSJ article today on IBM's PC division. IBM claims they now have margins as good or better than CPQ's. I included the excerpt because it may be along the same lines that EP is thinking in regard to PC hardware helping CPQ make money on the services side.
IBM's game plan is to make hardware costs, which typically account for
only about 15% of the cost of buying and operating a corporate PC, "a
nonissue," says Mr. Moffat. Then, IBM hopes to use its much-vaunted
services arm, along with a captive financing subsidiary, to win large
contracts.
These days IBM is working closely with Microsoft in the hope of becoming
a larger player in the booming Windows NT business. IBM is also letting
customers who are considering IBM products use its configuration centers
to test how well IBM hardware works with non-IBM products.
Messrs. Thomas and Moffat still face plenty of hurdles as they chase Dell
and Compaq. While both rivals sell half of their servers to new customers or
for new applications, four out of five IBM servers go to current customers.
IBM's Aptiva home computer business is ailing after a slow start in cheap
computers. And internal market research showed that IBM is still perceived
as a high-cost provider.
Still, says Mr. Thomas, "today, nothing we have is going to take six months
to fix. We are going to grow."
Making More Out of Less
IBM has cut the costs and the complexity of its PCs:
John |
