IBM reels PC division back in

IBM reels PC division back in

The drop in worldwide PC sales has been so severe for IBM that the company will soon integrate its PC sales division back into its normal sales and distribution channel, eliminating it as a stand-alone unit, according to a confidential, internal IBM memo.

The re-organisation means far more than the loss of some 150 jobs, a source familiar with the memo said. Globally dispersed IBM PC salespeople, who currently report directly to Big Blue's top man in the US PC sales division, John Judge, will soon report to their nearest IBM Sales and Distribution office, be it in North America, Europe, or Asia/Pacific, the source said. PC orders will then be processed through those regional offices.

The move reflects a change in priorities for IBM regarding the importance of PC sales vs. the sales of other technologies, such as servers and software.

The IBM source said the brisk corporate PC sales of the past have always justified maintaining a stand-alone PC sales division for IBM, but that such justification "was a thing of the past."

No jobs will be cut in the Asia Pacific region, according to a spokesperson at IBM Australia, who said the re-organisation was an internal change that should have little or no effect on customers and partners. "PCs are still an integral part of IBMs business," the spokesperson said.

Roger Kay, an industry analyst with IDC, believes that while IBM will benefit from cost cutting, the effect for customers should be transparent.

"From a user point of view, the only difference is you're talking to the front end of the beast all the time," Kay explained. "The idea is that the geographic regions are now going to have the responsibility for the front end of the operations of the PC group [within IBM]. This is a re-org that has some cost savings, because they do reduce some redundant functions in the field. That does mean some layoffs, but also it's really more about getting leverage out of the IBM infrastructure."

The global re-organisation of IBM's PC sales division also reflects the growing trend toward solution-oriented approaches, in which entire business technology platforms are delivered to companies instead of piecemealing them together one individual product at a time.

Kay said this solutions approach from IBM should continue to win PC sales for Big Blue.

"[IBM is] on the solutions sales side of things. If you're the grand guru that can solve some enterprise's problem, then you can probably have most of the sales," Kay said.

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