Long gone are the days of the Big Ticket, On-Premise Hardware, Software and Service/Support Sale.
All these items were ‘bought’ out of Capital Expenditure or Revenue budgets and costs for some of the global players were in the millions of pounds. I recall selling a £2m Turnkey solution to a pharmaceutical company over 20 years ago !
IBM is believed to be scrapping 110,000 of its 430,000 workforce around the world as it is being restructured in ‘desperate’ attempt to revamp its business. It has struggled to move from manufacturing computers to Cloud Computing. (In the pharmaceutical and similarly regulated industries I prefer to use the phrase: ‘Validated Software as a Service (SaaS)’ rather than ‘Cloud Computing’).
It is suggested in the press that the company was preparing to merge its three main arms – hardware, software and support (services) – into a single operating business. It will break down the ‘Chinese walls’ between the divisions and reorganise staff.
This is because of the growing demand from businesses to use companies such as IBM as a ‘one-stop shop’ for technology needs. It is expected to restructure its entire global workforce – some 430,000 people – under a programme known as Project Chrome. IBM has struggled to shift from its traditional strength of making computers to offering IT services and information storage.
So what is a reason for the rumour of one of the potential biggest corporate lay-offs in history ?
A report by IDC in 2012 stated that there would be:
- $7 billion decline in packaged software worldwide license revenue in 2010.
- 2012: nearly 85% of net-new software firms were SaaS service.
- 2014: SaaS will account for just over half of market revenue.
- Hardware is now faster, bigger, more powerful, virtual, shared and thus cheaper. It can be rented !
- Software functionality has matured, is now readily available and works….no need to customize, support, maintain.
- Services are minimal, maybe a little configuration, training, data migration, etc. but we are talking weeks, maybe months, not many man years !
ComplianceControl Centre is an Electronic Document and Quality Management System, that can be up and running in less than 1 hour. It is a Software as a Service and can be formally Validated for regulated industries and up and running in a maximum of 5 days !
Due to our UK Technology Strategy Board funding we are well positioned in this new technological market place. The IBM news has confirmed we are on the right strategy !