IBM Exec Sees Demand Rising For IT Services - InformationWeek

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IT Leadership // CIO Insights & Innovation
Commentary
2/10/2010
01:09 PM
Bob Evans
Bob Evans
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IBM Exec Sees Demand Rising For IT Services

"We are beginning to see some action, beginning to see purse strings loosening," according to an IBM executive leading its global delivery business in India. That comment, from a Wall Street Journal article, would mark quite a turnaround from a few months ago when IBM's CFO declined to make any comment on corporate IT spending.

"We are beginning to see some action, beginning to see purse strings loosening," according to an IBM executive leading its global delivery business in India. That comment, from a Wall Street Journal article, would mark quite a turnaround from a few months ago when IBM's CFO declined to make any comment on corporate IT spending.From the Journal article:

International Business Machines Corp. expects demand for its software services to pick up in the current calendar year as clients have started to spend money on information technology projects, a senior company executive said Wednesday.

Rajesh Nambiar, IBM vice president and general manager of global delivery in India, also said in the article that while the size of IBM's software contracts has not decreased, the duration of the engagements has become shorter.

Nambiar's optimistic outlook stands in marked contrast to the position taken four months ago by IBM CFO Mark Loughridge who, during the Q&A session of an earnings call with analysts in October, flatly refused to make any comment on the state of corporate IT spending at that time.

Here's a portion of what we wrote about Loughridge and the comments he made and did not make during that earnings call four months ago in a column called Global CIO: IBM CFO Refuses To Comment On Corporate IT Spending:

IBM CFO Mark Loughridge yesterday outlined strong improvements in most of IBM's businesses, including significant growth in software at the expense of Oracle and Microsoft, but when asked if those improvements were the result of an uplift in overal corporate IT spending, Loughridge declined to address that issue. Why the silence on such a vital issue?

My guess is, it's because IBM does not see corporate IT spending stabilizing or improving, and Loughridge wanted to avoid making a comment that could only exacerbate an already-delicate situation. On the flip side, he was extremely bullish about IBM's own performance across the board-in services, software, and hardware, as well as in the company's ongoing global initiatives to continue stripping costs out of its own business.

In that context, perhaps the comments earlier today in India by Nambiar indicate that IT spending has improved to the extent that IBM executives are willing to be a bit more forthcoming about what they're seeing in the market overall.

Just last month, in IBM's most-recent earnings call, Loughridge's overall remarks included seven intriguing insights that shed considerable light on IBM's intentions in the coming year; you can read about all of those in this column: Global CIO: IBM CFO Offers 7 Key Insights In Earnings Analysis.

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