New IBM Unit Will Give Customers Access To R&D Labs

IBM has formed a new business unit that the company says will for the first time give customers direct access to its vaunted research arm with an eye to helping them solve complex business problems more efficiently.

IBM's new On Demand Innovation Services group will be staffed with 200 research consultants and will receive $1 billion in funding over the next three years. "Research has always been our crown jewel, but we've kept it to ourselves," says Paul Bloom, IBM's research executive for communications industries.

Under the new arrangement, IBM research will work more directly with customers to bring advanced technologies into production more quickly, Bloom says. For example, he says, IBM research will work directly with telecom companies to determine how best to introduce natural-language voice automation into call centers, which could save the troubled industry billions of dollars. Customers will access On Demand Innovation Services through the Business Consulting group within IBM Global Services.

Much of the new group's work with customers will focus on software development, which is moving ahead of hardware as IBM's chief research focus. On Demand Innovation Services will also focus on four primary disciplines: advanced analytics, which applies computer science to business modeling; business-process transformation, which is designed to help customers align business strategy with IT investments; information integration, which aims to help customers pull together data from across their enterprise; and, finally, experimental economics. The latter will focus on bringing new economic techniques to business-model valuation.

Observers see the move as consistent with other initiatives the company has announced this year under the watch of new CEO Sam Palmisano. "We're starting to see him become very proactive in terms of finding ways to leverage IBM's internal strengths to generate sales," says Technology Business Research analyst Bob Sutherland. Palmisano announced last month that IBM would pull together a number of hardware and software projects that aim to automate business computing under a sales and research initiative dubbed eBusiness On Demand.