IBM Restructures Struggling Systems Division

IDG News Service — With the aim to improve company performance and better meet customers' needs, IBM said it was realigning its Systems and Technology group around types of clients.

Instead of product types, the newly aligned division will focus and develop products based on the needs of customers in different segments, said Tim Breuer, an IBM spokesman.

The restructured division will target four segments: large enterprises; small-and-medium businesses; verticals; and microelectronics, which includes customers buying IBM's chips.

The objective is to help customers and improve sales of IBM's products, Breuer said. The realignment enables the division to better determine and integrate hardware, software and services for customers, like meeting data center and virtualization needs in large enterprises, Breuer said. That should help IBM increase its business across the different segments, he said.

The newly aligned division will work with other divisions to better configure products for customers in different segments, Breuer said.

The restructuring comes at a time when the Systems and Technology division is struggling. In the third quarter of 2007, revenues for the division decreased 10 percent year-over-year to $4.9 billion, including the divestiture of the Printing System Division in June 2007.

IBM is delivering on its promise to focus on customer-oriented solutions that it announced last year, said Joe Clabby, president of Clabby Analytics.

The SMB market is especially booming, and the restructuring should help IBM cope with heavy product demand, Clabby said. IBM has struggled a bit chasing the SMB market, but the restructuring coupled with some other recent improvements such as better marketing should help, he said.