IBM's New Services WinsIBM reminds everyone that the best margins are in services; On Demand message absent

by Demir Barlas
IBM has signed three new services deals, with Danish telecommunications company TDC, Australian financial data and services provider Fiserv, and aluminum building product manufacturer YKK of Japan.
The Fiserv contract is worth $38 million. The value of the other deals was not disclosed, although it's a fair bet that, given the market's increasing distaste for high dollar, high risk deals, they are not massively different in scale than the Fiserv deal. One proof point, in the TDC instance, lies in the circumscribed nature of the deal and TDC's use of other service providers. "While TDC is using IBM to manage its ERP applications, it's keeping the management of its OSS/BSS applications internal, through the use of TDC Services. This is where Capgemini comes in, providing inexpensive labor to TDC Services," noted analyst Dominique Raviart of Ovum Senior Analyst at Ovum.

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But the monetary value of the deals isn't of sole importance here. More to the point, the deals serve as a reminder that, during a time in which IBM is getting squeezed in certain segments of middleware and hardware, the expertise and breadth of the company's services remains an irreplaceable and highly profitable (contrasted to, say, the personal computer business) part of the Big Blue mystique.
Previously, the services message was tied very closely to IBM's On Demand message but, in a fascinating omission given the amount of money and energy IBM has put into messaging, the phrase "on demand" did not seem to appear in any of IBM's press material surrounding the new deals.