IBM 2009 Annual Report Download - page 24

Business Model
The company’s business model is built to support two principal
goals: helping clients succeed in delivering business value by
becoming more innovative, efficient and competitive through the
use of business insight and IT solutions; and providing long-term
value to shareholders. The business model has been developed
over time through strategic investments in capabilities and tech-
nologies that have the best long-term growth and profitability
prospects based on the value they deliver to clients.
The company’s global capabilities include services, software,
systems, fundamental research and related financing. The broad
mix of businesses and capabilities are combined to provide busi-
ness insight and solutions for the company’s clients.
The business model is flexible, adapting to the continuously
changing market and economic environment. The company con-
tinues to divest commoditizing businesses and strengthen its
position through strategic investments and acquisitions in higher
value segments like business analytics, smarter planet and cloud
computing. In addition, the company has transformed itself into
a globally integrated enterprise which has improved overall pro-
ductivity and is driving investment and participation in the world’s
fastest growing markets. As a result, the company is a higher
performing enterprise today than it was several years ago.
The business model, supported by the company’s long-term
financial model, has enabled the company to deliver consistently
strong earnings, cash flows and returns to shareholders in chang-
ing economic environments.
Business Segments and Capabilities
The company’s major operations comprise: a Global Tech nology
Services segment; a Global Business Services segment; a Soft-
ware segment; a Systems and Technology segment; and a Global
Finan cing segment.
Global Services is a critical component of the company’s strategy
of providing IT infrastructure and business insight and solutions
to clients. While solutions often include industry-leading IBM
software and systems, other suppliers’ products are also used if
a client solution requires it. Approximately 60 percent of external
Global Services segment revenue is annuity-based, coming
primarily from outsourcing, maintenance and custom application
management services arrangements. The Global Services back-
log provides a solid revenue base entering each year. Within
Global Services, there are two reportable segments: Global Tech-
nology Services and Global Business Services.
Global Technology Services (GTS) primarily provides IT infra-
structure services and business process services, delivering
business value through the company’s global scale, standard-
ization and automation.
GTS CAPABILITIES
Strategic Outsourcing Services. Comprehensive IT outsourcing
services dedicated to transforming clients’ existing infrastruc-
tures to ensure better quality, cost control, adaptability, security
and compliance. IBM integrates long-standing experience in
service management, technology and industry applications with
new technologies, such as cloud computing and virtualization,
to enable new capabilities for clients.
Business Transformation Outsourcing. A range of offerings from
standardized processing platforms and Business Process Out-
sourcing through transformational offerings that deliver improved
business results to clients through the strategic change and/or
operation of the client’s business processes, applications and
infrastructure.
Integrated Technology Services. Project-based portfolio of ser-
vices that enable clients to optimize their IT environments by
driving efficiency, flexibility and productivity, while reducing costs.
The standardized portfolio is built around key assets and pat-
ented software, and incorporates best practices and proven
methodologies that ensure predictive quality of delivery, security
and compliance.
Maintenance. A complete line of support services from product
maintenance through solution support to maintain and improve
the availability of clients’ IT infrastructure.
The GTS outsourcing businesses are supported by integrated
worldwide delivery organizations:
Integrated Technology Delivery (ITD) is responsible for worldwide
service delivery supporting the Strategic Outsourcing business.
It manages the world’s largest privately-owned IT infrastructure
with employees in over 40 countries, supporting over 450 data
centers. ITD operates a globally integrated delivery model which
supports regional client-facing teams by utilizing a global net-
work of competencies and centers. Each competency provides
industry-leading, standardized, integrated tools and processes.
By leveraging IBM’s global scale, skills and technology which is
combined with the innovation from IBM research, clients gain
access to leading edge, high-quality services with improved pro-
ductivity, flexibility and cost.
Business Process Delivery (BPD) provides highly efficient, world-
class delivery capabilities in IBM’s business process delivery
operations, which include Business Transformation Outsourcing,
Business Pro cess Outsourcing and Business Process Services.
BPD has employees and delivery centers in over 40 countries
worldwide.
Global Business Services (GBS) primarily provides professional
services and application outsourcing services, delivering busi-
ness value and innovation to clients through solutions which
leverage industry- and business-process expertise.
22