IBM reorganizes hardware division by customer types

January 04, 2008|Associated Press

IBM Corp. is restructuring its hardware division around customer types rather than individual products, marking the biggest such realignment in the unit in 15 years.

In an internal memo, the head of the division, William Zeitler, said the changes would strengthen IBM's ability to sell technology to small and medium-size businesses and to design products specifically for them. IBM gets most of its business from big corporations and governments, but smaller companies' technology purchases are growing at a faster rate.

Although IBM will still report hardware revenue by product category, but the realignment will create four client segments, including one governing hardware for large organizations and a separate one for small and mid-size customers.

The third segment will focus on "industry systems" in retail, telecommunications, and healthcare, and the fourth on microelectronics, serving buyers of IBM's custom microprocessors.

Analyst Bob Djurdjevic of Annex Research said the realignment should help IBM be more in tune with smaller customers' needs.