IBM's results reflect shift in IT spending

AMR Research views IBM's mixed 1Q05 financials as an indication that IT spending is increasingly influenced by Line-of-Business (LOB) involvement in IT buying decisions. The analyst firm conducted a spending survey recently which found that 49% of business executives make the final purchase decision for software to support their LOB.

AMR Research views IBM's mixed 1Q05 financials as an indication that IT spending is increasingly influenced by Line-of-Business (LOB) involvement in IT buying decisions. The analyst firm conducted a spending survey recently which found that 49% of business executives make the final purchase decision for software to support their LOB. Here is how the shift is reflected in the IBM results:

  • WebSphere has a very strong quarter, with revenue up 11%. WebSphere is the IBM technology for integrating applications and is its platform for business application support.

  • Within IBM Global Services, their transformational outsourcing service revenue grew by 40%. Transformational outsourcing services work with LOBs and deliver technology-aided business process improvements.

  • Also within IBM Global Services, bookings for the Engineering and Technology Services (its outsourced product engineering service) were up more than 90%, reflecting the trend for businesses to outsource more core product developing in order to accelerate new product delivery.

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