Computer makers vie for lucrative tech services:
Big Blue has achieved IT nirvana: 40% of sales and 48% of profits come from its huge 148,000-person Global Services division. The unit should grow 10% to $37 billion in sales in 2001.
Its latest push into services will target such big markets as health care and media. But it already tried to shift into services with its $8.4 billion purchase of DEC in `98; that move flopped.
A takeover of PricewaterhouseCoopers fell through, and much of its $8 billion service revenues are in low-margin repair. Still, HP is gaining ground, from consulting to running IT operations.
Despite hard times for this onetime mainframe giant, its services division remains strong. Outsourcing and systems integration today make up 69% of the company's $6.1 billion in sales.
Its $2.3 billion services business is geared to boosting sales of its highly profitable servers. Services include quick installation, remote monitoring, and training.