The company's major operations consists of five business segments: Global Technology
Services and Global Business Services, which the company collectively calls Global
Services, Software, Systems and Technology and Global Financing.
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 and maintenance arrangements. The Global Services backlog provides
a solid revenue base entering each year. Within Global Services, there are two
reportable segments: Global Technology Services and Global Business Services.
Global Technology Services (GTS) primarily provides IT infrastructure and
business process services, creating business value for clients through unique
technology and IP integrated services within its global delivery model. By leveraging
insights and experience drawn from IBM's global scale, skills and technology,
with applied innovation from IBM Research, clients gain access to leading-edge,
high-quality services with improved productivity, flexibility, cost and outcomes.
GTS Capabilities
Strategic Outsourcing Services: delivers comprehensive IT outsourcing services
dedicated to transforming clients' existing infrastructures to consistently
deliver improved quality, flexibility, risk management and financial value.
The company integrates long-standing expertise in service management and technology
with the ability to exploit the power of new technologies from IBM systems and
software, such as cloud computing, analytics and virtualization, to deliver
high performance, innovation and improved ability to achieve business objectives.
Global Process Services: delivers a range of offerings consisting of standardized
through transformational solutions including processing platforms and business
process outsourcing. These services 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: delivers a portfolio of project-based and managed
services that enable clients to transform and optimize their IT environments
by driving efficiency, flexibility and productivity, while reducing costs. The
standardized portfolio is built around key assets and patented software, and
incorporates best practices and proven methodologies that ensure predictive
quality of delivery, security and compliance.
Cloud Services: delivers a comprehensive set of cloud services ranging from
assisting clients with building their own private clouds, to building customized
dedicated managed clouds, to allowing clients to leverage standardized cloud
infrastructure services from the Soft-Layer and SmartCloud Enterprise+ offerings,
to creating hybrid environments linking their private and public workloads together.
This portfolio of cloud offerings spans across the GTS business lines.
Technology Support Services: delivers a complete line of support services
from product maintenance through solution support to maintain and improve the
availability of clients' IT infrastructures.
Global Business Services (GBS) has the mission to deliver predictable business
outcomes to the company's clients across two primary business areas: Consulting
and Application Management Services. These professional services deliver business
value and innovation to clients through solutions which leverage industry and
business process expertise. The role of GBS is to drive initiatives that integrate
IBM content and solutions and drive the progress of the company's four primary
growth initiatives. As clients transform themselves in response to market trends
like big data, social and mobile computing, GBS is aligning its expertise and
capabilities to address two interdependent categories of opportunity: Front
Office Digitization, which describes the markets forming around new models of
engagement with all audiences; and the Globally Integrated Enterprise, which
describes the mandate to integrate data and processes in support of the new
front-office programs, and build far more flexible information applications.
GBS Capabilities
Consulting: delivering client value with solutions in Strategy and Transformation,
Application Innovation Services, Enterprise Applications and Smarter Analytics.
Consulting is also focused on bringing to market client solutions that drive
Front Office Digitization in Smarter Commerce, Cloud, Mobile and Social Business.
Application Management Services: application management, maintenance and support
services for packaged software, as well as custom and legacy applications. Value
is delivered through advanced capabilities in areas such as application testing
and modernization, cloud application services, the company's highly differentiated
globally integrated capability model, industry knowledge and the standardization
and automation of application management.
Software consists primarily of middleware and operating systems software.
Middleware software enables clients to integrate systems, processes and applications
across a standard software platform to improve their business results, solve
critical problems and gain competitive advantage within their industries. IBM
middleware is designed on open standards, making it easier to integrate disparate
business applications, developed by different methods and implemented at different
times. Operating systems are the software engines that run computers. Approximately
two-thirds of external Software segment revenue is annuity based, coming from
recurring license charges and ongoing post-contract support. The remaining one-third
relates to one-time charge (OTC) arrangements in which clients pay one, upfront
payment for a perpetual license. Typically, the sale of OTC software includes
one year of post-contract support. Clients can also purchase ongoing post-contract
support after the first year, which includes unspecified product upgrades and
technical support.
Software Capabilities
WebSphere Software: delivers capabilities that enable organizations to run
high-performance business applications. With these applications, clients can
integrate and manage business processes across their organizations with the
flexibility and agility they need to respond to changing conditions. Built on
services-oriented architecture (SOA), and open standards support for cloud,
mobile and social interactions, the WebSphere platform enables enterprises to
extend their reach and optimize interactions with their key constituents. Smarter
Commerce software helps companies better manage and improve each step of their
value chain and capitalize on opportunities for profitable growth, efficiency
and increased customer loyalty.
Information Management Software: enables clients to integrate, manage and
analyze enormous amounts of data from a large variety of sources in order to
gain competitive advantage and improve their business outcomes. With this approach,
clients can extract real value out of their data and use it to make better business
decisions. IBM's middleware and integrated solutions include advanced database
management, information integration, data governance, enterprise content management,
data warehousing, business analytics and intelligence, predictive analytics
and big data analytics.
Watson Solutions: included within Information Management Software, Watson
is the first commercially available cognitive computing platform that has the
ability to interact in natural language, processing vast amounts of big data,
and learning from its interactions with people and computers. As an advisor,
Watson is able to sift through and understand large amounts of data delivering
insights with unprecedented speeds and accuracy.
Tivoli Software: helps clients optimize the value they get from their infrastructures
and technology assets through greater visibility, control and automation across
their end-to-end business operations. These asset management solutions foster
integrated service delivery for cloud and datacenter management, enterprise
endpoint and mobile device management, asset and facilities management, and
storage management. Tivoli includes security systems software that provides
clients with a single security intelligence platform that enables them to better
secure all aspects of their enterprise and prevent security breaches.
Social Workforce Solutions: enables businesses to connect people and processes
for more effective communication and increased productivity through collaboration,
messaging and social networking software. By remaining at the forefront of collaboration
tools, IBM's social business offerings help organizations reap real benefits
associated with social networking, as well as create a more efficient and effective
workforce.
Rational Software: supports software development for both IT and complex embedded
system solutions, with a portfolio of products and solutions supporting DevOps
and Smarter Product Development, transforming the way lines of business, development
and operations work together to deliver innovation via software.
Mobile Software: spans middleware and offers customers true end-to-end mobile
solutions across platform and application development, mobile security, and
mobile device management. Leveraging powerful analytics and usage data, customers
are provided with the ability to have more compelling interactions with their
clients and workforce, increasing touchpoints and deepening relationships. The
mobile offerings provide the ability to increase workforce productivity through
enhanced collaboration, improved knowledge sharing and increased response speed.
Systems and Technology (STG) provides clients with business solutions requiring
advanced computing power and storage capabilities. Approximately half of Systems
and Technology's server and storage sales transactions are through the company's
business partners; with the balance direct to end-user clients. In addition,
Systems and Technology provides leading semiconductor technology, products and
packaging solutions for IBM's own advanced technology needs and for external
clients.
Systems: a range of general purpose and integrated systems designed and optimized
for specific business, public and scientific computing needs. These systems—System
z, Power Systems and System x—are typically the core technology in data
centers that provide required infrastructure for business and institutions.
Also, these systems form the foundation for IBM's integrated offerings, such
as IBM PureSystems, IBM Smart Analytics, IBM PureData System for Analytics powered
by Netezza, IBM SmartCloud Entry and IBM BladeCenter for Cloud. IBM servers
use both IBM and non-IBM microprocessor technology and operating systems. All
IBM servers run Linux, a key open-source operating system, and the company is
expanding its Linux relevance further on the Power platform.
Storage: data storage products and solutions that allow clients to retain
and manage rapidly growing, complex volumes of digital information. These solutions
address critical client requirements for information retention and archiving,
security, compliance and storage optimization including data deduplication,
availability and virtualization. The portfolio consists of a broad range of
disk and tape storage systems, leveraging the breadth of IBM's software offerings,
and includes Flash storage and solutions.
Microelectronics: semiconductor design and manufacturing primarily for use
in IBM systems and storage products as well as delivering semiconductors and
related services to external clients.
Global Financing facilitates clients' acquisition of IBM systems, software
and services. Global Financing invests in financing assets, leverages with debt
and manages the associated risks with the objective of generating consistently
strong returns on equity. The primary focus on the company's offerings and clients
mitigates many of the risks normally associated with a financing company. Global
Financing has the benefit of both a deep knowledge of its client base and a
clear insight into the products and services that are being financed. This combination
allows Global Financing to effectively manage two of the major risks (credit
and residual value) that are normally associated with financing.
Global Financing Capabilities
Client Financing: lease and loan financing to end users and internal clients
for terms generally between one and seven years. Internal financing is predominantly
in support of Global Services' long-term client service contracts. Global Financing
also factors a selected portion of the company's accounts receivable, primarily
for cash management purposes. All internal financing arrangements are at arm's-length
rates and are based upon market conditions.
Commercial Financing: short-term inventory and accounts receivable financing
to dealers and remarketers of IT products.
Remanufacturing and Remarketing: as equipment is returned at the conclusion
of a lease transaction, these assets are refurbished and sold or leased to new
or existing clients both externally and internally. Externally remarketed equipment
revenue represents sales or leases to clients and resellers. Internally remarketed
equipment revenue primarily represents used equipment that is sold internally
to Systems and Technology and Global Services. Systems and Technology may also
sell the equipment that it purchases from Global Financing to external clients.