# re: Why IBM is in Trouble @ Sunday, May 28, 2006 2:20 PM

I've been in this business for over 30 years now and IBM has been in toruble before. They keep finding ways out of it though so I would *never* count them out. That being said I have also been in the services business and it is a tough one to make work. Compaq bought Digital Equipment Corp for it's services business but still fell into the clutches of HP. HP also was looking to build their profit on services and that worked so poorly that it cost their CEO her job. Services are hgh margin if, but only if, you can bring your work in on time and budget. The word "if" is a very big word in IT businesses.
I think that Microsoft has widely chosen not to make services, in terms of custom software and related, a big part of their business. It is much easier to make standard software like Windows, Office, Money, Sharepoint, etc than to sell custom software. The semi-custom software business like the Great Plains (or what ever we are calling them these days) division does is less risk by far. The margins are not quite as high as fully custom but the risks for both the customer and the selling company are less.
Coming back to IBM, they have reinvented themselves time and again. I expect they will do the same in years to come.

AlfredTwo

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