IBM Services Chief Steps Down As Rivalries Ramp Up

Mike Daniels, an executive who played a prominent role in IBM’s services strategy and came very close to becoming the company’s CEO in 2011, has left the company. The Register reports that he has retired.

Daniels, who joined Big Blue in the 70s’ after earning his bachelor’s degree in political science, climbed up the corporate ladder to become the head of the IT giant’s Global Technology Services unit. He was one of the execs nominated to replace former CEO Samuel J. Palmisano after the latter’s departure in 2011, but it was Ginni Rometty who eventually landed the highly-contended promotion.

Here’s some more background on the now former services chief for one of the biggest provides in the industry:

“Daniels ran Global Technology Services, which provides traditional outsourcing, system integration, and break-fix maintenance services for hardware and software. In July 2010, when Palmisano restructured IBM to prepare for his eventual retirement, Rometty was put in charge of IBM’s Sales and Distribution organization, which controls its direct sales and channel distribution, and Daniels was given full control of Global Services.”

IBM is serious about services, and not just its own portfolio. The company is funneling a lot of resources into its massive ecosystem of resellers and system integrators with the intent of boosting value-added services. More value means more customers buying IBM iron, even if a local firm is supplying the talent to deploy it.

Big Blue’s emphasis on services is emulated by many of its peers, including Dell. The hardware giant is making a transition from PCs to enterprise in an effort to increase its margins, and consultancy is as profitable as it gets. Our very own Saroj Kar wrote a thorough piece about Dell’s graduated shift to selling data center equipment and professional know-how last week.

Rivalries heating up big time from the competition.  We are seeing the competition targeting IBM big time.  HP is banking on their services team to lead the turn around.  EMC a company with presence in all the big companies with big iron storage but not much in services has been quietly gaining big share in the Services market.  Oracle continues to try to milk the old way with the monolithic software and hardware model.

IBM has a big lead and their financial performance is kicking up dust in the face of the competition.