There are very few players in what is broadly called the IT industry today who do not have some pretensions to services.
From the humblest specialist application boutique or small reseller, to the grandest global consultancy; from the niche mobile device manufacturer, to the world's biggest hardware vendor. Most of them expect some part of the revenue they collect from their corporate customers to cover work that is beyond the mere supply of goods.
HP's services business amounts to 20% of its total sales. IBM's is a staggering 52%. Of course, there is a well established 'pure' IT services market, comprised of companies who neither manufacture any core hardware, nor do they derive significant revenue from commercial, off-the-shelf packaged software. They have either grown up as IT services companies (as Europe's LogicaCMG, America's CSC or India's TCS have done) or they have evolved out of the consulting practices of business advisory firms, as in the case of Accenture.
But now most companies from all parts of the IT sector have adjusted to the world of service provision. Few, nowadays, in economically mature markets, can just shift boxes (their own or other vendors) without adding value of some kind, and still expect to hang on to margin. Services, however the buyer and seller may define them, have become an expected part of just about every major transaction.
The question is: how do companies build and hold value for IT services if:
- their skills heritage is tied up with selling systems and
- the services business is becoming more crowded and undifferentiated every day?
The answers lie in learning to find the main points of need in the customer organisation and paying close attention to matching them to your skills and experience. And having done so, to remember that negotiating a big services/outsourcing contract is probably fraught with more variables and complexities than any pure hardware deal ever was.
