Rivals Pessimistic About IBM-PwC Deal - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.


Rivals Pessimistic About IBM-PwC Deal

Hewlett-Packard, once a PwC suitor, says it has been approached by the consulting firm several times throughout the past year, even as recently as two weeks ago.

Competitors reacted swiftly and negatively to the news that IBM plans to buy PwC Consulting in a deal worth $3.5 billion.

Hewlett-Packard, once a PwC suitor, says it has been approached by the consulting firm several times throughout the past year, even as recently as two weeks ago. (In November 2000, HP backed out of a deal to buy PwC for $18 billion.) But now Juergen Rottler, a VP at HP, says that even at a more attractive price, it no longer fits with HP's strategy as it once would have.

"At the end of the day, most customers have relationships with the partner more than the company," Rottler says. "IBM will be very busy convincing the partners that it's a good deal for them, and the partners will be busy convincing the customers."

And from the "glass houses" corner, Mitch Hill, CEO of Avanade Inc., the joint venture between Microsoft and Accenture, says CIOs should be cautious about vendor bias in dealing with the new consulting business. "We can safely say that any independence PwC would have had is compromised," he says, adding that his firm isn't affected in the same way because it doesn't sell products. Most of Avanade's customers "usually engage us because they want to do something" with Microsoft, he says.

The $3.5 billion deal is IBM's largest acquisition, but it's a bargain-basement price considering that PwC's projected revenue for 2002 is an estimated $4.9 billion. As for the criticism by the competition, John Connolly, general manager of the strategy and change practice at IBM Global Services, seems unfazed: "We were delighted to be able to do this deal, and HP can respond to it" as it will.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
2020 State of DevOps Report
2020 State of DevOps Report
Download this report today to learn more about the key tools and technologies being utilized, and how organizations deal with the cultural and process changes that DevOps brings. The report also examines the barriers organizations face, as well as the rewards from DevOps including faster application delivery, higher quality products, and quicker recovery from errors in production.
How to Create a Successful AI Program
Jessica Davis, Senior Editor, Enterprise Apps,  10/14/2020
Think Like a Chief Innovation Officer and Get Work Done
Joao-Pierre S. Ruth, Senior Writer,  10/13/2020
10 Trends Accelerating Edge Computing
Cynthia Harvey, Freelance Journalist, InformationWeek,  10/8/2020
Register for InformationWeek Newsletters
Current Issue
[Special Report] Edge Computing: An IT Platform for the New Enterprise
Edge computing is poised to make a major splash within the next generation of corporate IT architectures. Here's what you need to know!
White Papers
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll