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IBM Research Launches Consulting Organization

New services arm to provide on demand innovation services

Armonk, NY, USA - 20 Nov 2002: IBM today announced On Demand Innovation Services, a new services arm located in its Research Division, which for the first time provides customers access to a discrete team of researchers who will specialize in high-end business transformation and technology consulting. The new organization will be staffed with 200 IBM Research consultants worldwide and supported with investments of $1 billion over the next three years.

On Demand Innovation Services will work in partnership with IBM's Business Consulting Services division to bring a wide array of IBM Research innovations, tools, and expertise directly to customers.

"We're entering a new era of 'on demand business,' in which companies will differentiate themselves through their ability to dynamically adapt to marketplace changes," said Samuel J. Palmisano, president and chief executive officer of IBM. "This requires the integration of business model innovation and technology innovation. By combining the intellectual firepower of IBM Research with our world-class business consulting capabilities, IBM is better positioned to help our customers accelerate their transformation into on demand businesses."

The new services arm represents an historic step in the continued evolution of IBM Research and how its innovations are refined and delivered. On Demand Innovation Services marks the first time IBM Research has created a formal, customer facing organization. It represents its biggest organizational shift since the early 1990's when the division expanded its connections with product group development and grew its computer science expertise from about 10% of its population to more than 50% now. During the last decade, IBM built much of its $13 billion Software Group from a base of technologies invented in IBM Research.

"On Demand Innovation Services represents a fundamental shift in the IT industry's research agenda much like the emergence of software as a critical research discipline more than a decade ago," Paul Horn, senior vice president and director, IBM Research. "The role of IT research and the kinds of problems researchers should be solving must change as the industry enters a services-led on demand era."

Technical innovation is a prerequisite in the emerging on-demand economy. The On Demand Innovation Services team will help Business Consulting Services consultants tap into a base of more than 3,000 researchers worldwide, providing unmatched technical depth and expertise for customers. This technical expertise will complement the business transformation experts in Business Consulting Services to help customers to capitalize quickly on the opportunities created by innovation, market shifts, and unanticipated developments.

IBM Research is already building a pipeline of technologies that will help enable customers to better generate unique business insight and use this knowledge to capture a fast-moving market opportunity. For example, On Demand Innovation Services is currently piloting advanced infrastructure platforms for information discovery that could enable companies to gather, analyze and synthesize vast amounts of unstructured data. The pilot service is designed to extract trends, patterns and relationships from multiple forms of data. The infrastructure is intended to handle upwards of a billion webpages, documents and newsgroup postings for sophisticated data analysis and synthesis. Early applications of this technology could include business intelligence, product marketing, and demographic analysis.

Initially, On Demand Innovation Services will concentrate research efforts on four key areas:

Experimental Economics: As part of an effort to expand the standard research agenda to include additional arts and sciences that complement a traditional technology research agenda, the Experimental Economics researchers focus on experimental techniques applied to demonstrating the value of different business models. Typically, the economists are focused on how institutional design (markets, incentive structures, negotiation protocols) influence economic outcomes and the behavior of people and economic agents.

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