IBM Says No Competitive Threat from Dell, HP, Xerox Gobbling Up IT Services Firms

(Reuters) – IBM (NYSE:IBM) feels no threat from a series of acquisitions by competitors and has no plans for a major strategy change even as it spends more on mergers and acquisitions, a senior company executive said on Friday.

Asked about acquisitions like Hewlett-Packard Co’s (NYSE:HPQ) $13.2 billion purchase of EDS, Adam Klaber, general manager of consulting and analytics at International Business Machines Corp’s Global Business Services, said he saw none so far.

"We don’t see them in the higher-ended services market, They haven’t been there in the past … and we don’t see it," he told the Reuters Global Technology Summit in New York.

Klaber oversees one of the fastest-growing segments of the company, which has been trying to shift to higher-margin services and software businesses from commoditized hardware over the past decade.

IBM bought PricewaterhouseCooper’s management consulting and IT services business from PricewaterhouseCoopers in 2002, and is the world’s biggest IT consulting firm.

Other technology companies are also expanding into services and software, with Dell Inc (NASDAQ:DELL) buying Perot Systems Corp for close to $4 billion and Xerox Corp (NYSE:XRX) acquiring Affiliated Computer Services Inc for $5.5 billion.

IBM, by comparison, spent just $1.5 billion on acquisitions in 2009, mostly focused on niche technology companies. Chief Executive Sam Palmisano said on Wednesday it would spend around $20 billion in acquisitions through 2015.

Klaber said rivals were merely following their lead.

"What they’re doing is following the business model we have. We have a 10-year lead with them," he said.

"We’re going to accelerate our investments but we’re not going to change the course," Klaber said. "It may be a little boring, but we feel it works."

(Reporting by Ritsuko Ando; Editing by Richard Chang)