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SOMERS, N.Y.—When CEO Sam Palmisano set IBM on the path toward On Demand in October 2002, he said the company would help its customers better respond to their own customers, competitors and rapidly changing market. But in Palmisano’s view, the transformation starts at home, so he decided IBM must first transform itself into an on-demand entity as proof that the company was ready for an on-demand world.

Collaboration was key to delivering an on-demand environment, said Linda Sanford, senior vice president of enterprise on-demand transformation and information technology at IBM and the executive Palmisano picked to lead the company’s internal effort to reinvent itself as an on-demand entity.

“Collaboration plus innovation equals innovation and growth,” Sanford told a Cyberposium audience in January at Harvard Business School, in Cambridge, Mass. The audience of MBA candidates seemed to get it, sitting rapt during Sanford’s speech and following up with questions about collaboration.

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