Blue Tuesday

IBM bought Monday on Tuesday. It’s Wednesday as I write this. You may not even look at it until Thursday, or Friday. Good thing we’ve got a long weekend coming up.

Oh, all right, I’ll stop now. By “”Monday,”” of course, I’m referring to the consulting arm of PricewaterhouseCoopers, which announced

it was changing its name to a day of the week almost two months before the buyout offer from Big Blue. Given the way Monday was ridiculed by media around the world (including me, though I came out in favour of it in the end), I would have thought more people would want to crack one last joke before this deal is finalized. Apparently it didn’t come up in the Webcast where executives announced the offer, either.

Maybe IBM chief executive Sam Palmisano was too embarrassed to bring up a branding exercise that would have been way too out there for a company as conservative as his. This raises the question of cultural fit, which also hasn’t been discussed in much detail. IBM has certainly been spared the relentless grilling endured by Carly Fiorina, for example, when Hewlett-Packard announced its acquisition of Compaq Computer Corp. Granted, this buyout is not nearly as large, but it’s not as though the consultants at PwC aren’t sensitive to differences in corporate culture.

After HP failed to acquire PwC two years ago, for example, I spoke at length with a consultant who was closely associated with both firms. He told me that people in PwC had dreaded the thought of living the so-called HP Way. “”They didn’t want to see themselves as product people,”” he told me. “”They’re consultants, and they see themselves as dynamic professionals working out management strategies.”” How strange it must be, then, for the PwCers to wind up part of a product company after all.

On the other hand, if you have to become part of a larger corporate entity (which is where many of these firms seem headed), where would you rather be? The consulting prowess HP gained through the Compaq deal was mainly on the after-sale, support side of the business. IBM Global Services, in contrast, remains about as dynamic as Big Blue gets. The company is already highly competitive with CGI, EDS and Fujitsu Consulting, and the breadth of the product offering supporting its services is second to none.

In the United States, an HP executive was quoted saying the company wouldn’t have been interested in PwC anymore, because to buy out a consulting firm was to close the door on partnerships with other consulting firms. This is hogwash. IBM hasn’t always dealt well with channel conflict, but it continually refines its partner programs to make room for outside consulting firms in selected customer engagements.

There’s nothing like extending your lead in the market, and IBM made this purchase because the market conditions are much more favourable now than they would have been a year or so ago. If there’s any challenge in the transition here, it’s the degree to which the PwC consultants take on actual outsourcing roles. It’s one thing to walk into a enterprise, assess its needs and install new equipment. It’s another to actually take over that infrastructure yourself on behalf of the client for years at a time. Related skill sets, to be sure, but not identical.

We may never know how PwC would have fared if had gone through its initial purchase offering as planned, but it was clearly looking for a change. It reportedly chose the name Monday because the word represented new beginnings, a fresh start. Now’s its chance.

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Jim Love, Chief Content Officer, IT World Canada

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Shane Schick
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