Madrid-based IBM Espana SA has not let the grass grow under its feet in the financial sector of late, recently signing a string of important contracts. In April, a 10-year facilities management agreement worth $78.7m was sealed with Banco Urquijo. Just two days later, a contract was announced with Argentaria, whereby IBM will become the bank’s preferred supplier. A further agreement with savings bank Caja de Vigo swiftly followed. Finally, in May, the largest bank in Spain Banco Bilbao Vizcaya , BBV chose IBM Espana as its technological partner for its 1,000 days program, in which the bank is to invest $393.7m over five years in complete renovation of its 2,350 branches. BBV general manager Jose Fonollosa observed: The latest technolog y is important to us for two reasons – cutting costs and giving us a competitive edge. Director of IBM Espana’s large systems business unit Alvaro Alvarez-Santullano confirmed the banking sector was now making urgent demands for applications, particularly in relation to decision support, improving bank-client relations, multimedia and databases for marketing. So what are the possible reasons behind IBM’s recent successes with large accounts? Basilio Rueda, director of Andersen Consulting’s facilities management unit BRM told El Pais that IBM’s capacity as a systems integrator lent it considerable credibility in the eyes of large corporations, while the revitalized profile of mainframes, now masquerading as large servers, was also working in favor of the company. For his part, Alvarez-Santullano claimed that the perception of IBM as a solid all-rounder is helping its business with large accounts, which now comes as much through services as through the sale of hardware. Three or four years ago the gurus proclaimed the mainframe was out. These machines were consequently put to one side. Now their prices have come down so much that almost everyone can afford them. On the other hand, the hidden costs – software, personnel and ot hers – of the personal computer networks have also come to light, Alvarez-Santullano said. Nevertheless, most observers are skeptical about whether the sale of large systems can help IBM improve revenue figures, because although it may be selling more units, the prices are, as Alvarez-Santullano says, really quite low. IBM’s interest in these systems would appear to be strategic: it is a segment IBM clearly dominates, and although the hardware itself is not going to generate much revenue. IBM’s hope is that the related requirements of software and services will provide some tasty pickings.
