IBM Corp chairman and chief executive Louis Gerstner has reorganised the company around five customer groups, saying that the move was intended to counter the computer industry’s insensitivity to the customer. The five are large businesses and institutions, small and medium businesses, consumers, the OEM market, and distributors, third party retailers and independent software developers. A spokesman for IBM later told Reuters that the five customer groups are areas of emphasis only for IBM and the focus on these customer groups does not mean adding a new organisational layer to IBM. It will be interwoven across the whole company, he said. Gerstner also said IBM will continue to make acquisitions when it makes sense and that divestitures will also play a role, but that IBM has no divestitures planned now. Gerstner was speaking at his annual meeting with analysts, and from the same meeting, the New York Times again picked up the message that Gerstner has given up on OS/2. Obsessions with operating systems is fighting the last war, he said, adding that it is too late to go after the desktop: we have to go on to the next thing, he said. Gerstner appeared to side with those within the company that say it is a waste of money to try to go head to head with Microsoft on the desktop, saying IBM would sell OS/2 aggressively to large companies and institutions that use it on application servers – but in that case, why endorse the rival product, Windows NT, on its PowerPC machines? According to Dow Jones & Co, at the same meeting, Gerstner noted that two years ago, some were encouraging IBM to break up into pieces, which would have been exactly the wrong thing to do. He said that many technology companies have been making alliances with other companies to expand into new areas. IBM, because it hung together, is able to compete in many areas on its own. The strictures about IBM’s now frighteningly low research and development expenditure seem to be hitting home, and 1995 will be a low point for research and development expenditures, which will probably increase in the future, declared chief financial officer Jerome York at the meeting.
