IBM's sweeping reorganization follows three years of bobbled opportunities that have badly hurt the once-indomitable giant in its quest for supremacy in some of the fastest-growing categories of the data processing industry.
IBM remains king of the slow-growing mainframe business. But in mid-range systems, IBM's offerings, which generally are incompatible with each other, have been taking a beating from Digital Equipment Corp.'s products, which communicate easily with one another. And in the booming market for scientific workstations, IBM's PC-RT has been left in the dust by offerings from such upstarts as Sun Microsystems and Apollo Computer.
Those are the extreme examples of the competitive pressures that exist across the company's product line. "Up and down IBM's hardware line, there are good producers of viable, competitive equipment," said Bruce Rosenblatt, manager of computer planning for Chevron.
Industry experts said Thursday that IBM's board of directors had two main goals in pushing for the restructuring, which amounts largely to a decentralization of operations.
The first, as publicly stated, was to allow the 389,000-employee company to react more quickly to the needs of its customers. The second, and unenunciated, goal was to heighten the accountability of key members of IBM's management team, analysts said.
"Under IBM's old structure, board members had a great deal of difficulty in assessing whether key players deserved praise or blame, or some measure of each," said Kenneth G. Bosomworth, president of International Resource Development, a New Canaan, Conn., consultant. "The new setup will help the board identify the heroes" as well as the laggards.
In splitting IBM into five "highly independent" units, IBM also may be trying to replicate the now-legendary success of its old Entry Systems Division, Bosomworth said. The division, IBM's first experiment with an autonomous unit, helped the company seize the leadership in the personal computer industry from pioneer Apple Computer.
Analysts pointed to the appointment of telecommunications expert Terry R. Lautenbach as head of IBM United States as a signal that IBM will redouble its efforts to make all of its machines--and especially those in the hotly contested mid-range market--communicate more smoothly with one another.
"They've got a babble of incompatible architectures and operating systems at a time when it has never been more important to the customer to have compatibility for easy networking," said Jeffry C. Beeler, an industry analyst with Dataquest in San Jose.
Few analysts believe that Thursday's moves will provide a quick fix to IBM's woes because of the time it takes the company to introduce new products. "They are definitely trying, but you have to remember that IBM has very long product cycles: eight to 12 years for some major lines," said Clare Fleig, director of research for International Technology Group in Los Altos.
For at least a year, IBM Chairman John F. Akers also has promised that the company will recreate the closeness to its customers that IBM enjoyed during the early years of the data processing industry.
"The relationship is not as close as it was," said Rosenblatt of Chevron, which has been buying more and more of its equipment from non-IBM vendors. "We miss some of IBM's support, and I am sure they miss some of the business that the close relationship used to generate."
Rosenblatt attributed the shift to a maturation in the data processing industry. "Once, IBM was the expert. Today, many of us have gained sufficient knowledge and capability that we can go it alone."
Still, "we'd very much like to take better advantage of the knowledge and expertise of IBM. We'd like to see some of that old relationship come back. But we're not at the point where we'd like to see a monopoly in the computer industry again."