The Boston Globe today reported a restructuring of IBM’s Hardware Division around customer types, as opposed to product types.  Personally, the move makes a lot of sense to me.  I spent a good part of my IT procurement career working for State Street Bank, a very large financial services company, and I got used to viewing things one way, the State Street way.  Basically, if anyone could break something, we could. We scaled bigger, and required higher levels of performance, service, support, and availability than 99.999% of the companies in existence.  I remember an IBM systems engineer saying, “You don’t need 5 ms response time from your storage.”  He was wrong, and we installed EMC storage that delivered the performance we wanted.

It turns out that most companies don’t need what State Street needs.  I had to relearn that fact, when I became an analyst at IDC.  It took me a few months to remember back to the days when I used to assemble PCs out of parts to squeak under the $100 capital-budget spending limits of my previous employer, Pioneer Financial, a Cooperative Bank, long ago subsumed in a round of bank mergers and now part of Bank of America.

What I’m hoping IBM’s restructuring means is that IBM can now get serious, I mean really serious, about serving the needs of low-end customers.  Can IBM offer a very easy to use, low-end  solution and do so profitably and cost effectively?  Can they deliver the kind of management tools that a small customer can install and use?  My guess is that much of the development DNA that existed in IBM, back when the company developed typewriters, personal laser printers, and PCs for small businesses, has been lost.  So the opportunity for startups, particularly those that have optimized their products for the volume channel, with low cost, ease of use, and ease of support, will become good acquisition targets.