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Full Steam Ahead

IBM expands while HP reorganizes.

IBM has steadily increased its investments to provide value-added services and solutions for insurance clients, according to Bill Pieroni, general manager of IBM's (Armonk, N.Y.) global insurance industry practice. And in the wake of Carly Fiorina's departure from rival HP (Palo Alto, Calif.), IBM plans to continue to increase its focus on insurance and build out new capabilities.

In the past 18 months, IBM has signed more than $4.5 billion of on-demand business contracts with insurers. And with the recent acquisition of Greenville, S.C.-based Liberty Insurance Services, IBM has increased its end-to-end process outsourcing for life policy administration service to administer more than 2 million policies. "Most of our competitors focus on a narrow set of assets or capabilities, having to stitch together hardware, software and services from alliances in a constant state of flux," says Pieroni.

IBM's service sales grew 8.9 percent in 2004 to $46.4 billion, according to Gartner. Meanwhile, although HP has made headway in the services market with worldwide sales of IT services growing 8.3 percent in 2004 to $14.2 billion, CFO and new interim CEO Robert Wayman intends to increase the company's profitability by focusing on its storage and server division.

"Storage has been losing market share. We fell a bit behind in terms of the product road map. That's one area [where] we absolutely need to not only fix the mistakes we made but make sure we have the management team and processes [so] that we don't have those kinds of mistakes going forward," Wayman said in a conference call with reporters.

This article includes additional reporting from InformationWeek.

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