IBM's PwC bargain to benefit Linz

The takeover of PricewaterhouseCoopers' consulting business by IBM could well be of benefit to Land Information NZ and its Landonline project.

The takeover of PricewaterhouseCoopers’ consulting business by IBM could well be of benefit to Land Information NZ and its Landonline project.

“In some regards it won’t be a bad thing to have Informix, the core database for Landonline, and the maintenance of software under the same ownership,” says Landonline manager Terry Jackson.

IBM took over database vendor Informix last year.

PwC Consulting is building Landonline’s second phase, which permits transactions to take place online from the offices of Linz clients such as surveyors and solicitors. It is also providing maintenance for the software developed in the project’s first phase.

Landonline runs on Sun hardware, operated by EDS, and Jackson suggests the influence of IBM would therefore not be great on the hardware side with Linz.

But the takeover must raise alarm with some prospective customers. With the shrinkage of the large consultancies and IT connections by many of the others, it will become increasingly difficult to find a first-rank vendor-agnostic consultancy.

As for the broader implications of the merger for a large client like Linz it’s too early to tell, Jackson says. He says Landonline only found out about the takeover a day before speaking to Computerworld. “And we’ve not talked about it much yet.”

Industry analyst IDC estimates that the combined 2001 New Zealand revenues of IBM and PwC Consulting will exceed $380 million. With IBM NZ’s services revenue estimated at $160 million and PwC Consulting at $40 million, IDC estimates that the combined company will own about 10% of the New Zealand IT services market.

“This will consolidate IBM’s second position in that market and provide a significant lead on the new HP which is estimated to have managed services revenues of between $80 and $90 million for 2001,” IDC says. EDS is still the market leader in this sector.

IBM already has a consulting and services division and so, in the view of IDC analyst Mark Cribbins, would make a better PwC Consulting owner than HP, a company which is comparatively inexperienced in this field and which unsuccessfully bid $US15 billion for PwC Consulting in late 2000. IBM has picked up a comparative bargain, paying only $US3.5 billion according to US sources.

The takeover reversed PwC plans to float the consulting arm and saddle it with the unlikely name of Monday.

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