International Business Machines Corp., the world's largest computer services company, will use Google Inc.'s technology within its own search programs to help clients better find and manage information.
The agreement is part of IBM's new strategy, "Information as a Service," to provide software, hardware and services to make it easier to find and use data across various formats and locations, Chris Andrews, a spokesman, said in an interview today.
In linking with Google, IBM is tapping a technology used by more than 400 million users a month to search the Internet and desktop files. IBM, based in Armonk, New York, is betting it can use the technology to boost sales by helping customers manage their documents.
"IBM are trying to take their whole product set and create a holistic solution to managing information," said Barry Murphy, an analyst at Forrester Research Inc. in Cambridge, Massachusetts. "They could drive this into a multibillion- dollar-potential market." Chief Executive Sam Palmisano has revived profit at IBM by selling the money-losing personal computer unit and is now focusing on more-profitable services and software. The company has spent US$1 billion on research and development on its new strategy and has bought 14 companies, including Westborough, Massachusetts-based Ascential Software Corp. for US$1.1 billion in May, to add technology including data-integration software.
IBM faces challenges in persuading companies to buy an over-arching data-management system, when they may want products and services to fix specific problems, according to Murphy.
"This is a lot for any organization to get their arms around," said Murphy. "The biggest challenge is, are organizations going to respond to this big a solution?"
IBM will have to change its corporate culture to encourage its sales force to sell a general data-management solution rather than individual products, Murphy said.
The Google desktop search is available at no charge to current users of IBM's Omnifind search as a download on IBM's Web site. There was "no exchange of money" with Mountain View, California-based Google, and the deal is purely a technology partnership, Andrews said.
Shares of IBM slipped US$0.89 to US$81.42 at 4pm in New York Stock Exchange Composite trading. The stock has slumped 17 percent so far this year.