Distribution Channel

IBM is the leading company in I.T industry which deals with virtually all dimensions of computer technology including software and information technology gadgets. IBM is the biggest information technology company, for instance, in 2005, it revenues amounted to $ 91 billion. Additionally, it is the largest provider of hardware, information technology services, rental and financing.

In 1995, IBM established Software Group in order to put together its infrastructure, Operational and middleware software from dispersed IBM’s units. IBM's Software Group is currently a self-sustaining software business, with profits, growth rates as well as other main measures in comparison with other large companies dealing with software. Currently, software group has both service and support capabilities through their well established development labs in Toronto, Austin. Moreover, IBM Software Group has service support centers for instance, Dallas Systems Centre (Morley and Parker).

IBM has highly qualified software sales specialists in its sales and distribution channel to ensure that its products are accessible in all market segments. IBM has a large customer base with over 24,000 business partners that help in distribution of its products in all market segments. To ensure effective distribution of its products, IBM Software Group is categorized into five types of brands in the software industry; these include Information management, Workplace, Web sphere, Tivoli, Portal and Collaboration.

Currently, IBM offers a variety of data storage servers and devices with large storage as well as safe and secure database. The company is highly profitable; for instance, in 2005 it gained a profit which was more than income generated by the next nine computer firms in total sales. The company spent more on research and development than what it obtained from earnings. In the same year, the company maintained its thrust in external disk storage systems by increasing its income by 9.2 % in the first quarter of 2005. Additionally, the company made a growth of 6.7 % in the entire external disk storage segment.

However, IBM’s supply chains are currently becoming more complex, more costly to run and hard to manage. For instance, in 2005, IBM spent $3.4 trillion on its supply chain. In order to address this problem, IBM created business transformation outsourcing mechanism in its supply-change management. This practice enabled the company to improve customer service and costs as well as distribution of its products in all segments.