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IBM winning back lost PWC clients

IBM has won back 70 percent of the customers that parted ways with PricewaterhouseCoopers Consulting before the consulting firm was acquired by IBM last year, the company said Friday.

A number of accounting-consulting companies, including PricewaterhouseCoopers, lost or gave up customers after last year's corporate finance scandals, such as Enron's. PricewaterhouseCoopers took the extra step of selling off its consulting services arm to IBM.

IBM, which acquired PwC Consulting for $3.5 billion in July, launched a campaign to win back customers lost by PwC once it completed the acquisition in October, and the conflicts evaporated, said Ian Colley, an IBM spokesman.

Luring back those customers has helped bolster IBM's Global Services division. IBM Global Services has become the company's third pillar. In January, IBM said that its services revenue increased by 17 percent in the fourth quarter of 2002, to $10.6 billion–an increase the company attributed to the PwC Consulting buy.

Services deals are often the lead-in for sales of other products that include software and hardware such as PCs and servers.

Since closing the PwC acquisition, IBM has begun retooling its products and creating new services based on PwC Consulting as part of its On Demand computing initiative announced in October.

Through the On Demand initiative, IBM seeks to provide its customers with IT resources, such as computing power and data storage, as a metered service in the same way they might buy electricity.

IBM has announced several billion dollars worth of new deals driven by the On Demand initiative and services that are provided by PwC Consulting.

Among them are a seven-year, $5 billion contract with J.P. Morgan Chase and a 10-year, $2 billion outsourcing deal with auto-parts manufacturer Visteon.

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