IBM's services pivot under Lou Gerstner (1993-2002)
By 1993 IBM was bleeding money as mainframe hardware and PCs commoditized, and analysts called for splitting the company up. Lou Gerstner, brought in that year, kept IBM whole and bet the future on services and consulting.
IBM's services business boomed; in 2002 it bought PwC Consulting for about $3.5 billion to build advisory muscle.
Services became IBM's growth engine and the template for reinvention when core products are disrupted.
Same pattern, reversed: in the 1990s commoditized hardware pushed a tech giant into services. Today, AI is feared to make services themselves obsolete — and Accenture's record bookings suggest clients still want human help to adopt it.
