IBM to invest $US1 billion in Europe's mobile net

IBM has made one of its biggest commitments yet to Europe's fast-growing mobile internet market, pledging to spend one billion US dollars and hire 2,500 wireless services staff in the region over the next two years, the company announced this week.

Big Blue is betting that companies are keen to offer wireless data services to consumers and employees via mobile telephones, handheld computers and other devices. The company hopes to provide consulting and integration services, as well as software products, to help these companies build out their wireless computing infrastructures, said Val Rahmani, vice president of IBM's communications sector for Europe, Middle East and Africa.

"We've been working primarily with the early adopters so far, but now we're realising that companies want to roll out (mobile data networks and services) across virtually all industries and at all levels," Rahmani said.

IBM will spend much of the one billion dollars on hiring additional mobile professional services staff, including consultants, systems integrators, security specialists and operations staff that can build and run wireless web portals. The company plans to add about 2,500 staff over the next two years, for a total of 4,000 in the region, Rahmani said.

The company will also seek additional partnerships with wireless specialists and appears set to make acquisitions and investments to further its initiative. For example, IBM recently made an undisclosed equity investment in ePartners 2, the venture capital arm of News Corp that focuses on internet startups, Rahmani said.

One analyst called the sizeable investment a bold one, particularly coming from a company that is not well known for its wireless offerings. IBM will compete with database giant Oracle, wireless phone giant Nokia and a host of smaller companies aggressively positioning themselves in the wireless enterprise market, said Declan Lonergan, a senior analyst with Yankee Group.

If IBM selects its partners wisely, however, it could become a formidable competitor because of its existing close ties with businesses in the region, Lonergan said.

"All of the larger companies are pretty much required to spell out their mobile road maps these days" due to the expectations -- some realistic and some fanciful -- surrounding wireless data access, he said.

Rahmani noted that IBM already has partnerships with Nokia, Motorola, Symbian and other wireless specialists. The company is also involved in 220 wireless development projects in Europe and offers some strong wireless software products, including WebSphere Everyplace and a mobile version of its MQ messaging platform.

"You haven't seen us in the past (in the wireless market), but you are going to see a lot of us in the future," Rahmani said. While other companies have established themselves in certain narrow fields for wireless products or service offerings, few companies can match the breadth of IBM's hardware, software and services, she claimed.

IBM sees two main areas of demand for its wireless services. On the one hand, businesses want to wirelessly enable information stored in legacy computers, such as sales and inventory data, so that mobile workers can access the information on the road. In addition, companies want to build mobile portals that allow consumers to access information and services from mobile phones.

"We used to focus on the financial services, retail and travel industries, but now we see demand emerging across the board," Rahmani said, including government and educational organisations.

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