NEW YORK (CNN/Money) -
"Business on demand" has been a buzz phrase at IBM for more than two years, and its top executive met with some of the company's largest customers Wednesday, aiming to sell them on the idea and stir up demand for its products and services.
Samuel Palmisano, who took over as CEO of IBM (IBM: up $1.36 to $78.10, Research, Estimates) in March, also said that in his recent travels around the world, he has seen "some encouraging signs" that the economic downturn is nearing a bottom.
"But from an information technology perspective, our industry has problems that are, I think, somewhat unique unto itself beyond the pure issues associated with economy," Palmisano said.
The newly minted CEO, who will take the additional title of chairman in January, made those remarks before an audience of about 100 IBM customers in New York. The purpose of the address, however, was not to talk about the economy but instead to outline his vision of a coming "on-demand" era of business and technology.
"We're seeing a fundamental shift that is irreversible," Palmisano said.
The on-demand idea has been floating about in IBM's research and development facilities for several years. Essentially, it is a business model under which IBM provides large corporations with "utility-like" access to its computing resources, dispensing them under a model similar to telephone or electricity services.
IBM in recent months has been marketing that idea, and indeed has won over a few customers, most notably American Express, which last February shifted the bulk of its IT infrastructure to IBM's Global Services division.
Other IT companies have been pushing some version of the on-demand idea as well, including Electronic Data Systems, the No. 2 supplier of IT services behind IBM, Hewlett-Packard and Sun Microsystems.
Palmisano on Wednesday appealed directly to the chief information officers who attended the meeting, urging them to convince their companies' CEOs and financial officers that the on-demand model will save money, reduce the complexity of systems and enable them to focus more on their core businesses.
"You've got to get them to buy in," Palmisano said.
The company also is planning an aggressive advertising campaign through which it will try to sell businesses on the on-demand idea. It's part of a $10 billion investment IBM is making in the strategy, Palmisano said.
"It's a $10 billion bet, audited and certified by our CFO," he said. "But it's not a risky bet."
Additionally, Palmisano said IBM has created a business unit within IBM to oversee the company's on-demand efforts and will be opening design centers around the world. Irving Wladawsky-Berger, IBM's vice president of technology and strategy, will be in charge of IBM's on-demand computing efforts.
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