IBM is rejigging its hardware business around customer types, rather than by product, according to an internal memo obtained by the AP.

In a message delivered to the troops today, division chief Bill Zeitler said the re-org will improve IBM's ability to (AP's quote) "sell technology to small and medium-sized business and to design products specifically for them".

IBM will continue to report hardware revenues by product line, but will now chase customers through four new client groups. They are: big biz; small and medium-sized biz (SMBs); vertical systems for retail, telecoms and healthcare; and microelectronics, according to the AP, which says the changes are the biggest seen in the division in 15 years.

Re-org. Whatever.

Big tech companies are forever tearing down sales and channel walls and rebuilding them according to the perceived needs of the day. Lately, most tech firms are desperately seeking SMBs to deliver market-beating growth. IBM has a head start already, claiming $17bn SMB revenues in 2006. But as the AP notes, there is a $6bn discrepancy between its figures and what the outside world thinks those SMB revenues really are.

The best thing that IBM can do to woo SMBs away from HP and Dell is to shake off its "expensive" tag. Better client-facing efforts, along with great advertising and marketing programmes, have their roles to play in winning hearts and minds. But nothing beats a judicious price cut. Or ten. ®

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