What was Gerstner’s and Palmisano’s strategy for the global services division?

Since he became CEO of IBM in 2003, Sam Palmisano has worked hard to build a new global computer services company, which in 2009 was the largest and one of the most profitable in the world. In 2009, IBM had a market capitalization of more than $119 billion and employed more than 319,000 people worldwide in more than 150 countries. What kind of business model and strategies has Palmisano and his top management team pursued that allowed IBM to regain its position as an industry leader and wiped out memories of its disastrous performance in the 1980s? In addition, what challenges lie ahead if the company is to retain its competitive advantage and leading position in the global business computer services and consulting industry and keep rivals such as HP, Accenture, Dell, and Oracle at bay? That was the question Palmisano was grappling with in the spring of 2009 as the effects of the recession that started in 2008 started to bite into IBM’s revenues and profits.