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Expect improved contract terms from IBM/PwC deal

Cliff Saran and Antony Savvas
Users are set to benefit from having a single supplier contact and more finance options if the proposed acquisition of PwC Consulting by IBM is approved.

"The acquisition will give users a single point of accountability," said Giga Information Group analyst Pascal Matzke. This represents an important consideration in complex IT contracts which in the past have tended to involve several suppliers.

Matzke also believes prospective PwC Consulting clients are likely to benefit from the financial arrangements available from IBM. "With PwC Consulting having access to IBM's financing we are likely to see risk-sharing agreements on offer to clients."

The big question for PwC Consulting, according to Matzke is whether it is able to maintain its objectivity when choosing third-party product and services. Matzke said PwC Consulting had partnerships with Microsoft on .net Web services, along with SAP and other enterprise software companies. "IBM offers pre-packaged software and its own Web services products. The question is, what now happens to .net at PwC Consulting." He said the challenge for IBM was to demonstrate it could offer impartial advice.

One PwC partner whose business competes with IBM's hosting services is Cable & Wireless. Gavin Kilfoil, Cable & Wireless vice-president of Internet Solutions, said the company wasn't perturbed by any perceived lack of independence on PwC Consulting's behalf if the acquisition went through. Kilfoil said: "At the end of the day it's up to the customer as to who they want on a project, but having successfully worked with PwC in the past we would have no qualms about working with them again."

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