IBM learns to think small: A system that prints sheet music from a CD is one sign of a fresh approach. Mary Fagan reports
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Your support makes all the difference.DESPITE experiencing some of the worst losses in corporate history, the troubled computer giant IBM is still keen to explore the possibilities offered by small start-ups.
InterMedia, the latest new company to be spawned by the US blue-chip, is a UK venture that aims to help fund the expansion in Europe of high technology ventures around the world.
Run by Gordon Venters, an IBM veteran of 15 years, the company aims to help technology start-ups to go global by tapping into IBM's worldwide manufacturing, distribution and marketing resources.
InterMedia's first project is the expansion of MusicWriter - a Californian firm that has developed a computer system allowing sheet music to be printed out on demand from a computerised catalogue of titles and artists.
The system, which looks like a kiosk with a computer screen, costs pounds 8,000 including a printer. It is targeted at music retailers, who can use it to avoid stocking too much sheet music. They can also use the computer system to change the key of the music they want before printing out.
A compact disc inside the machine stores 3,400 tracks and is regularly updated. It could ultimately store 20,000 on a single CD. The idea is that the retailer keeps about 30 per cent of the selling price of the music, with the remainder shared between MusicWriter, IBM and the payment of copyright costs.
Mr Venters said four more projects were in the pipeline. He declined to say what his budget was for funding the expansion of the technology ventures, save that it operated 'like an overdraft'.
'We will be measured against investment milestones, which are at the moment maintaining the target on first-year loss, breaking even by March next year and seeing a six-figure profit by the end of 1994,' he said.
The birth of InterMedia, which is part of IBM's UK holding company, is symptomatic of the changes sweeping through the ailing computer giant. The unwieldy organisation is attempting to be more responsive and fast-moving. It wants to make individual businesses and managers more accountable for their performance.
Last week IBM announced an dollars 8.9bn restructuring charge to cover redundancies and plant closures. Its after-tax loss for the second quarter of the year was dollars 8bn.
At the same time IBM in the UK announced a taxable loss for last year of pounds 767m - higher than previous estimates. The UK arm has chopped 2,200 jobs so far this year and may need to cut more to return to the black in 1993.
In spite of the problems, the UK company has set up an 'Incubator' division, which is intended to nurture concepts such as InterMedia and give them a chance to become businesses in their own right.
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