IBM has quietly folded its Corepoint Technologies subsidiary, which develops customer relationship management (CRM) applications, into its software division.
But the move, combined with the resignation of three of Corepoint's top executives, has led to speculation about Big Blue's continued future in the CRM market.
IBM said that Scott Webber, the unit's chief executive, Michael Robbins, its chief operating officer, and Scott McCorkie, vice president, declined to join the parent company because they preferred to stay with smaller start-ups.
The three came from Software Artistry, a customer support applications supplier that Big Blue's Tivoli Systems bought last year as the foundation of its Corepoint subsidiary.
A spokesperson with IBM's Industry Solutions Group, said: "This is all part of our internal plumbing, our reorganising. Ebusiness is a comprehensive part of our business, and Corepoint is very critical. It should be where ERP and our business solutions and other packages are."
She explained that IBM created Corepoint as a standalone unit, but it "became increasingly apparent that CRM is an integral part of the solution and we wanted it to be alongside key components".
"The top three people were the only ones who did not stay. It's very typical though, since they had an entrepreneurial background and they wanted to stick to their roots," she added.
Although Corepoint's Indianapolis headquarters will remain as a regional office, IBM Software will manage the company directly along with its own supply chain planning and electronic commerce applications. The Corepoint name will be retained on specific product lines.
IBM created Corepoint in August, 1998, and merged Software Artistry's operations with customer service, computer telephony and Internet technologies from other parts of the organisation.
Art Schoeller, an analyst at the Gartner Group, said: "IBM had to do this. It had too many products in too many places. If you took the company and divided up the technical support, team development, location and management staff, and looked at what revenue it was getting for all those pieces, it wasn't a good picture."
But other analysts suggested that IBM's decision to close Corepoint may indicate that it is backing away from competing with other CRM vendors such as Siebel Systems, which recently agreed to bundle its applications with IBM's DB2 database.
Chris Selland, an analyst at the Yankee Group, said: "It's hard to be both an infrastructure and applications provider."
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