Gadgetopia

How IBM Conned My Execs Out Of Millions: A classic story of a consulting nightmare. These folks hired IBM to come in and create a “knowledge management portal.” Hillarity ensued.

We had expected IBM to stay for about three months, which all by itself would have blown our budget, given their $325/hr bill rate. But they were in our company for more than seven months, burning through more than a quarter million dollars a week. And Global Services wasn’t the entirety of the IBM damage. We still had licensing and support fees for Websphere, Websphere Portal, Websphere Content Management, Tivoli Access Manager, and DB2.

IBM, which had promoted itself to lead vendor and integrator, had overpromised, overcharged, and underdelivered. We ended up with an overly complex enterprise portal with a few off-the-shelf portlets and a few integrated applications. Many application integration efforts had to be abandoned.

And it turns out that I want to be an IBM subcontractor. Or —more accurately — the guy who supplies IBM with contractors…that they turn around and sell to clients.

One other thing that I discovered is that owning an IBM subcontractor is a nice way to make a living. The person who owned the subcontracting company we worked with was a former IBM salesperson. He calculated that he could make a lot more money by just hiring dozens of technical staff off of Monster and Careerbuilder and then selling them to IBM for $165/hr, and that’s what he does now. We estimated that he was making $90,000 a week on our contract for essentially just hiring people and doing payroll.