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IBM/PwC Unit Wins Customers Back

IBM's $3.5 billion purchase of tech consultancy PricewaterhouseCoopers is apparently paying off with recent "winbacks" of departed PwC customers, the company said.

A spokesman for IBM's global services division, which houses the tech giant's Business Consulting Services group, said the unit has won back about 70 percent of customers that had left PricewaterhouseCoopers before IBM purchased the firm.

At the height of the Enron accounting scandal in 2001 and 2002, which included conflict of interest issues related to the energy trading company's use of accounting firm Andersen's audit and consulting services, accounting firms lost customers over the issue. PricewaterhouseCoopers saw about 149 customers decline consulting contracts because the firm was already conducting auditing work, an IBM spokesman said.

But since IBM purchased the consulting side of the business, a deal that closed in October, about 110 of those customers have returned to the merged services division free of prior auditing conflicts, said IBM spokesman Ian Colley.

In addition, Colley said a sizeable portion of the returned customers are giving the go-ahead for on-demand services, which refers to IBM's strategy of delivering computing capacity virtually to customers as their needs scale up and down. For example, he said manufacturing is seeing a noticeable rise in project activity such as with projects that involve the addition of radio frequency tags to assembly line materials that let manufacturers track their goods more extensively, and wirelessly.

PwC Consulting's staff combined with IBM's own 30,000-strong consulting ranks in its Global Services division to create a 60,000 employee-strong Business Consulting Services group.