IBM's IT services unit, which now accounts for half of the company's worldwide annual revenue and more than half of the company's global workforce, has grown so big and so unwieldy that the company is splitting the unit into two separate pieces: a unit that will focus on high-end business consulting and another that will focus on the more mundane task of running corporate data centers.

There are a number of other factors at play, as well. Not the least is that a 30-year IBM veteran who was running the IT services unit recently jumped ship for more lucrative career possibilities at a leading private equity firm. In addition, IBM is moving to protect its turf from low-cost Indian outsourcing companies like Wipro Technologies, Infosys and Tata Consultancy Services.