Reading an article about how many IT divisions of big companies in Japan, became seperate companies. The motivation is apparently to turn them in profit centers. Can anyone explain how becoming a seperate company would be profitable for the original company?
Extract from article:
"Software development is a critically important part of the Japanese IT sector. The software developers can be categorized into three groups – Maker, User, and Independent System Integrator (so-called SIer). The Maker group consists of computer manufacturers and their subsidiary companies which provide total system solutions including software development and support as well as hardware. Representative companies are Fujitsu, NEC, Hitachi and IBM. Companies in the User group are former IT divisions which were spun off from parent “user” companies in order to transform themselves into profit centers from cost centers. Most of the large players in financial, manufacturing, and trading sectors keep vertical relationships with their IT subsidiary companies. "