Some correspondents have questioned whether IBM can really compete with SAP and Oracle in the applications business using the approach I hypothesized. Using an approach like BPM BlueWorks, IBM Global Business Services consultants can share processes (and the code to implement the individual "tasks" in those processes).
To put this in some perspective, IBM Global Business Services has 190,000 employees, according to Wikipedia. While not all of them are coding, bear in mind that this number is on the order of 10x the number of developers at Oracle and SAP. In addition, IBM has a large software division and research labs, also able to support the creation of these processes.
IBM need not create the basic financial and human resource core processes. They don't even have to create the basic objects and the processes to maintain the connections between those processes. After all, those objects and processes already exist, for most customers, in their current, installed SAP or Oracle applications. Those cores do not need to nor do they benefit from change, which is why customers are so loathe to upgrade their cores. However, customers desire additional, high value processes on top of those cores - this explains the success of Siebel and i2 in the past, and Salesforce and SuccessFactors and Taleo and Lithium in the present.
As long as IBM can keep those stable cores in place, IBM can develop high value processes as composite applications using WebSphere/Lotus without investing in core ERP. Fortunately, IBM has a practice in place to take over running your existing enterprise apps, guaranteeing a cost reduction every year, and without the large periodic upgrade costs of staying current with SAP and Oracle.
In summary, IBM will compete with SAP and Oracle for applications business, but not by trying to replace current SAP and Oracle instances (the way Oracle and SAP compete with each other), but instead by building on them as a platform.