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Samuel J. Palmisano 1951 - 2002-2011 -

 IBM CEOs: Leadership ⇔ Challenges ⇔ Transformations in the IT Century

Samuel J. Palmisano 1951 - 2002-2011 -
(Highlights – Milestones – Excerpts)

Early this year 2002, we acquired Rational, a leader in software development tools, for $2.1 billion. 

April 29, 2002, IBM announces the IBM eServer i890, featuring mainframe-class technology and the company's game-changing POWER4 microprocessor. The 32-way i890, running the latest release of the iSeries operating system -- OS/400 Version 5 Release 2 -- nearly doubles the processing power of the previous top-of-the-line iSeries, the i840.  

May 2002: In a classic refinement of its ThinkPad product line and most radical design change in nearly a decade, IBM adds touch pad technology to the traditional Track Point.

June 5, 2002, Hitachi to Buy IBM's Hard Drive Business - IBM will sell its more than 45-year-old hard-drive business to Hitachi for $2.05 billion.

July 2002, IBM and PricewaterhouseCoopers agree in July that IBM will acquire the former's global business consulting and technology services unit -- PwC Consulting. Under the terms of the agreement, IBM will pay PricewaterhouseCoopers an estimated purchase price of $3.5 billion in cash and stock. The transaction gives IBM an unmatched capability to help customers solve their business issues and to exploit world-class technology for improved business performance. The combination creates a new global business unit, IBM Business Consulting Services -- comprising more than 30,000 IBM and 30,000 transferring PwC Consulting professionals -- which becomes part of IBM Global Services.

November 2002: IBM announces the eServer p650, the world's most powerful eight-way UNIX server.

On December 31, 2002, the company sold its HDD business to Hitachi for approximately $2 billion.

Over the past decade, the U.S. Patent Office has issued IBM 22.357 patents – more than ten of our top competitors combined. 

IBM Annual Report for 2002 signed by Sam Palmisano: Revenue 2001/2002 in B$: 83,1/81.2. Net Income 2001/2002 in B$: 7.7/3.6. We now have nearly 60.000 professionals in industries ranging from financial services to health care, with business process expertise in areas like supply chain management, human capital solutions, and business transformation outsourcing.

20030124, As part of the broadest transformation of its eServer iSeries in more than a decade, IBM announces iSeries 825 and 870, which join the iSeries 890 at the high-end of the iSeries family. Used by more than 200,000 customers around the world, the IBM eServer iSeries is one of the industry's most popular servers.

ARMONK, N.Y. - 06 May 2003: IBM today introduced its most powerful UNIX server ever, an ultra-fast IBM eServer p690 system that provides a 65 percent performance boost over its game-changing predecessor

May 19, 2003: IBM announces the eServer zSeries 990, the world's most sophisticated server and the new flagship of the eServer family. The new z990 sets a new standard for enterprise-class computing and is the result of a four-year, more than $1 billion investment in the zSeries platform involving 1,200 IBM developers.

ARMONK, N.Y. & ZURICH - 28 Jul 2003: ABB and IBM said today that they reached a 10-year agreement to outsource close to 90 percent of ABB's information systems infrastructure operations - including the transfer to IBM of more than 1,200 employees. The agreement is valued at US$ 1.1 billion and builds on a well-established relationship between the two companies.

IBM ThinkPad Passes the 20 Million Mark Best-Selling Notebook Brand Ever; RESEARCH TRIANGLE PARK, N.C. - 06 Nov 2003. In November IBM sells the 20 millionth ThinkPad -- a T41 -- since launching the ThinkPad line in 1992.

November 2003: new corporate values were published and explained on the company intranet: „Dedication to every client’s success; Innovation that matters – for our company and for the world; Trust and responsibility in all our relationships.”

A Global Volunteer Network. The IBM On Demand Community was established in 2003 as an online system for IBM employees and retirees to formalize their participation in volunteerism.

IBM Annual Report for 2003 signed by Sam Palmisano: Revenue 2002/300 in B$: 81.2/89.1. Net Income 2002/2003 in B$: 3.6/7.6. IBM today is the market leader in servers, middleware, business transformation services and strategic outsourcing. After two decades of disaggregation, the IT is re-integrating. On demand integration is also why we’ve placed a huge bet on standards, from the Internet protocols and Linux to grid computing and web services. What’s really important for you to understand is that our commitment to leadership in the high-value spaces and in innovation isn’t a mission statement. It’s a business model. We have, since 1997 exited or reduced our presence in specific areas and entered or increased our presence in distributed middleware, non-hardware maintenance services, Intel-based servers and mobile PCs, grown aggressively in emerging markets; in China, India, Russia and Brazil we generated revenue of $3 billion last year and saw double-digit growth; upped our rate of new account growth, giving us a total of 730,000 large, medium and small enterprise clients – with IBM’s small-and-medium business segment alone growing 14 percent to outperform the market in 2003. The estimated Global Services backlog, including SO, BCS, ITS and Maintenance was $120 billion at December 31, 2003.    

The company announces the IBM eServer zSeries 890, a powerful mainframe for medium-sized enterprise customers.

IBM introduces the eServer i5, the first systems to be powered by the much anticipated POWER5 microprocessors.

IBM’s World Community Grid, released in 2004, makes use of pervasive networking and crowdsourcing to apply supercomputer levels of processing power to urgent healthcare and societal needs.

When IBM  Blue Gene  was unveiled in 2004, it was both the most powerful supercomputer and the most efficient, consuming only a fraction of the energy and floor space of any other supercomputer. Enter Blue Gene and a US$100 million, five-year development effort by IBM. Designed to harness thousands of low-power, cooler-running processors, the first IBM Blue Gene/L was built at the IBM lab in Rochester, Minnesota. On September 29, 2004, the new machine surpassed NEC's Earth Simulator as the fastest computer in the world.

ARMONK, N.Y. & BEIJING - 07 Dec 2004: IBM & Lenovo Group Creates world's 3rd largest PC business with US$12 billion annual revenue for 2003.

On the morning of December 26, 2004, the largest-magnitude earthquake since 1964 rumbled under the Indian Ocean. A few hours later, waves as high as 30 meters surged over coastlines in Sri Lanka, India, Thailand, Indonesia and surrounding countries, washing away buildings, cars and people as far as 2000 meters inland. In what would become one of the worst natural disasters in history, an estimated 230,000 people would lose their lives, and more than 1.5 million others would be displaced from their homes. Within hours, country by country, IBM was assembling resources for relief, including a customized database to help track victims and goods; a wireless system running a disaster management network—in addition to material goods, counseling and training.

Since 1995, IBM has returned $59.8 billion to investors through share repurchase.

IBM Annual Report 2004 – “A good year – signed by Sam Palmisano”: Revenue 2003/2004 in B$: 89,1/96.3. Record revenue of $96.3 billion, an increase of 8 percent; Net income 2003/2004 in B$: 7.6/8.4, an increase of 11 percent. We are ranked number one in IT outsourcing, application management and e-business hosting. We continue as number one in the world in servers, with zSeries, pSeries and xSeries each increasing its share position in 2004.We continued our strong growth in sales to small and medium-sized businesses which grew by 8 percent. This past December we announced our agreement for Lenovo, China’s computer leader, to acquire IBM’s Personal Computing Division. UNDERSTANDING OUR COMPANY - AN IBM PROSPECTUS accompanies this annual report.

July 2005, The company introduces the IBM System z9 mainframe.  

IBM responds to Hurricane Katrina. When Hurricane Katrina slammed into the Gulf Coast of the United States in August 2005, IBMers responded in a variety of ways, from bringing truckloads of ice, to helping those displaced find new housing. Within hours of the storm, IBM provided equipment and supplies to the United Way and American Red Cross for processing evacuees and supporting relief workers, and quickly set up a call center to handle financial donations for relief efforts.

In October 2005, IBM became the first major corporation in the world to establish a genetics privacy policy that prohibits current or future employees’ genetic information from being used in employment decisions.

IBM's PC business was sold to Lenovo in 2005

IBM Annual Report 2005 signed by Sam Palmisano: Revenue in 2004/2005 in B$: 96.3/91.1. Our revenue was $88.3 billion, up 3 percent, without our divested personal computer business. Revenue as reported was $91.1 billion, down 5 percent. Income 2004/2005 in B$: 7.5/8.0. Pre-tax earnings from continuing operations were $12.2 billion, an increase of 15 percent. 16 acquisitions in 2005. Personal Computing Division 2004/2005 in B$: 10.7/2.9 – comparison not meaningful.    

In early 2006, IBM announced that it would freeze the pensions of about 117.000 U.S. employees starting in 2008, citing pension costs, volatility, and unpredictability. . (“A view from beneath the dancing elephant – rediscovering IBM’s corporate constitution” by Peter E. Greulich published in 2014).

The company rolls out in January 2006 the IBM System i5 line, an "all-in-one" IT platform for small and mid-sized businesses.

The company launches in April 2006 a new IBM System z9 Business Class mainframe.

The U.S. Department of Energy's National Nuclear Security Administration (NNSA) and IBM announce on June 22, 2006 that a new mark was achieved on BlueGene/L -- the world's fastest computer.

A Global Innovation Jam: IBM’s June 2006 Innovation Jam was the largest IBM online brainstorming session ever held. IBM brought together more than 150,000 employees, clients, and constituents from 104 countries and 67 companies. As a result, ten new IBM businesses were launched around innovations ranging from electronic health record systems to branchless banking. In all, IBM committed a seed investment totaling $100 million in innovative services and products as a result of the Jam.

In July 2006, the company introduces the IBM System p5 595 -- the world's most powerful server -- a 64-core speed demon capable of a record-shattering four million transactions per minute, and the IBM System p5 590 server.

IBM Annual Report 2006 signed by Sam Palmisano: Revenue 2005/2006 in B$: 91.1/91.4. Income 2005/2006 in B$: 8.0/9.4. In 2006 we did just that, setting new records in profits, earnings per share and cash performance. IBM’s strategy: the company has divested low growth commoditizing product lines, and acquired higher value opportunities to leverage IBM’s infrastructure. Organizationally, the company’s major organizations comprise a Global Technology Services segment ($32.3 billion - 24%); a Global Business Services segment ($16 billion - 12,5%); Total Global Services $48.3 billion - 36,5%; a Systems and Technology Group segment (Hardware) 12,7% , a Software segment ($18,2 billion - 20%), and a Global Financing segment (10,6%). Hardware/Financing $22 billion – 23,3%. IBM worldwide organizations: the following three companywide organizations play key roles in IBM’s delivery of value to its clients: Sales and Distribution organization and related sales channels, Research, Development and Intellectual Property, Integrated Supply Chain.  

In June 2007, the company divested its printing business.

ARMONK, N.Y. & OTTAWA, Ontario - 12 Nov 2007: IBM and Cognos today announced that the two companies have entered into a definitive agreement for IBM to acquire Cognos, a publicly-held company based in Ottawa, Ontario, Canada, in an all-cash transaction at a price of approximately $5 billion USD or $58 USD per share, with a net transaction value of $4.9 billion USD. Integrating Cognos, the 23rd IBM acquisition in support of its Information on Demand strategy, will enable new business insights to be delivered to a broader set of people across an organization, beyond the traditional users of business intelligence.

The inaugural Green 500 list - which ranks the overall TOP500 list of the world's fastest computers by energy efficiency the machines that make - shows IBM Blue Gene supercomputers, the capturing 26 of the top 27 spots. IBM also placed a total of 232 supercomputers on the Top500 list, the most of any vendor.

IBM Annual Report 2007 signed by Sam Palmisano: Revenue 2006/2007 in B$: 91.4/98.8. Income 2006/2007 in B$: 9.5/10.4. Employees and related workforce IBM/wholly owned subsidiaries 2005/2006/2007: 329.373/355.766/386.558. Five-Year comparison of selected Financial Data 2003/2007: Revenue in B$ 89.131/98.786. Net Income in B$ 6.558/10.418. I am very pleased to report to you on a superb year for our company. IBM is a different company today. Today we have a truly global supply chain. We are continuing to transform our processes and functions to move IBM to this profoundly new model of the corporation, which we call the Globally Integrated Enterprise. We exited businesses like PCs and hardware disk drives – businesses that we have invented. We shifted our internal R&D and have made more than 60 acquisitions over the past five years. Put it all together, and IBM today is very different from what it was when we entered the decade. So we changed our own processes and organization to push decision-making and delegation closer to the marketplace. We delivered our strongest revenue growth since 2003 and our strongest profit performance in more than a decade. Our revenue as reported was a record $98.8 billion, up 8 percent. Pretax income from continuing operations was $14.5 billion, an increase of 9 percent and another record. Earnings per share: we have continued to achieve strong EPS growth. Last year was another record, we diluted earnings per share from continuing operations of $7.18, up 18 percent. This marked 20 straight quarters of EPS growth. Our 2007 cash investment was $1 billion for 12 acquisitions – six of them in key areas of software. And after investing $6.2 billion in R&D and $5 billion in net capital expenditure, we were able to return a record of nearly $21 billion to you - $18.8 billion through share repurchase and $2.1 billion through dividends. This strengthened business model and our excellent performance in 2007 we have increased our confidence that we will meet our 2010 objective of $10 to $11 in earnings per share. In 2007, for the 15th consecutive year, IBM was issued more U.S. patents (3.125) than any other company. We are creating a new Growth Markets organization, to be headquartered in Shanghai. We are helping retiring IBMers to transition to second careers in teaching, government service and nongovernmental organizations.  

Press Release: May 13, 2008 HP to Acquire EDS for $13.9 Billion. EDS shareholders to receive $25.00 per share in cash for each EDS share Transaction expected to more than double HP's revenue from services, furthering its standing as world's largest technology company. By acquiring Electronic Data Systems (EDS) in 2008 for $13,9 billion, Hewlett-Packard became a major player in IT services (second in the industry to IBM). Nearly a decade ago, Hewlett-Packard acquired Compaq for nearly twice that amount, $25 billion. Hewlett-Packard is the largest personal computer firm, and despite its diversification  to develop a major IT services business, it remains fundamentally vulnerable to declines in the personal computer market.

Roadrunner Breaks Petaflop Milestone Date added: 18 Jun 2008. Lead engineer Don Grice of IBM inspects the world's fastest computer in the company's Poughkeepsie, NY plant.  The computer nicknamed "Roadrunner" was built for the Department of Energy's National
Nuclear Security Administration and will be housed at Los Alamos National Laboratory in New Mexico. The computer packs the power of 100,000 laptops -- a stack 1.5 miles high. Roadrunner will primarily be used to ensure national security, but will also help scientists perform research into energy, astronomy, genetics and climate change. The IBM computer built for the “Roadrunner project” at Los Alamos National Lab in 2008 was the first in the world to operate at speeds faster than one quadrillion calculations per second—one petaflop. The world’s first “hybrid” supercomputer (using two different processor architectures), Roadrunner is twice as energy-efficient as the next computer—using about half the electricity to maintain the same level of computing power.  A gigaflop is a billion floating-point operations per second, a teraflop is one trillion, and a petaflop is a quadrillion. FLOPS particularly matter when you are talking about high-performance computing. Ever since IBM started creating machines for business in the early days of the twentieth century, the goal has always been to help clients increase efficiency and speed to improve their bottom line. From punched cards, to tapes, to electric typewriters—it was all about enhancing productivity. But when modern-day computers came on the scene, followed by the Internet, something new emerged: data. And since that time, the amounts of data and the number of data sources has grown exponentially every day, month and year—and there’s no sign of slowing down. This is the era of “Big Data.” Assembled and tested at the IBM facility in Poughkeepsie, NY, prior to shipping to the client, the Roadrunner supercomputer’s numerous IBM BladeCenter ® racks and cabinets occupied the floor space of a moderately sized warehouse. It would eventually require 21 tractor trailer trucks to deliver it to Los Alamos.

In 2008, IBM launched the Smarter Planet agenda as a way to help forward-thinking leaders in business, government and civil society around the world capture the potential of smarter systems to achieve economic growth, near-term efficiency, sustainable development and societal progress. Predicated on the world becoming more instrumented, interconnected and intelligent, Smarter Planet is IBM’s latest “big bet” on the future, with wide-ranging possibilities for improving the transportation, education, energy, food and water systems that run our everyday work and personal lives.

IBM wins National Medal of Technology and Innovation. IBM CEO Sam Palmisano accepts the 2008 National Medal of Technology and Innovation, which was awarded to IBM for the Blue Gene family of supercomputers.

The IBM Corporate Service Corps (CSC) program was launched in 2008 to create leadership development opportunities for IBMers while delivering expertise-based service for the communities and organizations in emerging markets. To date 1000 IBMers have participated in CSC projects that tackle issues from local economic development, entrepreneurship, transportation and education, to government services, healthcare and disaster recovery. Corporate Service Corps teams now serve in over twenty countries around the world.

IBM Annual Report 2008 signed by Sam Palmisano: Revenue 2007/2008 in B$: 98.8/103.6. Income 2007/2008 in B$: 10.4/12.3.  As I write to you, the global economy is experiencing profound disruption. You need to know, in this time of turmoil, that your company is well positioned to continue delivering strong results, as we have been doing and did again in 2008 – achieving record revenue, record pre-tax earnings, record earnings per share and record free cash flow. Our confidence is grounded in the strategic transformation of IBM over the past several years and the focused execution of nearly 400.000 dedicated and innovative women and men around the world. Three fundamental shifts in the world: 1. The reality of global integration. 2. The emergence of a new computing model … We are now living in a world that is: instrumented.  Interconnected. Intelligent: we now have the computing power, advanced analytics and new computing models (such as “cloud”) to make sense of the world’s digital knowledge and pulse, and to turn mountains of data into intelligence. 3. Innovation and Integration. … more than 4.000 U.S. patents IBM received in 2008 (our 16th straight year of patent leadership). IBM’s portfolio today is built around networked, modularized and embedded technologies, such as service-oriented architecture (SOA). More than 90 percent of our segment profit in 2008 was from software, services and financing. Our cash investment was $6.3 billion for 15 acquisitions – 10 of them in key areas of software. And after investing $6.3 billion in R&D and $4.5 billion in net capital expenditures, we were able to return more than $13 billion to you - $10.6 billion through share repurchase and $2.6 billion through dividends. Last year’s dividend increase was 25 percent, marking the 13th year in a row in which we have raised our dividend. Worldwide organizations: Sales and Distribution; Research, Development and Intellectual Property; Integrated Supply Chain; Integrated Technology Delivery, Business Process Delivery. The decline in server revenue reflects a significant slowdown in the x86 market, especially in the second half of 2008, as clients are virtualizing and consolidating workloads onto more efficient platforms such as POWER and mainframe.                 

News around the Globe Bob Moffat Arrested October 17, 2009 by rob   Filed under Breaking News. The largest insider trading case has come outside. International Business Machines Corporation (IBM), is facing an inside fraud, in which the vice president of IBM, Robert Moffat, aka Bob Moffat, has been arrested along with many other executives, involved in the fraud. Robert Moffat is working at the position of senior vice president and group executive of IBM, a Systems and Technology Group since 2008, he joined IBM in 1978 and spent most of his tenure in computer business and held many top and executive positions. According to FBI statement, this is the largest case of conspiracy and fund inside- trading in the US history. Arrests of a high-level management and executives of Intel, the largest chip making company worldwide, has also been made. Robert Moffat’s dreams to be CEO at IBM have all but swept with the high profile case. I.B.M. Executive in Insider Case Is Put on Leave. The International Business Machines Corporation said Monday that Robert W. Moffat Jr., senior vice president of the systems
and technology group would no longer serve as an officer of the company, The Associated Press reports. Mr. Moffat had been considered
a top candidate to succeed I.B.M.’s chief executive, Samuel J. Palmisano. Bloomberg: Former IBM Executive Robert Moffat Gets Six Months in Galleon Group Case By Patricia Hurtado - Sep 13, 2010 9:47 PM GMT+0200.

November 19, 2009: World’s best companies for leaders. The most successful businesses know that developing talent is their top priority. Fortune ranks the companies that do it best. 1. IBM, Headquarters: Armonk, NY Revenue: $103.6 billion. Employees: 398,455. CEO: Samuel Palmisano. This technology giant has deep profiles on 60,000 employees in -- or who have the potential to be in -- leadership roles. With a workforce of almost 400,000, that's a significant and impressive portion of the company's employee base, and it spans the globe. Where the average company might offer several hundred employees an international opportunity for two or three years, IBM gives "mobility assignments" to thousands for three to six months. "It's an investment," says Ted Hoff, vice president with the company's Center for Learning and Development. "We want all IBM leaders to have cross-geographic experience." 2. Procter & Gamble; 3. General Mills; 4. McKinsey; 5. ICICI Bank; 6. McDonald's; 7. General Electric; 8. Titan Cement; 9. China Mobile Communications Corp. – Shanghai; 10. Hindustan Unilever.

In 2009, IBM announced the availability of its stream computing software, a breakthrough in real-time data analytics. Stream computing gathers multiple streams of data “on the fly,” using advanced algorithms to deliver nearly instantaneous analysis to decision makers.

IBM Annual Report 2009 signed by Sam Palmisano: Revenue 2008/2009 in B$: 103.6/95.8. Income 2008/2009 in B$: 12.3/13.4. When I wrote to you a year ago, the global economy was experiencing profound disruption. The financial system was freezing up. Many companies and entire industries were pulling in their horns, hoping simply to ride out the storm. IBM’s own industry was no different. I am happy to report that your company has continued to outperform our industry and the market at large. We delivered strong results in 2009. Once again achieving record pre-tax earnings, record earnings per share and record free cash flow – despite reduced revenues. At the same time, we continued to deliver superior returns, to you, our owners. Most importantly, we are all well positioned to grow as the economy begins to recover. Two thousand nine was a tough year by any measure. Of the more than 4,900 U.S. patents IBM received in 2009 (our 17th straight year of patent leadership, and a record for any company), more than 70 percent were for software and services. Today, many of our competitors are emulating our moves. Our investments in 2010 are focused on four high-potential opportunities. 1. Growth Markets. Analytics. We have built the industry’s premier analytics practice, with 4,000 consultants, mathematicians and researchers, as well as leading-edge software capabilities – bolstered by key acquisitions such as Cognos and SPSS. 3. Cloud and Next-Generation Data Center. 4. Smarter Planet. We developed this agenda and strategic initiative in the summer of 2008, and we launched it that autumn – at the peak of the economic crisis. From 2000 to 2009 we made 108 strategic acquisitions to strengthen our portfolio of products and offerings. This has changed our business mix toward higher-value, more profitable segments of the industry. Since 2005, global integration has enabled IBM to cut expenses by $5 billion and improve service quality, speed and risk management in very dynamic environments. Cloud Computing. “Cloud” is an emerging consumption and delivery model for many IT-related services. Traditional enterprise IT will increasingly integrate with these new cloud deployments, delivered as service via the Internet (also known as public clouds) or behind a firewall (private clouds.) In discussions with enterprise clients, most are initially focused on private cloud implementations, the middle-ground between the traditional enterprise IT and public clouds.

Global computer sales expected to rise 20% in 2010 Posted by digital home on March 4, 2010. The number of personal computers sold worldwide in 2010 is expected to increase 19.7 percent in 2010 to 366.1 million, from 305.8 million units shipped in 2009, according to a revised forecast from Gartner. Worldwide PC spending is forecast to increase 12.2 percent from 2009 to reach $245 billion in 2010.

May 12, 2010 -- 07:52 GMT (00:52 PDT) Summary: IBM CEO Sam Palmisano doesn't talk publicly all that often, but when he brings a little heat. He said IBM's earnings will double in 2015; mocked Oracle and IT consumerization and said the company will continue spend $20 billion
on acquisitions over the next 5 years.  Palmisano said the company will deliver earnings of at least $20 a share in 2015 and generate $100 billion in cash flow between now and then. IBM will also spend $20 billion on its acquisitions between 2011 and 2015. He also mocked the fashionable view that consumer technology will dominate the enterprise. Palmisano, speaking during IBM's investor day Wednesday, almost seems to relish the fact that IBM may not be all that fashionable. He noted his view is decidedly East Coast, but it's a bit hard to argue
with IBM's results. Palmisano also thanked Oracle CEO Larry Ellison for saying he wanted his company to be like T.J. Watson's IBM. "He got the timeline wrong, but we'll take the compliment. We don't get many from the West Coast," said Palmisano. A few years ago, IBM laid out that it would deliver earnings of at least $10 a share or so and garnered a few doubters. Big Blue handily topped those targets. Palmisano recapped the story most of us know too well. IBM ditched businesses that didn't grow, doubled down on software and services and bet big on analytics. Big Blue will take the current model and accelerate it.

IBM built four new laboratories in the past two decades -The company now has 9 research laboratories worldwide: Almaden, San Jose, California 1955; Zurich, Switzerland 1956; Watson, New York and Maine 1961; Haifa 1972; Tokyo 1982; Austin 1995; Beijing, China 1995; Delhi and Bangalore, India 1998; Sao Paolo and Rio de Janeiro, Brasilia 2010. 

In 2010, IBM’s Smarter Planet initiative generated US$3 billion in revenue and double-digit growth from more than 6000 client engagements.

IBM Annual Report 2010 signed by Sam Palmisano: Revenue 2009/2010 in B$: 95.8/99.9. Income 2009/2010 in B$: 13.4/14.8. I am pleased to report that IBM had another strong year in 2010. Your company continued to outperform our industry and the market at large. We once again achieved record pre-tax earnings, record earnings per share ($11,52), record free cash flow and improved profit margins, with increased revenues. Now that we have shown we can deliver results with consistency, we are doing it again through the introduction last year of our 2015 Road Map. We made 116 strategic acquisitions over the course of the decade, largely in software and services. IBM received 5.896 U.S. Patents in 2010 (our 18th straight year of patent leadership). We decided four years ago to introduce our 2010 Road Map. To some it seemed foolhardy. To my knowledge no company in our industry had done this before. As you know, we surpassed our 2010 goal of $10 to $11 in earnings per share. We are doing it again through the introduction last year of our Road Map 2015. It isn’t just a list of targets; it’s a management model, organized around the major drivers of IBM’s earning per share performance. Those are: operating leverage, share repurchase and growth strategies. We will continue returning value to you. Our road map calls for $50 billion in anticipated share repurchases and $20 billion in dividends. Four growth priorities: Growth Markets, our Growth Markets Unit accounted for 21 percent of IBM’s geographic revenue in 2010, we are aiming to approach 30 percent in 2015, today our investments are fueling growth initiatives that are expected to drive $20 billion in incremental revenue by 2015; Cloud $7 billion in revenue by 2015; Business Analytics and Optimization, the research firm IDC predicts that global data volumes will increase by 29 times over the next 10 years – to 35 zettabytes (A zettabyte is followed by 21 zeros.), IBM spotted this emerging needs early, building the world’s leading analytics practice, with 7,800 expert consultants, we have received more than 500 analytics patents, under our Road Map, analytics is expected to grow to $16 billion in revenue; Cloud and Smarter Computing, our road map calls for $7 billion in revenue from cloud by 2015; Smarter Planet – capture the opportunity in key, high-growth industries (such as healthcare, retail, banking and telecommunications), our road map calls for Smarter Planet solutions to grow to $10 billion in revenue by 2015. Over the last ten years, we have nearly tripled our EPS, added $109 billion in free cash flow, returned $107 billion to you, tripled our software profits and increased the share of our revenue from growth markets from 11 to 21 percent, excluding divested PCs and printers. Over the next five years we expect to grow our operating (non-GAAP) earnings to at least $20 per share, to generate another $100 billion free cash flow, to return an additional $70 billion to you, to grow our software profit to about half of total segment profit and to increase growth market’s contribution to our revenue to nearly 30 percent. … Breakthroughs such as Watson, the computer that recently defeated the two all-time champions on the television quiz show, Jeopardy! Watson’s vast analytic capacity represents a new stage in computing’s ability to tackle the world’s most pressing needs where and when they really emerge—in the natural language of healthcare, banking, government, retail and more. Over the past decade, IBM has built a record of leadership … This wasn’t new. It’s what we have been doing for 100 years. Key objectives over the next five years: $100 billion in free cash flow; $70 billion of capital returned to our shareholders; $20 billion in spending on acquisitions; software business becomes about half of segment profit; growth markets approach 30 percent of geographic revenue. Key Drivers for 2015 EPS Road Map: Revenue Growth, Operating Leverage, Share Repurchase. Since 1915, IBM stock has appreciated more than 40,000 its original value, over that same period the Dow Jones Industrial Average has appreciated about 125 times. IBM’s clear strategy has enabled steady results, while expanding its offerings and addressable markets. The key tenets of this strategy are: Deliver value to enterprise clients through integrated business and IT innovation; shift the business mix to higher-value areas; and Become the premier globally integrated enterprise. The company’s business model is built to support two principal goals: helping clients succeed in delivering business value by becoming more innovative, efficient and competitive through the use of business insight and IT solutions; and providing long-term value to shareholders. IBM Worldwide Organizations: Sales and Distribution; Research, Development and Intellectual Property; Enterprise Transformation: shared integrated operations, services and end-to-end process transformation; Integrated Supply Chain. MIPS shipments increased 22 percent in 2010 versus 2009. The company had over 1,000 competitive unit displacements in 2010, which drove approximately $1 billion of business. 60% from Oracle Unix Installed accounts and 30 percent from Hewlett Packard Installed accounts. In addition, the company also drove x86 consolidations to Power Systems with over 100 competitive wins. Employees and Related Workforce 2008/2010: 398.455/426.751. Five-Year Comparison of Selected Financial Data 2006/2010: Revenue B$ 91,4/99,9. Net Income B$: 9,5/14.8.       

On February 8, 2011, IBM announced the 10-petaflop Blue Gene/Q supercomputer “Mira,” in collaboration with the US Department of Energy's (DOE) Argonne National Laboratory located near Chicago, Illinois. Today, 17 of the top 20 most energy-efficient supercomputers in the world are built on IBM high-performance computing technology, according to the latest supercomputing “Green500 List,”  including the Blue Gene/Q, which was named the “Greenest Supercomputer in the World” by Green500.org in November 2010.

A Computer Called Watson. IBM’s computer, code-named “Watson” leverages leading-edge Question-Answering technology, allowing the computer to process and understand natural language. It incorporates massively parallel analytical capabilities to emulate the human mind’s
ability to understand the actual meaning behind words, distinguish between relevant and irrelevant content, and ultimately, demonstrate confidence to deliver precise final answers. In February of 2011, Watson made history by not only being the first computer to
compete against humans on television’s venerable quiz show, Jeopardy!, but by achieving a landslide win over prior champions Ken Jennings and Brad Rutter. On February 14–16, 2011, IBM’s Watson computer was put to the test, competing in three episodes of Jeopardy! against the two most successful players in the quiz show’s history: Ken Jennings and Brad Rutter. Two “Jeopardy!” champions, Ken Jennings, left, and Brad Rutter, competed against a computer named Watson, which proved adept at buzzing in quickly. By JOHN MARKOFF Published: February 16, 2011 YORKTOWN HEIGHTS, N.Y. — In the end, the humans on “Jeopardy!” surrendered meekly. "The hard part for the computer is finding and justifying the correct answer," says Dr. David Ferrucci, the "Principal Investigator" at IBM Research who led the Watson project. "For each of thousand of plausible answers, Watson gathers evidence and uses thousands of algorithms to understand what's most likely to be the right answer."

IBM's Sam Palmisano: A super second act. By Jessi Hempel, writer March 4, 2011: 5:00 AM ET CEO Sam Palmisano took a revitalized IBM and made it the envy of the tech world and darling of investors. His secret? He's restored Big Blue's focus on innovation and set it up for an even brighter future. (Move over, Lou Gerstner.) Now, here's what you might not know: Nine years after Gerstner stepped down as CEO, IBM (IBM) is financially and strategically stronger and, yes, sexier than ever -- all thanks to Sam Palmisano, Gerstner's successor.

IBM launched the Corporate Service Corps in 2008 as an element of its Global Citizen’s Portfolio—a collection of policy and program innovations to help IBMers become effective twenty-first century global professionals and global citizens. In that regard, the Corps’ initial aim was to develop the skills and experience to succeed as a new generation of global leaders. By early 2011, 1000 IBMers had participated in 100 engagements in nearly 20 countries, including Vietnam, India, Kenya, Nigeria, Egypt, Brazil and Romania.

ARMONK, N.Y. - 25 Oct 2011: The IBM board of directors has elected Virginia M. Rometty president and chief executive officer of the company, effective January 1, 2012. She was also elected a member of the board of directors, effective at that time. Ms. Rometty is currently IBM senior vice president and group executive for sales, marketing and strategy. She succeeds Samuel J. Palmisano, who currently is IBM chairman, president and chief executive officer. Mr. Palmisano will remain chairman of the board. “Ginni Rometty has successfully led several of IBM’s most important businesses over the past decade – from the formation of IBM Global Business Services to the build-out of our Growth Markets." “Ginni Rometty has successfully led several of IBM’s most important businesses over the past decade – from the formation of IBM Global Business Services to the build-out of our Growth Markets Unit,” Mr. Palmisano said. “But she is more than a superb operational executive. With every leadership role, she has strengthened our ability to integrate IBM’s capabilities for our clients. She has spurred us to keep pace with the needs and aspirations of our clients by deepening our expertise and industry knowledge. Ginni’s long-term strategic thinking and client focus are seen in our growth initiatives, from cloud computing and analytics to the commercialization of Watson. She brings to the role of CEO a unique combination of vision, client focus, unrelenting drive, and passion for IBMers and the company’s future. I know the board agrees with me that Ginni is the ideal CEO to lead IBM into its second century.”

Retired chief leaves behind a refashioned I.B.M. January 3, 2012. During his tenure, I.B.M. has been a textbook case of how to drive change in a big company, when so much of the study of business innovation focuses on start-ups and entrepreneurs. When Mr. Palmisano was an executive assistant to John F. Akers, then the chairman, in 1989 and 1990, he had lunch with Thomas Watson Jr., a former chairman, once a month. The Watsons, he says, always defined I.B.M. as a company that did more than sell computers; they believed that it had an important role to play in solving social challenges. “It’s old-fashioned, but it’s motivational,” he said. And it resonates with the young people I.B.M. is recruiting these days, he said.

IBM Annual Report 2011 signed by Virginia M. Rometty. Revenue 2010/2011 in B$: 99.9/106.9. Net Income 2010/2011 in B$: 14.8/15.9.
I am pleased to report that IBM had another strong year in 2011. Our revenue in 2011 was $107 billion, up 7 percent. We grew operating pre-tax income by 9 percent, to $21.6 billion, our highest ever.  Earnings per share: Last year was another record, with diluted operating earnings per share of $13.44, up 15 percent. This marked nine straight years of double-digit EPS growth. A letter from the Chairman of the Board signed by Samuel J. Palmisano. The estimated Global Services Backlog at December 31, 2011 was $141 billion, a decrease of $1.7 billion (flat adjusted for currency) compared to the December 31, 2010 balance. Five-Year Comparison of Selected Financial Data: Revenue 2007/2011 in B$ 98.8/106.9. Net Income 2007/2011 in B$: 10.4/15.9. Earnings per share diluted operating (non.-GAAP) in $: 7.46/13.44.