Data Monitor

IBM Corporation
Company Profile
Reference Code: 2CCC78C4-8E77-4413-81BC-AE12C4655D2C Publication Date: Jan 2005
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IBM Corporation Datamonitor (Published Jan 2005)
2CCC78C4-8E77-4413-81BC-AE12C4655D2C Page 2
This profile is a licensed product and is not to be photocopied
IBM Corporation
Table of Contents
TABLE OF CONTENTS Facts & Overview........................................................... 4 Business Description .................................................... 5 History ............................................................................ 7 Major Products & Services ........................................... 9 Revenue Analysis ........................................................ 12 Key Employees ............................................................ 13 Key Employee Biographies ........................................ 15 Locations & Subsidiaries............................................ 23 Company View ............................................................. 24 SWOT Analysis ............................................................ 32 Top Competitors .......................................................... 37
IBM Corporation
Company Overview
COMPANY OVERVIEW
International Business Machines (IBM) is the worlds largest information technology (IT) company. It offers a variety of services ranging from business transformation consulting to software, hardware, fundamental research, financing and the component technologies used to build larger systems. IBM has operations in over 160 countries worldwide including the UK, Japan, Italy, Germany, France, China and Canada. The company is headquartered in Armonk, New York and employs about 340,000 people. The company recorded revenues of $89.1 billion during the fiscal year ended December 2003, an increase of 9.8% over 2002. The increase was primarily attributable to stronger demand associated with the improving US economy and continued market share gains. The gross profit of the company during fiscal 2003 was $33 billion, an increase of 9% over fiscal 2002. The net profit was $7.6 billion during fiscal year 2003, an increase of 110.6% over 2002.
KEY FACTS
Head Office New Orchard Road Armonk NY-10504 USA Phone Fax Web Address Ticker # Employees Turnover (US$ Mn) Financial Year End 1 914-499-1900 1 914-765-7382 http://www.ibm.com New York: IBM 337,462 89,100 December
IBM Corporation
Business Description
BUSINESS DESCRIPTION
IBM is worlds largest IT company. IBM holds more than 22,000 patents and markets more than 100 products and services. IBMs clients include sole proprietorships, large organizations, government organizations and companies from sectors ranging from financial services, public, industrial, distribution and communications industries. The company is organized into five business divisions; global services segment; three hardware product segments systems group, personal systems group and technology group; software segment; global financing segment, and enterprise investments segment. The global services division manages the companys IT services business and offers a wide variety of business and IT services including consulting, software and system implementation, and outsourcing. The unit is organized into business consulting, infrastructure services and On Demand services. The business consulting group comprises the PriceWaterhouseCoopers consulting unit, which IBM acquired in 2002. The infrastructure services group includes implementation, hosting and strategic outsourcing. The On Demand services draw from IBMs consulting and infrastructure capabilities to offer utility computing capabilities. The IBM hardware segment includes servers, storage devices and intellectual property licensing. IBM reports revenue from three sub segments in hardware: systems, personal systems and technology. The systems group includes servers, storage and technology. The main systems products are Z Series mainframes; X Series Intel-based servers; I Series Servers, which run IBMs OS 400; P Series UNIXbased servers; blade servers; and storage devices (mainly disk systems, SANs, and tape and optical drives). The personal systems group includes all notebooks, desktops and related peripheral hardware such as monitors. IBM ThinkPad notebooks include the R, T, X and G series. The IBM desktop line includes the A, M and S series. The technology group generates revenue by licensing IBMs more than 22,000 active patents. IBM is a leading provider of PCs and servers. IBM has number three position in the PC market and top share in the server market. IBM has increased its share of the server market to 31% in 2003 from 27% in 1999. The IBM software segment comprises five major brands: WebSphere, DB2, Lotus, Tivoli and Rational. IBM also sells a wide variety of data management tools and other middleware. IBM is the second-largest software company in the world in terms of revenue.
IBM Corporation
Business Description
IBM provides financing for customers and records the fees generated from these activities as global financing revenue. IBM is the worlds largest vendor of IT financing services, offering a wide variety of programs to 125,000 customers in 40 countries. Global financing consists of three lines of business: customer financing, commercial financing and remarketing. Customer financing provides lease and loan financing to end users and internal customers for terms generally between two and five years. Internal financing is predominantly in support of global services long-term customer service contracts. Commercial financing provides primarily short-term inventory and accounts receivable financing to dealers and remarketers of IT products. The enterprise investments and other segment include all revenue from strategic investments and other non-operating income. The enterprise investments segment develops and provides industry-specific IT solutions supporting the hardware, software and global services segments of the company. Primary product lines include product life cycle management software and document processing technologies. Product life cycle management software primarily serves the industrial sector and helps clients manage the development and manufacturing of their products. Document processor products service the financial services sector and include products that enable electronic banking.
IBM Corporation
History
HISTORY
IBM was incorporated as the Computing Tabulating Recording Company in 1911. The company was formed as a result of the consolidation between the Computing Scale Company of America, the Tabulating Machine Company, and The International Time Recording Company of New York. In 1924, the company changed its name to International Business Machines Corporation. In 1981, the company introduced the IBM Personal Computer or PC, allowing the use of computers in schools, homes and businesses. Components for the computer were sourced from outside the company. The processor chip came from Intel and the operating system, called DOS (Disk Operating System), came from Microsoft. The IBM token-ring local area network, introduced in 1985, permitted personal computer users to exchange information and share printers and files within a building or complex. IBM introduced the ThinkPad in 1992, the first in a series of notebook computers to be manufactured by the company. In 1995, IBM acquired Lotus Development and Tivoli Systems. In 1997, IBM demonstrated computings potential with Deep Blue, a 32node IBM RS/6000 SP computer programmed to play chess on a world class level. In 2002, IBM acquired PWC Consulting, the global management consulting and technology services unit of PriceWaterhouseCoopers. IBM sold most of its hard disk drive operations to Hitachi in 2002. The sale involved the creation of a joint venture called Hitachi Global Storage Technologies, which was 70%-owned by Hitachi. IBM acquired Rational Software in February 2003. Rational Software was a provider of open, industry standard tools, best practices and services for developing business applications and building software products and systems. In November 2003, Microsoft announced that it would be using IBM chips in its next generation Xbox game and consumer electronics devices. In the same month, IBM bought Productivity Solutions, a maker of automated self-checkout software used in retail and grocery stores. IBM acquired Green Pasture Software, a privately-held provider of document management software in December 2003. In March 2004, IBM acquired the Australian and New Zealand operations of network services integrator Logicalis Group. This was followed by the announcement of plans to acquire Daksh, Indias third largest business outsourcing company.
IBM Corporation
History
In April 2004, IBM completed the acquisition of Trigo Technologies. Trigos product information management capabilities and technology were integrated into the IBM software group. Later in the same month, IBM acquired the business continuity services unit of Schlumberger. In June 2004 the company acquired Candle Corporation, a service provider. The company was integrated into IBMs software group. In July 2004 the company acquired Alphablox. During December 2004, IBM sold its PC hardware division to Lenovo of China and acquired KeyMRO, a French Internet-based procurement service firm, for an undisclosed sum.
IBM Corporation
Major Products & Services
MAJOR PRODUCTS & SERVICES

IBM is worlds largest information technology (IT) company. It offers a variety of services ranging from business transformation consulting to software, hardware, fundamental research, financing and the component technologies used to build larger systems. The companys products and services are categorized under the following different segment divisions: Products: Personal computing: Monitors Handhelds Servers: Blades Mainframe Intel processor-based Midrange UNIX Clusters Storage: Disk systems Hard disk drives Microdrives Tape systems SAN, NAS and iSCSI Storage software Software: Application and web development tools Applications - desktop and enterprise Application servers Business integration Collaboration and knowledge Database and data management
IBM Corporation Datamonitor (Published Jan 2005) This profile is a licensed product and is not to be photocopied 2CCC78C4-8E77-4413-81BC-AE12C4655D2C Page 9
IBM Corporation
e-learning software Enterprise messaging Host transaction processing Networking Operating systems Portals - commerce - personalization Security Storage management Systems management Wireless - voice - pervasive Other: Upgrades, accessories and parts IBM certified used equipment Microelectronics Networking Printing systems Point-of-sale systems and kiosks Services: Business Consulting Services: Application management Business intelligence Customer relationship management e-business integration Financial management Portals, knowledge and content management Procurement Product lifecycle management Security and privacy Strategic change Supply chain and operations Wireless e-business Infrastructure Services: Application management e-business hosting Technical support Continuity and recovery
IBM Corporation
Maintenance Networking Security and privacy Storage Strategic outsourcing Wireless On-Demand Services: Applications and infrastructure Business processes Organization and culture Other Services: PC services Financing Technology design services Technical training
IBM Corporation
Revenue Analysis
REVENUE ANALYSIS
IBM recorded revenues of $89.1 billion during the fiscal year ended December 2003, an increase of 9.8% over 2002. The increase was primarily attributable to stronger demand associated with the improving US economy and continued market share gains. For the fiscal year 2003, revenues from the US, the companys largest geographical market, were $38.1 billion, an increase of 4.5% over fiscal 2002. ABC generates revenues through its five business divisions: global services (47.8% of total revenues during fiscal 2003), hardware group (31.8%), software (16%), global financing (3.2%) and enterprise investment/others (1.2%). Revenues by Division During the fiscal year 2003, global services recorded revenues of $42.6 billion, an increase of 17.3% over fiscal 2002. The increase was driven by strategic outsourcing revenues and the business consulting group revenues as a result of the acquisition of Pricewaterhouse Coopers. The software group recorded revenues of $14.3 billion, an increase of 9.2% over fiscal 2002. The hardware group recorded revenues of $28.3 billion, an increase of 2.9% over fiscal 2002. The increase was driven by increase in sales of pSeries, xSeries and zSeries servers and Storage Systems. The global financing division recorded revenues of $2.8 billion, a decrease of 12.6% over fiscal 2002. The decline in revenues was due to lower interest rates and decline in the average asset balance. The enterprise investment division recorded revenues of $1.1 billion, an increase of 5.3% over fiscal 2002.
IBM Corporation
Key Employees
KEY EMPLOYEES
Name Samuel Palmisano Job Title Chairman of the Board and Chief Executive Officer (Since: 1997) Cathleen Black Kenneth Chenault Carlos Ghosn Nannerl Keohane Charles Knight Lucio Noto John Slaughter Joan Spero Sidney Taurel Alex Trotman Charles Vest Lorenzo Zambrano Nicholas Donofrio Director Director Director Director Director Director Director Director Director Director Director Director Senior Vice President, Technology & Manufacturing (Since: 1995) Douglas Elix Senior Vice President, Sales and Distribution (Since: 2004) Bruce Harreld Jesse Greene Paul Horn Jon Iwata Senior Vice President, Strategy (Since: 1995) Vice President and Treasurer (Since: 2002) Senior Vice President, Research (Since: 1996) Senior Vice President, Communications (Since: 2002) John Joyce Senior Vice President, Global Services (Since: 2004) John Kelly Senior Vice President and Group Executive, Technology Systems and Technology Group (Since: 2000) Abby Kohnstamm Michael Lawrie Senior Vice President (Since: 1998) Senior Vice President and Group Executive, IBM Global Sales and Distribution (Since: 2002) Edward Lineen Senior Vice President and General Counsel (Since: 2002) Senior Management Senior Management Senior Management Senior Management Senior Management Senior Management Senior Management Senior Management Senior Management Senior Management 2,390,000 (USD) Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Non Executive Board Senior Management 1,820,000 (USD) Board Executive Board Total Annual Comp. -
IBM Corporation
Key Employees
Mark Loughridge
Senior Vice President and Chief Financial Officer (Since: 2004)
Senior Management
Randall MacDonald
Senior Vice President, Human Resources (Since: 2000)
Senior Management
Steven Mills
Senior Vice President and Group Executive, Software Group (Since: 2000)
Senior Management
Robert Moffat
Senior Vice President, Integrated Sup- Senior Management ply Chain (Since: 2002)
Daniel Donnell
Vice President Assistant General Counsel and Secretary (Since: 1998)
Senior Management
Linda Sanford
Senior Vice President, Enterprise On Demand Transformation and Information Technology (Since: 2000)
Senior Management
Stephen Ward
Senior Vice President and General Manager, Personal Systems Group (Since: 2003)
Senior Management
William Zeitler
Senior Vice President and Group Executive, Systems and Technology Group (Since: 2000)
Senior Management
IBM Corporation
Key Employee Biographies
KEY EMPLOYEE BIOGRAPHIES

Samuel Palmisano
Board: Executive Board Job Title: Chairman of the Board and Chief Executive Officer Since: 1997 Age: 52 Mr Palmisano was elected chairman in 2002, and has served as chief executive officer since 2002. Prior to the current appointment, he was president and chief operating officer. Mr Palmisano has held a number of positions during his IBM career, including senior vice president and group executive for IBMs Enterprise Systems Group. Prior to that, he was senior vice president and group executive for IBM Global Services. Mr Palmisano has served as senior vice president and group executive for IBMs Personal Systems Group; led IBMs strategic outsourcing business; and was president of the Integrated Systems Solutions Corporation (ISSC), an IBM wholly owned subsidiary, and now part of IBM Global Services. Before joining ISSC, he was IBM senior managing director of operations for IBM Japan.
Cathleen Black
Board: Non Executive Board Job Title: Director Ms Black is president of Hearst Magazines.
Kenneth Chenault
Board: Non Executive Board Job Title: Director Mr Chennault is chairman and chief executive officer of American Express Company.
Carlos Ghosn
Board: Non Executive Board Job Title: Director Mr Ghosn is co-chairman, president and chief executive officer of Nissan Motor Company.
Nannerl Keohane
IBM Corporation
Board: Non Executive Board Job Title: Director Mr Keohane is president of Duke University.
Charles Knight
Board: Non Executive Board Job Title: Director Mr Knight is chairman of Emerson Electric Company.
Lucio Noto
Board: Non Executive Board Job Title: Director Mr Noto is managing partner of Midstream Partners.
John Slaughter
Board: Non Executive Board Job Title: Director Mr Slaughter is president and chief executive officer of National Action Council for Minorities in Engineering.
Joan Spero
Board: Non Executive Board Job Title: Director Mr Spero is president of Doris Duke Charitable Foundation.
Sidney Taurel
Board: Non Executive Board Job Title: Director Mr Taurel is chairman, president and chief executive officer of Eli Lilly and Company.
Alex Trotman
Board: Non Executive Board Job Title: Director
IBM Corporation
Mr Trotman is retired chairman of Imperial Chemical Industries.
Charles Vest
Board: Non Executive Board Job Title: Director Mr Vest is president of Massachusetts Institute of Technology.
Lorenzo Zambrano
Board: Non Executive Board Job Title: Director Mr Zambrano is chairman and chief executive officer of CEMEX, S.A. de C.V.
Nicholas Donofrio
Board: Senior Management Job Title: Senior Vice President, Technology & Manufacturing Since: 1995 Age: 58 Mr Donofrio leads the strategy for developing and commercializing advanced technology across IBMs global operations. He also heads the IBM Technology Team, is a member of the IBM Strategy Team, and is chairman of the board of governors for the IBM Academy of Technology. Mr Donofrio joined IBM in 1967 and spent the early part of his career in integrated circuit and chip development as a designer of logic and memory chips. He held numerous technical management positions and, later, executive positions in several of IBMs product divisions.
Bruce Harreld
Board: Senior Management Job Title: Senior Vice President, Strategy Since: 1995 Age: 53 Mr Harreld leads IBMs Strategy Team and is a member of the Technology Team. Prior to joining IBM in 1995, Mr Harreld was President of Boston Chicken and an adjunct professor at Northwestern Universitys Kellogg Graduate School of Business Administration. He held senior positions at Kraft General Foods, and began his career at The Boston Consulting Group.
Jesse Greene
IBM Corporation
Board: Senior Management Job Title: Vice President and Treasurer Since: 2002 Age: 58 Mr Greene was previously with Compaq Computer Corporation (now a part of Hewlett-Packard Company), as senior vice president and chief financial officer until joining IBM in 2002. Before joining Compaq, he served as corporate senior vice president and director of business strategy and information technology at Eastman Kodak Company. Before joining Kodak, Mr Greene spent 23 years at IBM in a variety of financial positions including assistant treasurer.
Paul Horn
Board: Senior Management Job Title: Senior Vice President, Research Since: 1996 Age: 57 Dr Horn was named senior vice president of the IBM Corporation and director of research, in 1996. He has held key management positions in science, semiconductors, and storage. Prior to his present appointment, Dr Horn was vice president and lab director of the Research Divisions Almaden Research Center in California. Prior to joining IBM in 1979, he was a professor of physics in the James Franck Institute and the Physics Department and at the University of Chicago.
Jon Iwata
Board: Senior Management Job Title: Senior Vice President, Communications Since: 2002 Age: 41 Mr Iwata is a member of the IBM Worldwide Management Council and the IBM Strategy Team. He is also a member of IBMs Global Marketing Board and its Privacy Executive Council. He joined the communications function of IBM in 1984 at the companys Almaden Research Center. He was named director of corporate public relations in 1994 and was appointed a vice president the following year.
John Kelly
Board: Senior Management Job Title: Senior Vice President and Group Executive, Technology Systems and Technology Group
IBM Corporation
Since: 2000 Age: 50 Dr Kelly was general manager of IBMs Microelectronics Division prior to assuming the current role. In 1990, he was named director of IBMs Semiconductor Research and Development Center. In 1994, he was appointed vice president of business process reengineering for the Microelectronics Division. In 1995, he was named vice president of systems, technology and science for the IBM Research Division. The following year, he was named vice president of strategy, technology and operations for the Microelectronics Division. In 1997, he was appointed vice president of server development (from work stations to supercomputers) for IBM. In 1999, Dr Kelly became general manager of the Microelectronics Division. Dr Kelly is a board member and former chairman of the Semiconductor Industry Association, a Fellow of the Institute of Electrical and Electronics Engineers, and member of the Union College Board of Trustees.
Abby Kohnstamm
Board: Senior Management Job Title: Senior Vice President Since: 1998 Age: 50 Ms Kohnstamm is a member of the Strategy Team and the Executive Committee. Prior to joining IBM, she held a number of senior marketing positions at American Express, beginning in 1979. She also served as executive assistant to the president of American Express in 1986 and 1987. Her last position at American Express was senior vice president, Cardmember marketing. Abby Kohnstamm is a member of the following boards: Tiffany & Company, The Association of National Advertisers, the Board of Trustees and the Board of Overseers for Arts and Sciences at Tufts University, and the Board of Overseers at New York Universitys Stern School of Business.
Michael Lawrie
Board: Senior Management Job Title: Senior Vice President and Group Executive, IBM Global Sales and Distribution Since: 2002 Age: 50 Mr Lawrie was serving as General Manager, Europe Middle East Africa (EMEA) beginning in 1998, prior to assuming his current role. Mr Lawrie began his IBM career in 1977. Since then, he has held a number of sales, marketing, development and
IBM Corporation
financial management positions, with experience in the Asia Pacific area as well as EMEA. In 1995 he was named vice president, software, for Asia Pacific; then served as vice president, industries. In 1997, he was appointed general manager, Personal Software Products, and later headed the Network Computing Software Division.
Edward Lineen
Board: Senior Management Job Title: Senior Vice President and General Counsel Since: 2002 Age: 63 Mr Lineen joined IBM in 1970 as an attorney on its litigation staff. He subsequently held a variety of legal positions, including counsel for IBMs Sales and Distribution Division in 1983, group counsel for IBM Communications and Technology Group in 1985, and general counsel of IBMs Personal Computer Group in 1989. He was named senior vice president and general counsel in 2002, after serving as vice president and assistant general counsel for products and intellectual property. He is executive leader for IBMs People with Disabilities Executive Task Force and also supports Jawonio, an organization which advances the independence and well-being of the disabled.
Randall MacDonald
Board: Senior Management Job Title: Senior Vice President, Human Resources Since: 2000 Age: 55 Mr MacDonald joined IBM in 2000 as senior vice president, human resources. Prior to joining IBM, he was the executive vice president of human resources and administration for GTE (now Verizon Communications). Mr MacDonald was with GTE for 17 years holding positions of increasing responsibility. Before joining GTE, he held human resources positions at Ingersoll-Rand Company and Sterling Drug. He serves on the board of directors of Covance. He is a member of Cornell Universitys Center for Advanced Human Resources Study and is chair of its executive board; the Cowdrick Group; the Personnel Roundtable; the HR Policy Association and serves on its board of directors as vice chairman.
Steven Mills
Board: Senior Management Job Title: Senior Vice President and Group Executive, Software Group
IBM Corporation
Since: 2000 Age: 52 Mr Mills was appointed senior vice president and group executive, IBM Software, in 2000. He was general manager of IBM Software Group Strategy and Solutions. He joined IBM in 1974 as a sales trainee in New York City and was a marketing representative until 1980. In 1981, he joined the business planning staff of the Data Processing Division and became manager of that function a year later. In 1984, he was named administrative assistant to the IBM vice president and assistant group executive of plans and controls in the information systems group. He became director of planning in the Information Systems and Communications Group in 1985. He became director of financial planning at corporate headquarters in 1988.
Robert Moffat
Board: Senior Management Job Title: Senior Vice President, Integrated Supply Chain Since: 2002 Age: 47 Mr Moffat was senior vice president and group executive of IBMs Personal and Printing Systems Group, prior to his current appointment. Before that, he was vice president, finance and planning for the Enterprise Systems Group. Mr Moffat joined IBM in 1978, and has spent the majority of his career in the PC business. Positions held at IBM include assistant general manager, finance, planning, and business support for the IBM PC Company in Europe, controller of customer fulfillment, and vice president of finance and planning. He currently serves as IBMs partnership executive for Aetna, Bell South, Carolina Power & Light, Ingram Micro, Progress Energy and information technology product distributors CDW and Insight Direct.
Linda Sanford
Board: Senior Management Job Title: Senior Vice President, Enterprise On Demand Transformation and Information Technology Since: 2000 Age: 51 Ms Sanford was senior vice president & group executive, IBM Storage Systems Group, prior to assuming her current role. Prior to assuming that position, Ms Sanford headed Global Industries. Before that, she was general manager of IBMs S/390 Division, which develops, manufactures and markets large-enterprise systems. She has held a number of executive positions at IBM, including executive assistant to the chairman of the board and director of IBM Networking Systems. Ms Sanford serves on
IBM Corporation
the board of directors of ITT Industries, St. Johns University, and Rensselaer Polytechnic Institute. She also serves on the board of directors of the Partnership for New York City, The Business Council of New York State, and the Westchester Arts Council.
Stephen Ward
Board: Senior Management Job Title: Senior Vice President and General Manager, Personal Systems Group Since: 2003 Age: 48 Mr Ward returned to PSG in 2003. Before assuming his current position, Mr Ward also served as IBMs chief information officer and vice president, Business Transformation. Immediately prior to rejoining the Personal Systems Group, he was general manager of IBMs Global Industrial Sector. In the mid-1990s, he served as vice president, information technology, and was later named general manager, IBM ThinkPad, in the IBM Personal Computer Company. Mr Ward has held a series of product development, manufacturing management, and senior management positions at IBM. He first joined the company in Tucson, Arizona, as an engineer in the Storage Products Division. He held various management positions in manufacturing, production control, and project development for disk drive, tape, and optical storage projects and software development, and was also an assistant to the IBM chairman. Mr Ward is a member of the boards of e2open and Carpenter Technology Corporation.
William Zeitler
Board: Senior Management Job Title: Senior Vice President and Group Executive, Systems and Technology Group Since: 2000 Age: 56 Mr Zeitler was senior vice president and group executive for IBMs Server Group, prior to his current appointment. He joined IBM in 1969 as a programmer in White Plains. Mr Zeitler held several executive positions in the marketing and services division before being named vice president, marketing AS/400. In 1996, Mr Zeitler was named general manager, AS/400. During the next three years he was appointed as general manager, Server Brand Management, and general manager of Worldwide Software Sales and Marketing. In 2000 he became general manager of IBM Enterprise Servers where he remained until he assumed the role of senior vice president, and group executive IBM Server Group in 2000.
IBM Corporation
Locations & Subsidiaries
LOCATIONS & SUBSIDIARIES

IBM Canada Limited 3600 Steeles Avenue, East EastMarkham Ontario L3R 9Z7 CAN T: 905-316-5000 F: 905-316-2535 IBM Hardware Rte. 100 Somers NY 10589 USA T: 1 914 499 1900 F: 1 914 765 7382 Hitachi Global Storage Technologies 5600 Cottle Road San Jose San Jose USA T: 800-801-4618 F: 408-256-6770 IBM Software 1133 Westchester Ave. White Plains NY 10604 USA T: 1 914 499 1900 F: 1 914 765 7382 Rational Software Corporation 18880 Homestead Road Cupertino CA 95014-0721 USA T: 408-863-9900 F: 408-863-4120 International Business Machines Corporation Microelectronics 2070 Rte, 52 Hopewell Junction NY 12533 USA T: 800-426-4968 IBM Global Services New Orchard Rd. Armonk NY 10504 USA T: 1 914 499 1900 F: 1 914 765 7382 Lotus Development Corporation 1 Rogers Street Cambridge MA 02142 USA T: 617-577-8500 F: 617-693-1299 IBM United Kingdom Limited 76 Upper Ground London SE1 9PZ GBR T: +44-020-7202-3000 F: +44-020-7927-4464 Tivoli Software 11400 Burnet Road Austin TX 78758 USA T: 512-436-8000 F: 512-794-0623
IBM Corporation
Company View
COMPANY VIEW
The following statement was made by Samuel J. Palmisano, Chairman, President and Chief Executive Officer of IBM Corp. The statement was taken from the companys 2003 annual report. Last year, I told you that we were repositioning IBM for leadership, in all the ways that a business can lead. I described how IBM defines leadership, along with our plans to achieve it. And I said that I believed the results of this repositioning would roll out in meaningful ways in the years and decades to come. Twelve months later, its clear that the future we envisioned is arriving, and more rapidly than we expected. This is in part because of the hopeful signs were seeing of economic recovery, with the promise of renewed business investment in information technology. Its partly because of the rapid adoption of our on demand strategy by clients, partners and the overall IT industry. But its also something more - something specific to this company and its people, and something longer lasting than a particular economic cycle. IBM today is a very different enterprise than it was just a few years ago. Our business model has been quietly but substantially reshaped to capitalize on the most promising growth and profit opportunities in the market. Even more important for the long term, our operations and culture are being transformed as well. We are now focused with an intensity and unity I havent seen since the heyday of the mainframe. As a result, we are poised to take IBM to the next level, and to redraw and extend the boundaries of the IT industry. A very good year, for a very different company IBMs 2003 is the kind of year on which its gratifying to look back - both for our overall achievements and for the strong momentum with which we ended the year. Our revenue from continuing operations, at $89.1 billion (a company record), increased by 10 percent. Earnings from continuing operations were $7.6 billion compared to $5.3 billion in 2002, which included $1.6 billion of after-tax charges for second and fourth quarter 2002 actions. We continued to gain market share across all our core businesses. IBM today is the market leader in servers, middleware, business transformation services and strategic outsourcing. Highlights for the year included revenue growth in every server segment, a WebSphere middleware platform that grew 12 percent and gained market share, and 14 percent growth in strategic outsourcing. Our success with clients was evident in faster-thanmarket growth for five of IBMs six industry sectors. For example, in the public sector, which includes our relationships
IBM Corporation
Company View
with governments and health care providers, we grew by 15 percent; in communications by 8 percent; in industrial by 14 percent; and in financial services by 13 percent. We again generated excellent cash flows. After investing $5.1 billion in R&D, we had $12.7 billion in cash available for investment and distribution to shareholders. We invested $3.9 billion of that in net capital expenditures and $1.8 billion in acquisitions to strengthen our portfolio. And we were able to return $5.4 billion to investors-$4.3 billion through share repurchase and $1.1 billion through dividends-ending the year in a strong cash position, with $7.6 billion, including marketable securities. Overall, despite facing serious challenges, the IBM team executed with discipline. And indications for the year ahead are encouraging, including a strong demand pipeline (enlarged by more than $17 billion of services signings in the fourth quarter) and a growing number of alliances with business partners and software companies committed to leading with IBMs open, standards-based platforms. All in all, a very good performance. But is it sustainable? Can we, in fact, improve upon it and keep growing for the foreseeable future? I believe so, and let me tell you why. Recommitting to high value For the past couple of decades, if you were to look at IBMs performance in any given year or over several years, what would you see? Youd see a very large global company in which some businesses are growing rapidly, some are flat and some are declining. Add it up, and it would average out to steady profitability - but perhaps uninspiring growth. For people with comparatively short memories, this might be the only IBM theyd ever known. And it would be legitimate to ask if the company is capable of more. The answer is: We certainly are. In fact, over most of our nearly 100-year history, IBM was consistently a company that outperformed others in our markets and generated superior returns. And that was because we were singularly focused on leading, and most often creating and defining, the high-value spaces in our industry. Of course, with a company of IBMs breadth and global presence, there are always ups and downs that result from economic cycles, product and technology transitions, and sometimes issues of execution. But its also apparent that, somewhere along the line, we became more focused on defending our existing leadership position than on creating the next one. We werent particularly bold or imaginative in getting into new markets or developing new businesses, products and services, even when our strategic analyses indicated that something new was coming. And, just as important, we hesitated to reinvent or get out of businesses that no longer represented high
IBM Corporation
Company View
value for either clients or shareholders. In a word, we lost sight of IBMs mission, of what had always set us apart. Well, weve regained our focus now. IBM is an innovator - in every dimension of that word. We know that IBM and IBMers are at their best when they create value that our clients cannot get from anyone else. That means we will provide leading-edge technology, services, expertise and intellectual capital, and will integrate these capabilities for each client to provide them with competitive advantage. We commit to that. We commit to innovating to deliver client success. And that is something for which clients are willing to pay a premium. This may seem like a truism, but it actually commits us to a very focused strategy, based on a choice between the two primary sources of growth and profit in IT today: the high-volume, undifferentiated product play; and the high-value, innovation and integration play, focused on the enterprise. It is this high-value space we have chosen to lead. We believe this is the right choice for IBM and our investors. By focusing on this space, we believe we can, on a sustainable, long-term basis, generate superior returns compared to the overall IT industry, command leading share position in our selected businesses, outperform the average of the S&P 500 on return on invested capital, and produce strong cash flows. In recent years, weve taken many steps to seize this position. Before I talk about those steps, I want to spend a minute on what constitutes "high value" for clients today, and what will do so for the foreseeable future. Its embodied in what we call the on demand enterprise. And that, in turn, is all about a new kind of integration. The next wave of integration After two decades of disaggregation, the IT industry is re-integrating. This is being driven simultaneously by a major shift in client demand, and a major shift in technology. Companies have come to realize that if theyre going to respond rapidly and effectively to todays volatile marketplace, they need to do more than Web-enable discrete systems, processes or business units. They need to pull together all of the systems theyve already got and integrate them securely with their core business activities-horizontally, across not just their whole company but their entire value chain, from customers to suppliers. This is an on demand enterprise. Becoming one is dauntingly hard to pull off. It requires both the end-to-end integration of the technology- which niche product vendors simply cannot do - and the integration of technology with business processes. This in turn requires deep business knowledge and industry expertise that few traditional technology companies have,
IBM Corporation
Company View
and significant technical knowledge and research strengths that few consulting firms possess. Integration is also an emerging force in core technology and computing architectures. To cite one example, advances in semiconductor devices have been largely propelled by increasing the clock speed of the microprocessor chip; this is like revving up the RPM of a car engine. But while advances in raw speed are continuing apace, they are no longer enough to increase chip and overall system performance. For one thing, chips have become so densely packed with transistors that they produce more heat than can be cost-effectively dissipated. The solution is integration - putting multiple, often less-than-top-speed processors on the same chip, along with additional functions like fast memory and high performance input/output. This is the approach IBM engineers have taken in developing our Blue Gene supercomputer. Integration of this sophistication is beyond the reach of most chip and systems companies. It requires expertise not just in semiconductors but in advanced systems architecture, custom logic design, operating systems and software tools. This is the kind of expertise that IBM has built up over decades, and it is not easily replicated. And thats why technology leaders like Sony, Cisco, Apple and QUALCOMM have partnered with IBM for advanced technology - and why last year Microsoft licensed IBMs microprocessor technology for use in its next-generation Xbox game console. Bulking up in on demand Many IT companies will struggle with this world that is dawning - with the need to choose between open and proprietary, between serving consumers and enterprises, between redistributing other peoples intellectual capital and innovating. This is not about making pronouncements or promises. A company cannot be all things to every client, every partner and every investor. For our part, weve decided. The two parallel trajectories of integration - in client demand and in what the technology requires - play directly to IBMs historic strengths. However, even with everything IBM brought to this table, we needed more. Thats why weve made acquisitions such as PricewaterhouseCoopers Consulting (PwCC), Rational software and 19 other companies in the past two years. And its why we reset our priorities in R&D to develop more technologies and services specifically for client needs in the on demand era. On demand integration is also why weve placed a huge bet on standards, from the Internet protocols and Linux to grid computing and Web services. Without open technical interfaces and agreed-upon standards, even integration within a single
IBM Corporation
Company View
enterprise would remain a gargantuan task. And forget about integration with the other companies, business processes, applications, pervasive computing devices, laws, regulations, customs and cultures that make up the ever-more-global marketplace of the 21st century. An IT companys position on open standards - not just its rhetoric, but its actions - is a clear indicator of whether it faces forward or backward, is serving the needs of clients or protecting its market position. In addition to the opportunities Ive described, our move into on demand has opened up some very large businesses beyond the frontiers of the traditional IT industry opportunities that remain out of reach for most of our competitors. One promising example is Business Transformation Outsourcing (BTO), which was not even part of the industry lexicon 18 months ago. In BTO engagements, IBM becomes responsible for transforming - and actually providing - a clients business process in areas such as human resources, procurement, customer care, and finance and administration. Thanks to the acquisition of PwCC and the formation of IBM Business Consulting Services, we generated nearly $3 billion in BTO signings during the fourth quarter of 2003 alone. To give a rough idea of the potential here, the current size of businesses outsourced spending on sales, marketing, logistics, finance, HR and all other administrative processes is about $1 trillion a year. Of that, there is an opportunity in excess of $1oo billion in the BTO areas we are pursuing. We are committed to extend our leadership position in BTO in 2004. Remaking IBM To some people, it may seem bold to have made all these moves during the worst market ever seen in the IT industry. But I dont believe it was particularly risky, because it was driven by client demand and the realities of the technology. Whats really important for you to understand is that our commitment to leadership in the highvalue spaces and in innovation isnt a mission statement. Its a business model. And it commits us to continual reinvention of IBM itself. Over the past several years, weve taken aggressive steps to remix our business so that we are positioned for long-term leadership and new opportunities in the highvalue enterprise space, however that changes. We have, since 1997: -exited or reduced our presence in such areas as application software, hard-disk drives, networking hardware, low-end printers and retail PCs - which we estimate have declined from 31 percent to 25 percent of IT industry revenue;
IBM Corporation
Company View
-entered or increased our presence in distributed middleware, non-hardware maintenance services, Intel-based servers and mobile PCs - which have grown from 40 percent of industry revenue to 46 percent, and are expected to continue outperforming the overall IT market; -increased our revenue in business and technology consulting services, infrastructure services and infrastructure software - which generate superior long-term revenue growth, profit, cash and return on invested capital - from 48 percent to 64 percent of our total, with expectations of increasing that going forward; -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 IBMs small-and-medium business segment alone growing 14 percent to outperform the market in 2003, adding $2.4 billion in revenue; and -incubated successful new high-growth businesses such as life sciences, digital media, application management services, e-business hosting services, Linux and pervasive computing - each of which has already become a $1 billion-plus revenue stream. In the areas were targeting within life sciences and digital media alone, thirdparty analysts see more than $60 billion of market opportunity by 2006. While we do all this, were continuing relentlessly to improve execution. By becoming an on demand business ourselves, weve made big strides in product cycle time, new product introduction, sales productivity and simplification of our processes. Our inventories are at their lowest level in more than 20 years, and our continuing progress in integrating our supply chain took $7 billion of cost out of the business in 2003, surpassing what we achieved in 2002. Business value, and a companys values As I mentioned last year, weve been spending a great deal of time thinking, debating and determining the fundamentals of this company. It has been important to do so. When IBMers have been crystal clear and united about our strategies and purpose, its amazing what weve been able to create and accomplish. When weve been uncertain, conflicted or hesitant, weve squandered opportunities and even made blunders that would have sunk smaller companies. It may not surprise you, then, that last year we examined IBMs core values for the first time since the companys founding. In this time of great change, we needed to affirm IBMs reason for being, what sets the company apart and what should drive our actions as individual IBMers.
IBM Corporation
Company View
Importantly, we needed to find a way to engage everyone in the company and get them to speak up on these important issues. Given the realities of a smart, global, independent-minded, 21st-century workforce like ours, I dont believe something as vital and personal as values could be dictated from the top. So, for 72 hours last summer, we invited all 319,000 IBMers around the world to engage in an open "values jam" on our global intranet. IBMers by the tens of thousands weighed in. They were thoughtful and passionate about the company they want to be a part of. They were also brutally honest. Some of what they wrote was painful to read, because they pointed out all the bureaucratic and dysfunctional things that get in the way of serving clients, working as a team or implementing new ideas. But we were resolute in keeping the dialog free-flowing and candid. And I dont think what resulted - broad, enthusiastic, grass-roots consensus - could have been obtained in any other way. In the end, IBMers determined that our actions will be driven by these values: -Dedication to every clients success-Innovation that matters, for our company and for the world -Trust and personal responsibility in all relationships I must tell you, this process has been very meaningful to me. We are getting back in touch with what IBM has always been about - and always will be about - in a very concrete way. And I feel that Ive been handed something every CEO craves: a mandate, for exactly the right kinds of transformation, from an entire workforce. Where will this lead? It is a work in progress, and many of the implications remain to be discovered. What I can tell you is that we are rolling up our sleeves to bring IBMs values to life in our policies, procedures and daily operations. Ive already touched on a number of things relating to clients and innovation, but our values of trust and personal responsibility are being managed just as seriously - from changes in how we measure and reward performance, to how we equip and support IBMers community volunteerism. Our values underpin our relationships with investors, as well. In late February, the board of directors approved sweeping changes in executive compensation. They include innovative programs that ensure investors first receive meaningful returns - a 10 percent increase in the stock price - before IBMs top 300 executives can realize a penny of profit from their stock option grants. Putting that into perspective, IBMs market value would have to increase by $17 billion before executives saw any benefit from this years option awards. In addition, these executives will be able to acquire market- priced stock options only if they first invest their own money in IBM stock. We believe these programs are unprecedented, certainly in our industry and perhaps in business.
IBM Corporation
Company View
Clearly, leading by values is very different from some kinds of leadership demonstrated in the past by business. It is empowering, and I think thats much healthier. Rather than burden our people with excessive controls, we are trusting them to make decisions and to act based on values - values they themselves shaped. To me, its also just common sense. In todays world, where everyone is so interconnected and interdependent, it is simply essential that we work for each others success. If were going to solve the biggest, thorniest and most widespread problems in business and society, we have to innovate in ways that truly matter. And we have to do all this by taking personal responsibility for all of our relationships - with clients, colleagues, partners, investors and the public at large. This is IBMs mission as an enterprise, and a goal toward which we hope to work with many others, in our industry and beyond. Playing offense Put it all together - a more focused business model, an industry shift that plays to our strengths, bets that are paying off in the near term, and a workforce that is united and impatient to become the great company we all aspire to be - and I feel good about IBM and our prospects. Without the prod of fear or of a "burning platform," weve begun a substantial transformation of our company. For the first time in a very long time - probably since my early days with IBM 30 years ago - Im seeing a company ready to focus more on opportunities than on threats, more intent on setting the agenda than on reacting to the moves of others. Our deep-seated optimism - a fundamental belief that IBMers have always possessed in progress, science and the improvability of the human condition - is reasserting itself. IBMers are ready to reclaim a position of leadership in our industry and in the larger world of business. Which is a very exciting place to be. For me and my colleagues, its just terrific to be part of an energized IBM company that is once again ready to play some offense.
IBM Corporation
SWOT Analysis
SWOT ANALYSIS
IBM is an information technology (IT) company. It is organized into five business divisions; global services, hardware segment, software segment, global financing and enterprise investments. IBM has operations in over 160 countries worldwide including the UK, Japan, Italy, Germany, France, China and Canada. The company maintains a clear market leadership in its key market segments but the low cost proposition of offshore consulting companies can adversely affect the companys market share.
Strengths Market leadership Large number of patents Focused business model Opportunities Growth drivers in hardware, software and global services Increased financial flexibility Market opportunity in government sector Investigation by SEC Weaknesses Impact of pension and benefit costs Legal proceedings Loss of a major customer Threats Offshore consulting companies Low growth in hardware segment and professional services
Strengths
Market leadership IBM is the worlds largest IT company and the largest business and technology services provider. The company is also the worlds largest IT financier. IBM benefits from cost reductions and has the ability and power to attract specialized staff, thanks to its leading position in the market. IBM is a globally recognized brand with well diversified operations across product categories and geographical segments. In the software market, IBM is second only to Microsoft and is the leader in the server segment. The company is also the third largest vendor in the worldwide PC market. It clearly towers over all other IT companies in the markets in which it operates. Technology base IBMs technical capabilities differentiate it from its competitors. IBM annually spends approximately $5 billion for R&D, including capitalized software costs, focusing its investments in high-growth opportunities. The companys technology innovations include eBusiness, initiatives to support Linux, middleware software products, autonomic computing, advanced semiconductor technology, and other technologies supporting On Demand. As a result of innovations, IBM was once again awarded more US patents in 2003 than any other company. This marks the 11th year in a row
IBM Corporation
SWOT Analysis
that IBM achieved this distinction. The companys strong technology base enhances the product portfolio and service capabilities of IBM besides adding to the intellectual capital of the company. Focused business model Over the past decade, IBM has exited or greatly de-emphasized its involvement in consumer markets and divested itself of other non-core businesses to concentrate on the enterprise market. The enterprise market represents approximately two-thirds of the IT industrys revenue, as well as twice the growth and three times the profits compared to consumer areas of the industry. As a result, IBM has made acquisitions and invested in emerging business opportunities important to its enterprise clients. The company acquired Lotus Development and Tivoli Systems to enhance its capabilities in the software sector. Acquisition of PWC Consulting, established the company in the global management consulting and technology business. IBM sold most of its hard disk drive operations to Hitachi, thus exiting a low margin business. In December 2004, IBM sold its PC hardware division to Lenovo. The PC division was making losses and was characterized with lower margins than the rest of the IT business. The company has consistently focused its business model towards high margin business opportunities in IT, withdrawing from low margin or non-performing sectors of the business.
Weaknesses
Impact of pension and benefit costs IBM has a variety of pension and benefit programs for its employees, including defined benefit plans for its US employees such as the Personal Pension Plan (PPP) and the Supplemental Executive Retention Plan (SERP); and defined contribution plans such as the IBM Savings Plan. In addition to pensions and retirement plans, IBM maintains non-pension post-retirement benefits such as the Future Health Account (FHA), mainly for its US employees. At more than $70 billion, the benefit obligations for these plans are enormous, and small changes in investment performance or the accounting assumptions used to calculate the cost of these plans on an accrual basis can have significant effects on cash flow and reported earnings. For instance, in the fourth quarter of 2002, IBM fully funded the qualified portion of its PPP, as measured by its Accumulated Benefit Obligation (ABO), requiring a contribution of $4.0 billion. Operating cash flow in 2002 from changes in pension assets was a negative $2.5 billion. Due to the high pension and benefit costs, small fluctuations have a large impact on income. Legal proceedings
IBM Corporation
SWOT Analysis
The company faces litigation from competitors, mainly over disputes concerning intellectual property rights. Lawsuits in this area include patent and copyright infringement suits against and from Compuware and the SCO Group. IBM is also defending numerous class-action suits, mainly workers compensation and healthrelated suits, and the company is being sued in a class-action lawsuit over alleged health violations at its Fishkill manufacturing site. The company is not only incurring significant legal expenses as a result of these lawsuits but also runs the risk of potentially damaging judgments in the pending cases Loss of a major customer Financial services firm JP Morgan Chase cancelled a groundbreaking 2.8 billion outsourcing deal with IBM which was intended to run for seven years. JP Morgan Chases merger with Bank One, announced earlier in 2004, would give it greater capacity to manage its IT infrastructure, and it would bring its support staff in-house. JP Morgan Chase will wind down its existing contract with IBM in early 2005 and will bring back 4000 employees and contractors who transferred to IBM when the deal was signed in 2002. At the time the deal was signed, the seven-year outsourcing contract was described as the largest computer services deal in the financial services sector ever. The loss of a large financial services client like JP Morgan Chase would adversely affect the companys revenues and earnings. This also indicates a yet to be established, but probable, trend to move IT support services in-house.
Opportunities
Growth drivers in hardware, software and global services The market for hardware, software and IT services is estimated to reach $1 trillion by 2006, up from $867 billion in 2003. The projected annual growth rate for the combined market opportunity averages 6%. The company is well positioned to benefit from drivers in each of its business segments: in hardware, investment in new data centers and PC replacements; in software, Linux and the On Demand strategy; and in global services, outsourcing and managed services. In hardware, IBM is expected to continue to increase its market share growth in the server market through On Demand data-center projects. Server segment is currently estimated to contribute 32% to total revenues. Growing corporate demand and new products are expected to increase server revenues. High-end hardware sales would also help drive services, software and financing sales. Increased financial flexibility
IBM Corporation
SWOT Analysis
The company sold its PC business to Lenovo in December 2004. The company sold its PC business due to the low margins of this segment and the companys inability to compete with Dell and HP in the business. The sale of the PC business has also enhanced the companys focus on consulting and enterprise services and supports the companys mission to alienate itself from consumer businesses. The company can use the cash consideration for investments in its core business segments and to enhance its service capabilities. The acquisition has also led to IBM acquiring an 18.9% stake in the new entity (IBM-Lenovo) which is the third largest PC manufacturer in the world. With the divestment of the PC business IBM can now focus on its high margin businesses. Market opportunity in government sector An aging government work force will spur a huge market for software and applications that help people with disabilities use computers and other information technologies. Due to an aging baby boomer population, as well as a dearth of younger replacements, agencies will come to rely on aging workers who may suffer from fading eyesight, encroaching deafness and thought capacities diminished by strokes. IBM predicts that by 2005 the worldwide government market for accessibility tools and services will reach $109 billion. Although Section 508 of the Rehabilitation Act of 1973 is already generating some business for IBM, the company would be able to have access to a far greater potential market in equipping agencies for their aging work forces.
Threats
Offshore consulting companies There has been a surge of India based tech consulting companies that are entering US with a stronger and more consolidated base in India. Home grown, Indian companies like Wipro, Infosys and TCS are benefiting from their unique cost proposition. Infosys launched a US subsidiary in early 2004 and clocked global revenues in excess of $1 billion in 2004, a growth of 40% over 2003. Wipro and TCS have also been acquiring IBMs market share in the consulting business on account of their low cost India based operations. Expansion of their business and their ability to win over IBM consulting divisions customers, can adversely affect the companys business. Low growth in hardware segment and professional services Approximately two-thirds of IBMs revenue comes from markets forecasted to grow less than 5% over the next five years. The professional services subsegment of global services was 36% of IBMs total revenue in 2003. This business segment is forecast
IBM Corporation
SWOT Analysis
to grow at 4% over the next five years. The hardware market, which comprised 29% of IBMs 2003 revenue, is forecasted to grow at 3.6% over the next five years. The low growth in the companys business segments can adversely affect the companys future market. Investigation by SEC IBM continues to be the subject of an SEC investigation, disclosed in February 2003. The investigation relates to revenue recognition in 2000 and 2001. The SEC issued a Wells Notice to the company on a related investigation, alleging it aided Dollar General in misstating its 2000 results; consequently, the company may face civil action for violating securities laws. A finding of wrongdoing could cause re-statements impacting the market price of its stock.
IBM Corporation
Top Competitors
TOP COMPETITORS
Apple Computer, Inc. BMC Software, Inc. Cisco Systems, Inc. Computer Associates International, Inc. Dell Inc. EDS Corporation EMC Corporation Fujitsu Limited Gateway, Inc. Hewlett-Packard Company Intel Corporation Microsoft Corporation Novell Oracle Corporation Seagate Technology STMicroelectronics N.V. Sun Microsystems, Inc. Texas Instruments Incorporated Toshiba Corporation Unisys Corporation Wipro Corporation Xerox Corporation Wind River Systems, Inc. Borland Software Corporation Open Text Corporation Accenture Celestica Inc. Acer Inc.

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IBM Corporation

Reference Code: 2CCC78C4-8E77-4413-81BC-AE12C4655D2C Publication Date: Jan 2005

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

MAJOR PRODUCTS & SERVICES

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IBM Corporation Datamonitor (Published Jan 2005)

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IBM Corporation Datamonitor (Published Jan 2005)

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Senior Vice President and Chief Financial Officer (Since: 2004)

Senior Vice President, Human Resources (Since: 2000)

Vice President Assistant General Counsel and Secretary (Since: 1998)

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KEY EMPLOYEE BIOGRAPHIES

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Mr Trotman is retired chairman of Imperial Chemical Industries.

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LOCATIONS & SUBSIDIARIES

IBM Corporation Datamonitor (Published Jan 2005)

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IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

IBM Corporation Datamonitor (Published Jan 2005)

This profile is a licensed product and is not to be photocopied

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