Worst of times is the best of times for IBM?

In recent conversations with IBMers, one theme nearly always came up: this is a big company with deeper pockets than any other company in the tech business. The blunt message: recession or no recession, it's only a matter of time before less well endowed rivals buckle.

Marketing spin, to be sure--but also a reflection of the constellation of forces in an increasingly weakened tech industry. And now, CEO Sam Palmisano has made it official.

In a letter to shareholders released in conjunction with IBM's annual report, Palmisano says that the company is "positioned to lead in the era that lies on the other side of the present crisis."

"We will not simply ride out the storm," he said. "Rather we will take a long-term view, and go on offense."

What this means in practice is that the company will attempt to leverage its diversification into areas such as cloud computing and services as a competitive weapon against rivals with weaker benches. IBM also is betting that its big presence overseas will help it better ride out a recession that has led to a slump in IT demand in the United States. About 65 percent of its revenues came from outside the U.S. last year.

Perhaps the most interesting part of Palmisano's letter is his declaration that IBM isn't planning to retrench until the global economy recovers:

Many companies are reacting to the current global downturn by drastically curtailing spending and investment, even in areas that are important to their future. We are taking a different approach. Of course, we must continue to improve our competitiveness. But while we maintain discipline and prudence in the near term, we also maintain the discipline to plan for the future. We're not looking back, we're looking ahead. We're continuing to invest in R&D, in strategic acquisitions, in growth initiatives--and most importantly, during these difficult times, in our people.

In other words, we will not simply ride out the storm. Rather, we will take a long-term view, and go on offense.

Separately, IBM disclosed in a filing that it awarded Palmisano $21 million in salary, bonus, perks, and stock-based awards last year.

[bwvla]

Say what you will about IBM, but in their current re-incarnation they are all about finding and leveraging opportunity. Sometimes its sleazy (crazy expatriate for less layoffs last month), other times bold.

[CTO_Dude]

I learned via a friend at IBM that they had laid off workers but never announced like other companies have. It seems like they are talking out of both sides of their mouths. Mark this post... IBM will have a dismal quarter at some point where all the loses they are hiding come to the surface.

[Commander_Spock]

While this article reads in part; re:[... "We will not simply ride out the storm," he said. "Rather we will take a long-term view, and go on offense."

Well; from the look of things it will appear that there are others in other parts of the world who are "Boldly Going Where None Has Gone Before" with an new "OS Kernel" where IBM has dared to go!

See the attached: re: "New kernel"

Also,

Re: "[... Looks like a new kernel is coming.

It would be great if those who are interested in this shared their opinion regarding what they want to see added and/or improved in a new kernel.

I believe, this would help the developers..."

http://www.os2world.com/component/option,com_smf/Itemid,63/topic,1316.0/

[angeloj.rossi]

16K in lay offs this quarter in the US. Well positioned for the future. Still sleazy as hell.

[GajaKannan]

"What this means in practice is that the company will attempt to leverage its diversification into areas such as cloud computing and services as a competitive weapon against rivals with weaker benches. IBM also is betting that its big presence overseas will help it better ride out a recession that has led to a slump in IT demand in the United States. "

IBM among anyone has less presence in Cloud computing compared to Google, Amazon and Microsoft...
Secondly, this recession although started in US has spread to become a global recession.

IBM may be better diversified than others, but not immune and will be well impacted by the current market conditions. A quick stock comparsion of IBM with MS, Oracle, Goog will show that they follow the same trend as others. What IBM may be touting is they may gain ground against bleeding Sun.

Sorry to say, this report is not "noteworthy"

[Commander_Spock]

You have said inter alia; re: "IBM may be better diversified than others, but not immune and will be well impacted by the current market conditions. A quick stock comparsion of IBM with MS, Oracle, Goog will show that they follow the same trend as others. What IBM may be touting is they may gain ground against bleeding Sun.

Sorry to say, this report is not "noteworthy"

Needless to say, IBM all but gave up on the OS/2 Warp Operating System when the banks (where apparently most of the bailout money is going) a few years ago chose the Windows Operating System over the Linux Operating System which IBM was suggesting in place of the once favorite OS/2 Operating System which the banks loved at that time. See the below attached:

Re: "IBM, Bankers at Odds Over OS/2 Migration Path
Vendor advises OS/2 users to switch to Linux, but ATM makers are leading push to Windows"

http://www.computerworld.com/softwaretopics/os/story/0,10801,83884,00.html

Therefore, this time around it will be quite interesting to see how the "battles" shape up in the near, medium and long terms in the "cloud" between IBM and rivals such as the Microsoft Corporation, Sun Microsystems, Google, Oracle.....given the current world's financial and economic conditions.

[rshimizu12]

I agree IBM is very well positioned for this recession. One thing to remember is that IBM services is moving into a lot of non-IT related areas of computing with it's Smart technology. IBM is well under way with their Smart electrical grid. IBM already has 15 smart grid projects underway. They are also the general contractor in one asian country's smart electrical grid. IBM is also getting ready for Smart highways and Smart Water systems.

These are areas where it's competitors are not or far behind.

[dascha1]

"We're not looking back, we're looking ahead. "

That's fine, but what has IBM really learned about their manufacturing process from the past, in terms of employee working environments and the smells that no longer invade those spaces.

[QASIMARA]

The men beat their spears on shields before battle, and the primal guttural sounds of their war cry roared into the valley.

[Commander_Spock]

Are you not forgetting the "calm" that passes before every "storm"; and, in a "tsuname-like" scenario the "guttural sounds of their war cry roared into the valley" may be heard no more.

Now, "All Your Base (Gorges instead of Valleys) Are Belong To Us"

http://www.youtube.com/watch?v=L9oh3gqOEKU

Live Long And Prosper!

[abcd9009]

One thing to keep in mind is unlike Accenture, EDS, or any other Consulting/Services Company, IBM is not just into Services but also has it's hands on hardware (including manufacturing CPUs for all 3 current gen game consoles) + Software (in pretty much every categories from OS to DB to BI to Office Suite...) and now it's filling up the gap in Web Services through Cloud computing.