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IBM's Future Growth: Details Shrouded
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D. Henschen
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D. Henschen,
User Rank: Author
7/19/2013 | 4:54:43 PM
re: IBM's Future Growth: Details Shrouded
An IBM PR guy emailed me to say "I have answers to your questions," but he just regurgitated growth claims without context -- "Social Workforce Solutions up 23%... cloud up 70% in the first half." From 23%/70% from what to what? Once again there was no actual revenue figure as a reference point. He also threw in a link to a promo about "cloud suites for the C-Suite (http://ibm.co/16A9o02) -- strike me as a real example of marketing engineering, not solution engineering.

I also got an email from a former (recently laid-off) IBMer who asked the following important question: "Why has the world's leading patent portfolio not translated into top-line revenue growth?"
TerryB
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TerryB,
User Rank: Ninja
7/19/2013 | 5:29:54 PM
re: IBM's Future Growth: Details Shrouded
Doug, Power servers are not like the x86 machines that get put on 3 or 4 year replacement cycles. Those things are so good and perform so well you are tempted to run them forever, particularly when covered by IBM support contract. IBM support is by far the best I've ever seen on any IT product. And I've been using IBM servers since the 1980's.
We bought our current POWER6, the smallest model they sell, in 2009 and I'm not planning on replacing until at least 2015. And that won't be because I need more horsepower or storage, just to reduce probability of any unplanned downtime at all.
But we will buying another POWER system, and another, and another...
I also don't understand why a company as mature and large as IBM is only defined as successful by their revenue growth? 100 billion a year isn't enough already? This company should never be compared to Google, Apple, Facebook, even Microsoft. They are in a league of their own in the IT world.
D. Henschen
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D. Henschen,
User Rank: Author
7/19/2013 | 6:56:02 PM
re: IBM's Future Growth: Details Shrouded
Every company that's sold as a publically traded stock (and even those that aren't) are judged by their growth. Complacency led to the whole episode of Lou Gerstner having to come in and rescue IBM. That will happen again unless IBM can invent its future before the future arrives. If you don't have top-line growth, you're riding on past glory, and that only goes so far.
The Silver Fox
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The Silver Fox,
User Rank: Apprentice
7/23/2013 | 12:33:58 PM
re: IBM's Future Growth: Details Shrouded
"Every company that's sold as a publically traded stock (and even those that aren't) are judged by their growth" True, and if you read IBM's 2015 business plan, you'll see that one of the primary "growth" targets is operating EPS growth. And EPS growth can be significantly boosted by stock repurchases, which are central to IBM's 2015 plan. In other words, EPS growth can come partly from significant stock repurchases. Is this "cheating"? Wall Street doesn't care as long as the EPS growth is delivered.
PhilHD
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PhilHD,
User Rank: Apprentice
8/1/2013 | 10:11:12 AM
re: IBM's Future Growth: Details Shrouded
Id start questioning why IBM's Power revenue continues to decline, 5 QUARTERS in a ROW. Does this decrease coincide with the latest releases of SPARC from Oracle? Is SPARC showing signs of growth recently? I believe so.

1Q2012 -Power Systems flat compared to 2011
2Q2012 -Power Systems down 7% compared to 2011
3Q2012 -Power Systems down 2% compared to 2011
4Q2012 -Power Systems down 19% compared to 2011
1Q2013 -Power Systems down 32% compared to 2012
2Q2013 -Power Systems down 25% compared to 2012


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