Answer: "Well again, if you think back to the question that Toni asked, I wasn’t really making a comment about overall corporate spending. Again, as we look at the economic environment currently and moving into ‘010, it looks like, as I had said earlier, it’s really stabilized. So within an environment of general stability, that’s a big improvement as we go into ‘010 versus what we saw as we went into ’08 and ’09. Now that said, as we look at the opportunity we have, we have a lot of unique opportunities for IBM as we go into 2010."
Now, clearly it's not Mark Loughridge's job to be the spokesperson for the global IT industry; it's his job as CFO of IBM to articulate IBM's performance and outlook. So anyone looking for evidence that a rising tide is coming to lift all boats will need to keep on looking, because that is not what Loughridge was saying; in fact, he was saying something quite different.
The important message that can be inferred by what Loughridge did not say is that there is no rising tide, and that the only boats that are being lifted are those that are executing extraordinarily well and that are offering customer value well in excess of their competitive sets.
And at least as far as IBM is concerned, Loughridge hinted that the company is only getting warmed up: application outsourcing up 42% in the quarter; total outsourcing backlog of $134 billion for the quarter, up $5 billion from last quarter; $8 billion in profit from Services; another $8 billion in profit from software; and increased share in its carefully targeted hardware businesses (servers and storage) for the sixth consecutive quarter.
Indeed, Loughridge spoke animatedly about the extensive upgrades to its entire hardware line, saying, "We think that we are going to turn [hardware] around in the fourth quarter generating double-digit profit growth with new products going into 2010, with a new Z series, Power 7 now across the P series line by the end of the year to continue this momentum."
And so since at least from IBM's perspective the tide is not rising, think carefully, folks, about which boats you climb aboard.
Bob Evans is senior VP and director of
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