NEW YORK (AP) -- IBM chief Louis V. Gerstner said the current fright in the technology industry isn't as bad as it appears to be, and his company is set to prosper from a real boom in e-commerce.
"Despite the hand wringing and the 'sky is falling' mentality, the fact is that in the U.S. in the first quarter of 2001, business investment in hardware and software grew a very healthy 11.3 percent. That's no blackout, and it's certainly no washout," Gerstner asserted in delivering his eighth annual state-of-the-industry report to investors Thursday.
"We should not allow this bubble bursting to mask the long-term perspective," Gerstner said of the sudden reality check that has devastated the Internet sector and the overall technology market. "Despite the dot-com collapse, institutions of all sizes and types will make massive investments in networked technologies."
Gerstner, whose public appearances are rare, opened his speech by making fun of the mounting media speculation that he might retire next year when his contract expires and he'll be 60.
"I'm impressed that you would all be here to see the great has-been," Gerstner said with his characteristic swagger. Asked whether investors should expect to see him at next year's meeting, he quipped, "We don't plan that far in advance at IBM."
Gerstner's optimistic tenor reinforced the confident tone of the most recent quarterly report from IBM, one of the few big technology names to avoid sharp job cuts and repeated profit warnings amid the current economic downturn.
A month ago, the world's biggest computer company reported a 15 percent increase in first-quarter earnings to $1.75 billion while revenues rose 9 percent to $21.04 billion.
Gerstner stressed that the operating advantages to be derived from Internet- and network-based technologies will, in fact, produce an explosion of electronic commerce despite the pessimism now hanging over the Internet sector.
And, he bragged, IBM will be sitting in the sweet spot of that revolution because of the company's leadership in computer services and support, as well as its innovations in computer chip technology.
"The companies that have focused on serious applications -- not just throwing up a pretty Web site -- are enjoying enormous benefits," Gerstner said.
"I won't bore you with all that we've done turning IBM into an e-business, but ... [our] customers bought $23 billion in IBM products over the Net last year."
Likewise, he added, "We bought $43 billion in goods and services electronically last year. We e-procured 94 percent of everything we bought -- and avoided $375 million in costs." |
