The 60s and 70s saw actions designed to unbundle so that there were
multiple business areas of hardware, services, and software. As you
know, at one time the IBM hardware solution could only be rented,
came with software and maintenance. From the 1956 Consent Decree
through a number of subsequent actions, pieces of the pie were split
off. At one time IBM only offered the pie, there were no
pieces. Now if a customer wants a pie IBM sells pies. If they want
to put together a pie with pieces IBM offers that too. And if they
want to put together a half pie from IBM, a quarter pie from Cisco,
some slices from Oracle and MSFT, etc. IBM will also do business in
that environment. So a "bundled" bottom line bid is just an option
not a requirement. As far as my impression of the earnings, I am
disappointed with 6% revenue growth and in retrospect IBM should not
have hinted at an upside surprise. 2.47 was not an upside surprise.
It appears that December hardware discounting was heavier than
expected. 60% more MIPs should have seen an increase in hardware
revenue for S/390 products. There is an explanation for this. 4Q 97
saw the first volume shipments of G4 whereas 4Q 98 was the second
quarter of volume shipments for G5 so a lot of the very profitable
demand was picked off in the 3rd quarter 98. Anyway, the rest of the
report seems to be inline with my expectations. Next week will be
better. Board meets, vote to split, Gerstner speaks to the employees
on a world-wide hookup on the 28th. He is not going to allow this
negativism to last long since he needs every able body pulling 1000%
percent in the first quarter. Expect him to be at his best. |
