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Technology Stocks : IBM -- Ignore unavailable to you. Want to Upgrade?

To: Michael Bakunin who wrote (7530)	3/15/2002 5:33:29 PM
From: Scott Bergquist	Respond to of 8218

I think when Information Services shops I have inhabited look to move forward, it is at the expense of Mainframe Hardware and connected manpower, in favor of servers and pc solutions, because up-and-coming managers are more comfortable with lower-level computing. Services are needed to do the migration. Often these jobs don't pan out, and the mainframe-legacy systems remain, the "migration" is basically junked, but then the process starts over again, a year or so later (new budget in hand). IBM benefits from the "rear-guard" activity on the Mainframe side, as well as server expertise for the "new solutions". They provide end to end expertise. But this "happy" situation will be swept away by technology in the next 3-5 years. Non-volatile, non-magnetic storage will be the catalyst. Server performance will catapult into the mainframe performance realm. Speech Recognition Computing will be as profound a change as the rise of the Internet. The question will be though, who will have the size to overtake IBM in their current strongholds? Only Microsoft, with Windows and Word, Excel, has successfully battled IBM head-to-head in computing endeavors, and won the battle.

To: Michael Bakunin who wrote (7530)	3/17/2002 3:56:38 PM
From: ild	Respond to of 8218

<<<All the growth has been services>>> Fred Hickey has long been very suspicious about revenue recognition in IBM's multi year service contracts. And BTW that was him that fed the information to Gretchen Morgenson of The New York Times. He admitted this in his newsletter.

To: Michael Bakunin who wrote (7530)	3/19/2002 8:09:16 PM
From: Robert Scott Diver	Read Replies (2) \| Respond to of 8218

IBM has been gaining market share in some key hardware areas including servers and disk storage systems. Competition in the mainframe arena has largely disappeared, reducing pressure on margins. Once the hardware categories stop shrinking, the share gains should convert into real revenue and profit gains. IBM has also been gaining share and revenue (as your figures show) in software (eg. DB2, WebSphere). The microelectronics business should also start to grow as the economy picks up. IBM has some serious competitive advantages as a foundry. An example would be the 80% market share in SiGe. I expect services to continue to grow, but at a slower pace relative to the other areas of IBM's business. Not only has services become a huge business, but the other areas should come alive with the end of the "tech recession".