Sunday, October 09, 2005

Accenture earnings may bode well for IBM

SAN FRANCISCO: Accenture Ltd.'s better-than-expected profit report may be a good sign for the company's bigger competitor, IBM . Accenture, the world's second-largest consulting company after IBM, on Thursday said rebounding demand for consulting services by financial-services businesses helped drive a 25 percent surge in quarterly net income and a 13 percent increase in revenue.

International Business Machines Corp. reports third-quarter results on Oct. 17 and Accenture's comments about increasing demand for services, rather than a fight for existing business, cheered some analysts.

"They were able to achieve their results because prices were stable," said Bob Djurdjevic of Phoenix-based market research company Annex Research. "That means that competitors like IBM aren't giving away the store anymore."

Shares of IBM closed 1 percent higher at $80.50 on the New York Stock Exchange after advancing as high as $81.11. Accenture's stock ended 5.6 percent higher at $26.67. Accenture on Thursday announced its first dividend since going public in 2001.

Demand for technology services and consulting may be recovering after slumping from 2000 to 2004, when businesses reduced spending as stock markets stumbled and profits fell, analysts said. "We're finding leading companies making major investments to improve their competitive edge," Accenture Chief Executive Bill Green said on Thursday. "A lot of what we heard from about an improving environment from Accenture will apply to IBM," said Cindy Shaw, an analyst at Moors & Cabot Capital Markets in San Francisco who covers Accenture but not IBM.

"But Accenture is also benefiting more than many of its competitors from having differentiated capabilities" that help companies improve business results, she said. Shaw noted that services account for only about 55 percent of IBM's revenue and operating profit, and added that the company is in the process of restructuring its services organization.

Analysts on average expect IBM to report a 3.7 percent decline in third-quarter earnings per share before exceptional costs, to $1.13 from $1.17, according to Reuters Estimates. Of 23 analysts who track IBM, nine recommend buying the stock, eight have "outperform" ratings and five have "holds." One advises selling.

IBM Chief Financial Officer Mark Loughridge in July said he was comfortable with the range of analysts' profit forecasts for the second half of 2005. The company beat expectations when it reported second-quarter earnings in July amid a rebound in its services and software businesses.

IBM's Global Services unit, which competes with Accenture in consulting, showed solid growth in revenue and a surge in signings of new contracts in the second quarter. IBM's stock trades at 14.6 times estimated fiscal 2006 earnings per share, compared with Accenture's 15.9.

GEN signs MoU with IBMHubli | October 08, 2005 7:35:49 PM IST

Global Education Network (GEN), a Hubli based leading software company in Education sector, has signed a Memorandum of Understanding (MoU) as an Independent Software Vendor Advantage (ISVA) of IBM.

GEN President Mallikarjun Huralikoppi, talking to newsmen here today, said that the company has signed a MoU with Karnataka Lingayat Education (KLE) Society for providing centralised Campus Management Solution (CMS) with 18 different modules mainly for the Education Sector. The scope of this application meant for providing online access to management, principal, faculty, students and parents across the institution and on the internet and thereby helping to manage resources effectively and provide information both statutory and college related at the fingertips.

He said that another software Examination Management System (EMS) was to computerise examination system for generating application forms, admission ticket, coding, decoding, tabulation, announcing results, printing of marks cards with photograph, ledgers certificates and the statistical reports for all the courses of the University as required by the statutory bodies.
Replying to a question, he said that the company planned to provide job opportunities to over 500 people by 2008. The company also planned to have tie up with Open Universities for providing e-education.

Service Oriented Architecture: IBM’s Vision for the Future

By Holly Neal, Special To LTW
Editor’s note: You have likely heard about SOA, or service oriented architecture, but not the underlying details about the concept. Local Tech Wire asked InCentric Solutions, an IBM business partner, to fill in LTW readers. Holly Neal is marketing director at InCentric Solutions.

RESEARCH TRIANGLE PARK - IBM’s Service Oriented Architecture (SOA) provides a flexible, robust infrastructure to model, assemble, deploy and manage business processes. It's cost-effective, modular and scalable which means you can implement an end-to-end SOA solutions customized to your requirements, when you want and how you want. SOA allows business processes to be decomposed into discrete services. These services can then be delivered however best for the customer.

Services, once assembled and deployed as running processes are monitored and assessed by business process management practices. Business Process Management then provides the feedback required to flexibly adapt processes to meet changing business needs. Business Process Management supported by SOA is critical to IBM Business partners because it:

Maximizes return on assets by enabling the reuse of a partner’s and other developed business processes

Provides partners with new engagement opportunities to rapidly build on and optimize customer existing business processes

It enables partners to expand the penetration in customer's IT environments even when customers are undergoing mergers or acquiring other companies.

Improves customer satisfaction with partner’s solution by improving the predictability for solution's impact on customers business processesSOA brings together Business Processes and the technologies required to implement them. This is important to IBM Business Partners because increasingly customers are making technology decisions exclusively on business requirements. SOA offers the traditional technology providers the ability to demonstrate their solution’s value directly to line of business management.

An open integrated platform based on open standards is a critical enabler for SOA because without open standards assembling discrete services from different sources into end-to-end processes would be impossible. Without standards or best practices as a guide, many companies have developed their business processes bit-by-bit, piece-by-piece, over time.

Or perhaps they’ve focused on solving specific, ad hoc issues. The outcome has been an infrastructure that is inflexible and very difficult, expensive and time-consuming to change. Success with service oriented architecture (SOA) starts with a flexible, robust infrastructure that you can use in conjunction with your existing IT assets to create additional business value and flexibility.

The IBM SOA FoundationThe IBM SOA Foundation is an integrated, open-standard-based set of software, best practices and patterns that is designed to provide what you need to get started with your SOA. IBM SOA Foundation is designed to help you extend the value of the applications and business processes that are running your business today. You can select components on a build-as-you-go basis, as you need to address new requirements. And you can readily enhance IBM SOA Foundation with capabilities from the broader IBM software portfolio.

The components that comprise IBM SOA Foundation have been carefully selected to support each stage of the SOA Lifecycle. The SOA Lifecycle includes four stages: model, assemble, deploy and manage. Underpinning all of these lifecycle stages are governance and processes that provide guidance and oversight for a SOA project.

IBM SOA Foundation is more than just software. It offers SOA best practices through SOA-related guides, white papers and other resources based on extensive customer experience. IBM also provides IBM SOA Industry Accelerators that extend the value of IBM SOA Foundation with industry-specific assets. These accelerators provide best practices in the form of practical how-to guides to apply proven practices to solution implementation. ________________________________________________________________________________________To learn more about IBM SOA Foundation, contact Troy Webb of Incentric Solutions at 919.427.0900, or troy.webb@incentric.com or www.ibm.com\soa

IBM pushes Workplace forward with aid of development tool

Big Blue is shipping Designer 2.5 to bridge the Notes–Workplace gap

IBM has released Workplace Designer 2.5, a development tool it hopes will help users bridge the gap between its legacy Lotus Notes/Domino architecture and the Workplace platform IBM has declared is the future when it comes to collaboration applications.

Workplace Designer is an Eclipse-based tool designed to allow programmers to build applications for IBM’s Workplace platform, which is based on a foundation of J2EE (Java 2 Enterprise Edition) and web services standards. That’s a big architectural departure for developers accustomed to Domino.

To help ease the transition, IBM is keeping Workplace Designer’s look and feel as close as possible to that of Domino Designer. Workplace Designer can also import forms from existing Lotus applications for use in new Workplace applications.

The software, priced at US$649 (NZ$938) per developer, is available for download from IBM’s Passport Advantage website.Early user Rob Novak is enthusiastic about the software’s ability to link Lotus developers with IBM’s broader software stack.

“This is making available something that has previously been a big black hole to us, WebSphere Server,” he says.Novak is the president of Snapps, a consultancy with deep IBM ties and a long history with Lotus. Its staffers average more than a decade of Lotus development experience each.

Novak began working with early versions of Workplace Designer right after IBM’s January Lotusphere conference. “At this point we’re in the exploratory stage of seeing what we can do,” he says. “We’re looking at the features that allow us to migrate the design of Domino forms, for instance, so we can have a Domino developer mock up a form quickly and then move it over to Workplace.”Novak sees a “heavy emphasis on coexistence” between Workplace and Domino. IBM’s Workplace push has spooked the Lotus faithful.

Consequently, IBM has emphasised that customers can opt for a very gradual transition, assisted by tools aimed at making such a move as smooth as possible.None of Snapps’ clients with legacy Lotus systems have rushed to embrace Workplace, though some are cautiously exploring it for new development, Novak says. So far, Snapps’ Workplace projects have been investigative rather than for production use. “The customers we’ve been working with who have a Domino infrastructure are not going away from it, they’re adding on to it,” Novak says. “If I had to guess, I’d say we’ll be doing Domino development for another ten years.”

IBM drops SCO countersuit claims

By Andrew Orlowski in San Francisco

IBM has dropped its a number of patent infringement counterclaims against The SCO Group.
SCO had filed a large number of requests for additional depositions regarding the countersuit, and IBM says it's dropping several claims - but not the suit - to speed up its defense of SCO vs IBM.

"While IBM continues to believe that SCO infringed IBM's valid patents, IBM agreed to withdraw its patent counterclaims to simplify and focus the issues in this case and to expedite their resolution. The little discovery that SCO has produced regarding IBM's patent claims makes clear that there is insufficient economic reason to pursue these claims. Since SCO's sales have been, and are, limited, a finding of infringement would yield only the most modest royalty or award of damages and would not justify the expense of continuing prosecution of these claims," said IBM.

In other words, SCO's dwindling financial resources mean that the reward from winning the countersuit weren't worth the trouble. An impatient Judge Wells also denied SCO's motion to compel IBM to release hundreds of thousands of documents relating to the development history of Linux.

"It's a breathtakingly bold chess move," says Groklaw's Pamela Jones of IBM's decision to drop its lawsuit.

As she explains further -
"There is no money from a plaintiff that has burned through its millions, handing it all over to lawyers chasing a now-popped bubble of a scheme. Oops. Did I say scheme? That doesn't seem like the right word. Did I mean to write scam? No, I probably meant to write dream. That's it. A popped bubble of a dream. Ah! those fading daydreams of second homes -- nay, castles! -- and undeserved millions, just from cynically hitching a piggyback ride on the back of the rising star, Linux. I guess we will get to find out from SCO the answer to poet Langston Hughes' question in his poem, 'Dream Deferred' …"

Which she then quotes, but which we'll spare you. ®

IBM to unwrap first dual-core Xeon 'Paxville' servers

IDG News Service, Boston Bureau
IBM Corp. is due to unveil its first two 64-bit servers based on Intel Corp.'s dual-core Xeon chip, formerly code-named Paxville DP, when the chip giant launches the processor Monday. Under a promotional deal to last through year-end, Big Blue will sell one of the servers for the same price as the single-core model it replaces, according to an IBM executive. The move is designed to provide an additional incentive for users to adopt dual-core computing sooner rather than later.

Dual-core computing is the placing together of two CPUs (central processing units) on a single piece of silicon as a way to both cut costs and lower thermal emissions. Since processor-intensive tasks can be handled separately, dual-core chips can also help improve the performance of multithreaded applications.

"Dual-core is the future," Alex Yost, director of xSeries and IntelliStation products with IBM's systems and technology group, said in a phone interview Thursday. "It offers the best performance per dollar and per watt. We believe customers will switch over where dual-core [technology] is available." By the end of next year, he estimates that two-way and four-way dual-core technologies will power almost 100 percent of the servers in the market.

The dual-core two-way xSeries 346 is a 2U rack server and will have a starting price of US$2,969, the same price as the previous single-core xSeries 346, according to Yost. U is the standard unit for measuring the space between shelves on a server rack where 1U equals 1.75 inches.

Shipping in mid-October, the xSeries 346 will be powered by a dual-core Xeon chip with a clock speed of 2.8GHz and will come with 2G bytes of DDR (double data rate) II memory, Yost said. The server will also feature eight memory sockets supporting a maximum of 16G bytes of memory and four PCI (Peripheral Component Interconnect) slots, Yost said. The PCI slots are in addition to the server's RAID (redundant arrays of independent disks) and systems management cards, he added.

The dual-core xSeries 336 is a 1U rack server and will also be powered by a dual-core Xeon chip running at 2.8GHz, according to Yost. IBM expects to ship the server in November and plans to release more specifications and pricing details at that time.

Both servers are built on a design IBM debuted in August 2004, Yost said, its eXtended Design Architecture, which was created in part to handle the demands of dual-core computing. The architecture includes a Big Blue technology, Calibrated Vectored Cooling, which optimizes the flow of cooled air through the server.

When it comes to dual-core computing, Intel has significantly lagged behind rival Advanced Micro Devices Inc. (AMD) in bringing chips to market. Although there won't be any announcements from server vendors to support it, Intel will also talk Monday about its multicore Xeon processor, code-named Paxville MP, according to Yost.

Back in August, Intel announced that development of both Paxville DP and MP was ahead of schedule, enabling the company to deliver the chip this year in advance of the original delivery date of 2006.

"There are some areas where [AMD's] Opteron will continue to outperform Xeon," Yost said, including Intel's front-side bus design, which analysts suggest can be a drag on performance compared with the AMD chip. "Paxville DP is great progress for Intel," he added.

Hewlett-Packard Co. is also expected to announce dual-core Xeon powered ProLiant servers when the Intel chip debuts Monday. Dell Inc. has already announced that it intends to ship a mix of servers, blades and workstations based on dual-core Xeon processors in the first half of this month.

IBM Invites Corporations to Address Critical Teacher Shortage

Proposes 10,000 New Teachers Come From Private Sector

WASHINGTON, DC -- (MARKET WIRE) -- 10/07/2005 -- IBM today invited corporate America to address the critical shortage of teachers facing the nation's schools at the Business Education Network Summit. The company urged United States corporations to join in transitioning employees to second careers as teachers in U.S. kindergarten through 12th grade classrooms.

According to a 2005 National Center for Education Information Study, 40 percent of public school teachers are planning to exit the profession within the next five years. One-third (34 percent) of high school teachers expect to be retired by then.

IBM recently announced a new Transition to Teaching program that will allow experienced employees to become fully accredited teachers in their local communities upon electing to leave the company. The IBM program will begin as a pilot in January with as many as 100 U.S. employees in various geographic areas participating across the country. IBM is committed to sharing its program, methodologies, materials, and experience with any company willing to join this effort.

"One of the key elements for strong communities is a solid school system," said Stephen Jordan, executive director of the U.S. Chamber of Commerce Center for Corporate Citizenship. "IBM's innovative transition program for getting professional business people into the classroom will help our schools, our communities and our nation. It's a model that we plan to share with many other interested businesses, and we look forward to seeing it succeed."

The IBM program will focus on math and science teachers, areas in which many IBM employees have strong backgrounds. But the need for teachers is across all disciplines. Transferring skills from the corporate environment to the classroom is an innovative way to address the need for teachers and provide students with the real-world perspective.

According to Ann Cramer, IBM director of Corporate Community Relations, "If 100 companies will join us in training 100 employees as teachers, we can help put 10,000 educators in the classroom."

Cramer spoke at the U.S. Chamber of Commerce Center for Corporate Citizenship Business Education Network Summit in Washington, D.C. which brought together corporate leaders, educators and not-for-profit leaders.

"There are many great teachers in our schools today that are doing a great job. Their work is challenging, and we commend their efforts," said Cramer. "This is just one small step in addressing the teacher shortage. This is an innovative way to help turn the tide."
About the Business Education Network

The Business Education Network (BEN) of the U.S. Chamber of Commerce Center for Corporate Citizenship (CCC) is a coalition of businesses, educators, and education service providers dedicated to advancing the global competitiveness of the U.S. education system and the success of future generations of Americans. BEN focuses on promoting business education partnerships to accomplish local, regional, and national objectives.

About IBM
IBM is the world's largest information technology company, with 80 years of leadership in helping businesses innovate. Over the last 10 years, IBM has been one of the largest corporate contributors of cash, equipment and, most important, people to nonprofit organizations and educational institutions across the United States and around the world. For more information on IBM's philanthropic endeavors, visit http://www.ibm.com/ibm/responsibility.

Contact: Catherine Collins / Mobile: 917-374-0541 ckc@us.ibm.com

China wants its brands in U.S.Companies don't want to be known just for low-cost products

By David Greising
Special to The Morning CallBEIJING
It's a long way from here to a castle in France, but that was an early stop — a pilgrimage of sorts — for a group of senior Chinese executives intent on taking the next great leap in capitalism.

At Chateau Touffou, the Chinese huddled with representatives from the ad agency Ogilvy & Mather to plot a global branding strategy. Ever since advertising visionary David Ogilvy bought it, the agency has used the castle to woo big clients like Motorola and American Express. This time the client was Brand China.

If Chinese companies ever become household names — if Lenovo computers and Haier refrigerators and Chery automobiles ever rival Dell and GE and GM — Brand China can trace its roots to the meetings last October in France where Ogilvy taught the Chinese the secrets of Brand Marketing 101.

''The Chinese going outside is still a very new thing. It's very experimental at this stage,'' said Joseph Wang, chairman of Ogilvy's southern China business, who attended the meeting run by Ogilvy chief executive Shelly Lazarus. ''I can't point to a super success yet.

But you've got to remember this one thing: Chinese companies are very quick learners.''Walk the aisles of a local Wal-Mart, Target or Best Buy, and the words Made in China are stamped on everything from sweat socks to auto parts to cell phones.

But those products still carry all-American brand names like Fruit of the Loom or Delco or Motorola.China won't stay Brand C forever, though.Chinese companies are not satisfied just slapping someone else's name on their products.

Some Chinese companies want to buy established western brands, others will build from scratch. They all share a common urge to own brand names they can export worldwide — and import the profits back to China.Consumer electronics company TCL of China bought Thomson Electronics, maker of RCA televisions.

China's Shanghai Automotive Industry Corp. was seeking a western brand when it offered to rescue Britain's failed MG Rover early this year.Go-it-alone strategies seem likely to be the favored strategy, though.China's Haier Group tried to buy instant credibility last spring with its bid for Maytag Corp. But when Whirlpool Corp. nabbed Maytag, Haier opted to go solo.

Haier currently sells low-end refrigerators in Wal-Marts and Targets across the United States, where it competes exclusively on price. But its strategy calls for a push into higher-end products, and bigger profits to Haier.To pull it off, Haier is building a research and design center near its U.S. production plant in Camden, S.C.

There it will collect intelligence about American tastes and market trends. Back in China, designers will use the information to dream up new products that will sell in the United States. In Europe Haier is building market share on an aggressive push into high-style, high-end products.Think U.S. competitors don't take China's new branding effort seriously? They do.

China's China's Chery Automobile Co. may be a rounding error compared to General Motors Corp.'s $193 billion in annual sales. But when Chery announced a daunting plan to enter the crowded U.S. market by 2007 — amidst hints that its advertising budget might reach $225 million a year — GM took note. The auto giant threatened to sue, claiming Chery sounds too much like GM's Chevy. Chery in late September agreed to use a different name plate when it comes to the states.

Nowhere is the push to push product more pronounced than at Lenovo Group, China's biggest maker of personal computers. A close look inside Lenovo's business shows how China's brand-name giants plan to take on the wider world.

Combining leading edge technology, low-cost production, top-flight management methods and cutting edge marketing, they hope to get the job done.Lenovo took two bold steps designed to put it on a world-class stage.

Last year, it ponied up an estimated $75 million to become a top Olympic sponsorship, on the same level as brand-name giants like Visa, Coca-Cola and McDonald's. Then in May it paid $1.75 billion to buy the ThinkPad brand and the rest of the personal computer business from IBM Corp.''China's brand history is very short,'' acknowledges Yuanqing Yang, who engineered the IBM deal late last year. ''Maybe we need time to have several famous brands worldwide. Maybe Lenovo is the beginning of the trend.''Now Yang and other executives on both sides of the Pacific Ocean must make the IBM merger work.

That will mean tackling a challenging cross-cultural merger, keeping production costs low, introducing new technologies, and introducing the Lenovo brand outside China — all while dueling for market share with entrenched giants Dell Computer Co. and Hewlett-Packard.Yang notes that compromise will be key to any success.

For Lenovo, that has meant adopting English as the official language and moving the corporate headquarters to Purchase, N.Y., near IBM's corporate offices. Yang, 41, remains chairman of the company, but the chief executive is an American, former IBM sales executive Steve Ward, 50.

IBM Research marks the big 6-0

By JULIE MORAN ALTERIO
jalterio@thejournalnews.com
THE JOURNAL NEWS

What do the hard disk drive, a supercomputer smart enough to beat a world chess champ and the excimer laser surgery technique that's fixed myopia in millions have in common? All were invented in the research labs of IBM Corp.

Tuesday marks the 60th anniversary of the opening of the Watson Scientific Computing Laboratory. What started in a renovated fraternity house near Columbia University in New York has become the largest corporate research division in the world, with 3,000 scientists toiling at eight labs in six countries.

Over the years, the original mission to build calculating machines to aid the war effort has morphed into a wide-ranging endeavor to invent the future of computing, from the mighty Blue Gene supercomputer that's designed to simulate the complex action of proteins in the human body to minuscule carbon nanotubes that could one day replace silicon in computer chips.
Physicist Jia Chen joined IBM Research in 2003 and today is studying carbon nanotubes at the division's headquarters in Yorktown.
Carbon nanotubes — 50,000 times thinner than a human hair — are one of the most promising materials scientists are pursuing to build smaller and smaller computer chips.
Even so, the 33-year-old Ossining resident said it might take 10 to 15 years for carbon nanotubes to make it into a microprocessor — a timeframe she's happy with given the import of what she's researching.
"We could have a significant contribution to a future technology that could impact everybody's life," Chen said.
Though 50 years separate Chen from Fran Allen in age, the elder researcher voices the same passion about her work at IBM.
Allen joined IBM in 1957 to work at a laboratory in Poughkeepsie, where her colleagues were just inventing the field of computer programming.
"We made a lot of mistakes, and we invented a great many things," she said.
Allen's training as a math teacher wouldn't earn her a slot as a programmer at IBM Research today, but back then there weren't computer science departments at colleges.
Allen was hired with three other women, and the four rented a house nearby in Wappingers Falls that became both a social center and a sanctuary where colleagues gathered to discuss the computer systems they were creating.
"So many of us were single and young, there were no boundaries between work and home. It was a tremendously productive period for all of us," Allen said.
Ski trips, hiking trips and just hanging out were an excuse to work out problems. "Napkins were a favorite tool for doing design," she said.
Allen's work on optimizing computer code is considered pioneering in the field. The Croton-on-Hudson resident was the first woman to become an IBM Fellow, the company's highest technical honor.

"It was very, very challenging. There was never a doubt that it was important," said Allen, who retired in 2002.

Working at a corporate research lab such as IBM's was satisfying, Allen said, because she could see the results in actual products.

"The role of research has always been to do the groundbreaking work and, as part of IBM, to transfer the work to products," Allen said. "I see my career as standing on a wall and seeing both ways. One way is seeing new possibilities and the other is building new products."
Bill Strachan, the program director for technical recruiting for IBM Research, said that mix of pure science and product development makes a career at the company appealing for Ph.D. graduates.

IBM hires about 100 new researchers a year.

"It's intriguing to students that researchers will meet customers 10 to 20 percent of the time. They are looking to solve real problems," he said.

That interaction has intensified in the past 10 or so years as IBM has increasingly viewed its research division as a competitive advantage. A staff of scientists who aren't contributing to the bottom line is a luxury the company can no longer afford.

"Typically we were the ivory tower, but we are an arm of the IBM Corp. and we need to benefit the IBM Corp.," Strachan said.

This strategy is also designed to avoid a repeat of missteps of the past. IBM's invention of relational databases and Reduced Instruction Set Computer architecture benefited competitors such as Oracle and Sun Microsystems years before IBM moved into the database and Unix computing markets.

The head of IBM Research, Paul Horn, senior vice president, said there is a sense in IBM that his division is what sets the Armonk-based computer giant apart from companies that compete on price.

"IBM's business model is to operate in the high value segment of the information technology market. High value means high margins, and it means you can get a return on the research and development dollars you spend," Horn said.

Since 1996, IBM has invested about $5 billion a year on research. Last year, the company spent $5.7 billion.

That investment has translated into a boom in patents. IBM has been granted more U.S. patents than any other company for the past 12 years. Last year, IBM received 3,248 patents.
Increasingly, more of the ideas being generated are related to IBM's software and services business, said Horn, who joined the company 26 years ago.

"When I came here, we were 85 percent or more hardware. There were very few IBM fellows in software. Software was just stuff to make the hardware work," Horn said.

Today, researchers are turning their attention to consulting with clients to solve complex business problems such as managing fleets of vehicles or analyzing text on the Web.
This shift is a reflection of the contribution of computer services to IBM's finances, with $46.2 billion of $96.3 billion in sales last year generated by IBM Global Services.

"We've staked out as our business model to operate in those areas of the IT industry where research can make a difference, which is pretty nice for the research team," Horn said.
Frederick P. Brooks Jr., a professor of computer science at the University of North Carolina, said the challenge for IBM and other corporate research labs is twofold: "How to fund and maintain a basic research program in hard economic times, and how to get great ideas to transfer effectively to the product divisions," he said.

Brooks will be in Yorktown on Tuesday when IBM celebrates its anniversary to lead a discussion on the research division's early days.

Brooks contends that IBM could not have become the company it is without its research division.

"IBM has maintained technical leadership in many areas — magnetics, silicon processing, circuits, computer architecture, compilers — in large part because the research division was well out in front of the developing technologies, mastering them before it was economically or technically feasible to put them into products," he said.

IBM's creation of a research lab reinforced the example of such rivals as Bell Labs and stimulated others such as Xerox's PARC and RCA's Sarnoff Center, Brooks said.
Though the Watson lab wasn't started until 1945, IBM had begun experimenting with a research center more than a decade earlier.

In 1933, during the Great Depression, Thomas J. Watson Sr. oversaw the creation of a dedicated center for the company's engineers and inventors in a building near a manufacturing plant in Endicott, N.Y.

Engineers there researched new types of insulated wire for electrical connections and studied how to strengthen paper for the company's punch cards.
Journalist Kevin Maney, author of "The Maverick and His Machine," a biography of Watson Sr., wrote that IBM spent $1 million — or nearly 6 percent of annual revenue at the time — on that first lab.

The lab was stocked with the latest scientific instruments and a basement weather room that simulated temperature and humidity in every climate where IBM machines were used.
"How could Watson justify this? He spent $1 million for something as amorphous as research and development when businesses were falling apart and nearly one-quarter of Americans had barely enough to subsist. But building the lab had a logic to it. Somehow, Watson had to stimulate demand. He had to come up with products that companies couldn't resist, whatever the economic conditions," Maney wrote.

The breakthroughs of that lab included the first punch card machines that could handle multiplication and division.

Today, the pre-eminent machine at IBM Research is the Blue Gene supercomputer, the product of a $100 million, five-year effort begun in 1999.

A Blue Gene system built for the Department of Energy's Lawrence Livermore National Laboratory in California is the fastest computer in the world, capable of 136.8 trillion calculations per second, or 136.8 teraflops.

The second-fastest — at 91.2 teraflops — is a Blue Gene system installed in Yorktown.
Al Gara, chief architect for Blue Gene, said designing a new machine with the ability to tackle the complexity of human biology meant rethinking the way supercomputers are built.
"We were trying to do some groundbreaking in terms of protein folding but also in terms of the computer science," Gara said.

Rather than build a power-hungry custom system, IBM scientists used a low-power computer chip in a new configuration. The result? The Blue Gene system for Livermore consumes 15 times less power and is at least 50 percent smaller than the fastest computers of just a couple years ago.

"It's quite clear that the way to get more performance in the future is unrelated to how we got more performance in the past," Gara said.

As the limits of miniaturization of silicon transistors approach, research into new methods to build faster computers is vital, Gara said.

"The future is really unknown, and there is enormous activity and excitement at the lab. If ever we need a research division, it's now," Gara said.

Ensuring there will be an ample supply of scientists to staff the lab is also a priority as IBM ponders its future, said Jim Wynne, a Yorktown researcher and manager of the company's outreach to schoolchildren.

Wynne — who was inducted into the National Inventors Hall of Fame thanks in part to his role in developing excimer laser surgery — said about 300 of his colleagues lecture students on everything from nanotechnology to how search engines work in an effort to spark their interest in science.
"I'm not going to be able to invent the rest of my life. I want to see a future generation of youngsters from my community continue in this field. IBM wants to invest in the pipeline."


IBM Research highlights 1945 1956 1957 1961 1966 1967 1970 1980 1981 1986 1992 1997 IBM opens Watson Scientific Computing Laboratory in New York City.

IBM researchers in San Jose, Calif., produce the first magnetic hard disk. These disks are a vital part of all computers today. Researcher John Backus invents FORTRAN, which became a widely used computer programming language for technical work. The language allowed programs to be written in an easy-to-understand format, such as C=A/B, instead of in 1s and 0s.

IBM moves its research headquarters from Manhattan to Westchester County.Yorktown inventor Bob Dennard invents one-transistor dynamic RAM, known as DRAM. Chips based on this invention are still the dominant form of computer memory.Yorktown researcher Benoit B. Mandelbrot publishes a paper introducing fractal geometry, which describes the shape of irregular natural objects, such as tree branches.

IBM scientist Ted Codd publishes a paper introducing the concept of relational databases, which stores data in tables that are easy to interpret by nontechnical users. Nearly all databases today are based on the concept.

IBM builds its first prototype computer using Reduced Instruction Set Computer architecture, which was invented by IBM scientist John Cocke in the 1970s. Two scientists from the IBM Zurich research laboratory, Gerd K. Binnig and Heinrich Rohrer, invent the Scanning Tunneling Microscope, which provides a first-ever look at the topography of atoms. The scientists won the Nobel Prize in physics in 1986 for this work.

Two scientists from the IBM Zurich research laboratory, J. Georg Bednorz and K. Alex Muller, discover superconductivity in ceramic oxides that carry electricity without loss of energy at much higher temperatures than any other superconductor. A year later, the men win the Nobel Prize in physics for their discovery.

IBM introduces ThinkPad laptops, which feature the TrackPoint, a little red pointing device in the middle of the keyboard that was created by IBM researcher Ted Selker, who is now at MIT.

Deep Blue defeats World Chess Champion Garry Kasparov in the first known case of a computer besting a world class player in a tournament.

School gets a mobile computer lab outfitted with 30 new Dell notebooks

JAMESBURG—Laptop computers are now accessible to the hot little hands of students at the John F. Kennedy School. The 30 new Dell notebooks that make up the mobile computer lab and are wheeled through the school each day are reserved by teachers in two-hour increments for classroom activities and lessons.

The mobile lab is a new addition for the 2005-2006 school year and supplements stationary computer lab at the school, which has 30 Dell desktop computers. Jamesburg School Superintendent Shirley Bzdewka said Wednesday that the addition of the mobile computer lab to JFK is an extension of a program started at the Grace M. Breckwedel School.

GMB has a similar IBM mobile computer lab that the school district purchased in 2003.

She said the Dell computers at JFK are especially easy-to-use because they use Wi-Fi connections for Internet access, which means the computers are linked through a wireless network.

"The computers are great because they can be used anywhere in the building," Ms. Bzdewka said. "You can even use them outside."

Ms. Bzdewka said the compact design of laptop computers is ideal for the elementary school and its students. "I think the laptops are more manageable for the younger kids because they're smaller," Ms. Bzdewka said.

She said that although JFK has Internet connectivity in all rooms and two or three computers per classroom, the mobile computer lab is an asset because it allows children to use them all at once, in their own classrooms.

"It's great because the mobile lab really bring technology to the classroom," Ms. Bzdewka said.

Ms. Bzdewka said students use the computers for word processing, reading and math activities. She said the mobile labs at GMB and JFK have been problem-free from damage so far. "There's been no breakage and no problems with computers getting ruined or broken," Ms. Bzdewka said. "We haven't told the students to handle them any different than normal computers, and we've found they're pretty durable."

Ms. Bzdewka said the district bought Dell laptops because the IBM computers had shorter battery life. The district paid about $30,000 for the Dell mobile lab, according to district Business Administrator Tom Reynolds.