Think you have trouble with your taxes? Well, I’m not going to feel sorry for the richest man in the world, but apparently his tax return is so complex that it requires a special computer, and because of that, if the info gets on the wrong computer, he erroneously gets notices of non-payment.
“Their normal computers can’t deal with the numbers,” he (Gates) said of the hapless taxmen. “So I am constantly getting these notices telling me I haven’t paid something, when really it is just on the wrong computer.”
According to an IRS spokeman, the agency’s main computers do not use the Windows operating system. IBM designed the original processing system for the IRS in the 1960s, which was largely tape and disk driven. Believe it or not the same system is used today, processing the bulk of America’s tax returns including, presumably at one time at least, that of Gates. Source:
Forbes
We Say: Perhaps it’s time for a hardware and software upgrade? I wonder if Ellison gets his own computer, and if not, if he’s jealous of that as well?
Friday, February 03, 2006
IBM exec urges companies to rethink innovation
It's probably not a shock to learn that Procter & Gamble outsources its computer support, but what about its Ivory soap? It turns out that Ivory, the company's oldest brand, isn't manufactured in a P&G factory.
What might even be more surprising is that P&G has opened up all 28,000 of the patents in its portfolio to license by other companies — even rival Clorox.
Those steps are why P&G is showcased as a company that's learned to let go of old ways of doing business in a new book by a top IBM executive.
"Let Go to Grow: Escaping the Commodity Trap," by Linda S. Sanford, an IBM senior vice president, with Dave Taylor, an author and professor, is a handbook for corporations that want to compete amid the forces of globalization.
Chappaqua resident Sanford, 52, is leading the Armonk-based computer giant's own transformation into a more nimble player as the Internet brings competitors from around the world as close as a computer click away.
"The fact that the world is so global, so flat and connected through networks is having a major impact on businesses and how they survive and grow in a commoditized world," Sanford said.
Citing examples from corporations such as General Electric, eBay, Dell, Toyota, Southwest, UPS, FedEx, BMW and IBM, Sanford makes a case for business leaders to look outside their own walls for innovation.
"You want to be able to shore up skills and talents around your core capabilities and leverage other skills and talents wherever they reside around the world," Sanford said. "There is no corner of the globe that has the corner on talent anymore."
Sanford said she was influenced by "The World is Flat," the 2005 book by New York Times columnist Thomas L. Friedman.
On the opening page of Friedman's book, he describes playing golf at a course in Bangalore when a friend urges him to aim his shot at the nearby glass-and-steel buildings of Microsoft and IBM — a scene that illustrates how much major U.S. companies have invested in India.
A central theme in both Friedman's and Sanford's books is how the Internet makes it possible for intellectual tasks to be performed anywhere.
Sanford gives the example of Eli Lilly, which created an innovation center on the Web and posts research and development problems that qualified scientists around the world are invited to solve.
"Pharmaceutical giant as they are, they recognize that they don't necessarily have the corner on innovation," Sanford said.
The 6,000 registered scientists from 125 countries are paid up to $100,000 for their input if they solve the problem.
"The success rate has been far, far higher than the in-house performance and at one-sixth the cost," Sanford said.
Businesses are realizing that it's not desirable or practical to control every aspect of their operations anymore. At one point in time, car makers even mined their own iron ore for steel.
"Clearly, that's not affordable today," Sanford said.
Letting go of control isn't easy. "What is the biggest inhibitor? It's the culture of an organization. Most of us have grown up in the world of command and control. Letting go is not intuitive," Sanford said.
IBM's own transformation from a manufacturer of computers to a purveyor of technological expertise took bringing in an outsider as chairman and chief executive. Louis V. Gerstner Jr. and his successor, Samuel Palmisano, have led IBM's rebirth as the biggest consulting company in the world.
In the process, IBM shed the hard disk drive business it pioneered and sold its PC business to a Chinese manufacturer.
When IBM started outsourcing manufacturing, it was a "shock to the system," Sanford said, but today the philosophy is ingrained.
For example, the company's Global Services arm acts like an outsourcer within IBM.
There used to be 128 chief information officers running the tech support for various departments in IBM, Sanford said. Today, there is just one CIO, and he doesn't even run the data centers, which fall under the purview of Global Services.
In addition, IBM outsources its human resources administration to Fidelity.
"It frees our people in human resources to focus on compensation strategy instead of worrying about administration," she said. "Core to us is talent. We are people-based. We need to be sure that HR focuses on identifying, contacting and retaining talent, so we put the bulk of our resources there."
Sanford doesn't argue for outsourcing as a means to just save money.
Pointing to Amazon.com, which owes at least part of its success to timely delivery of goods by partners such as UPS, Sanford said today's outsourcing deals are all about creating "value webs."
"Outsourcing isn't the point of a value web. I make that distinction because I think it's important. Creating a value web means drawing on the strength of other companies, and letting them draw on your strength. That's different than giving something to someone else because they can do it cheaper," she said.
Sanford acknowledges that an IBM executive writing a book in favor of outsourcing is a bit like Ben & Jerry's writing a book extolling the virtues of eating more ice cream.
"Clearly, we have the experience, we have the skills and we have the capabilities in our consulting services that can help customers," she said. "Yes, I am telling the story and saying, 'We can help you do this.' "
Sanford, one of the highest-ranking women at Big Blue, said she decided to write the book in part because so many customers have asked her to share IBM's own story.
About half of Sanford's time is spent meeting with customers, which means countless hours on airplanes. Sanford traveled about 74,000 miles last year. "I had a lot of time to reflect on what I was seeing and observing around the world," she said.
Sanford said she wrote on weekends, evenings and during vacation time.
She wrote down her thoughts and her collaborator helped make them easy to understand — as well as weeding out those three-letter acronyms beloved by all IBMers.
"Dave was very instrumental in helping me make sure that it made sense to the reader," Sanford said.
Sanford is one of just a handful of IBM executives who have written general interest business books.
• Longtime CEO Thomas J. Watson Jr., son of the company founder, wrote two books, "A Business and Its Beliefs: The Ideas That Helped Build IBM" and "Father, Son & Co.: My Life at IBM and Beyond."
• "Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround" was former chief Gerstner's story of his role leading IBM from the brink of bankruptcy in 1993 to its resurgence when he left in 2002.
• John R. Patrick, a former vice president of Internet technology at IBM, discusses the importance of the Internet in "Net Attitude."
• Ossining resident William J. Holstein, editor-in-chief of Chief Executive Magazine, said Sanford's book will be useful to corporate executives.
"This is one of the core challenges that everybody is wrestling with: What do we do that's really special — which used to be called core competence — versus what can be outsourced," he said.
He said examples of IBM's own transformation are compelling.
"They seem to live what they preach. The fact that they got out of the PC business says that they didn't see an advantage. They are concentrating their energies where they have an advantage, which is in services," he said.
"Obviously, this book is an intellectual basis for people making decisions that over the long term would help IBM's business. There is no question that there is an IBM agenda here. You would expect nothing less," Holstein said.
The trend toward outsourcing, which has received a lot of attention since the 2004 presidential election, is still in the early stages, from Holstein's view.
"It's not over by any stretch of the imagination. This is why her book touches on what I think should be one of the major debates in the country: How do we as Americans move up in the chain to be able to do more sophisticated things that can't be moved to Hyderabad," he said.
To workers alarmed by the thought of their jobs moving to India or elsewhere in the world as companies let go of work that used to be performed in the United States, Sanford says: "We are a country built on entrepreneurship and innovation. If you go back over the centuries, we have constantly come up with the next new innovation. We have to make sure our educational system supports that."
It's probably not a shock to learn that Procter & Gamble outsources its computer support, but what about its Ivory soap? It turns out that Ivory, the company's oldest brand, isn't manufactured in a P&G factory.
What might even be more surprising is that P&G has opened up all 28,000 of the patents in its portfolio to license by other companies — even rival Clorox.
Those steps are why P&G is showcased as a company that's learned to let go of old ways of doing business in a new book by a top IBM executive.
"Let Go to Grow: Escaping the Commodity Trap," by Linda S. Sanford, an IBM senior vice president, with Dave Taylor, an author and professor, is a handbook for corporations that want to compete amid the forces of globalization.
Chappaqua resident Sanford, 52, is leading the Armonk-based computer giant's own transformation into a more nimble player as the Internet brings competitors from around the world as close as a computer click away.
"The fact that the world is so global, so flat and connected through networks is having a major impact on businesses and how they survive and grow in a commoditized world," Sanford said.
Citing examples from corporations such as General Electric, eBay, Dell, Toyota, Southwest, UPS, FedEx, BMW and IBM, Sanford makes a case for business leaders to look outside their own walls for innovation.
"You want to be able to shore up skills and talents around your core capabilities and leverage other skills and talents wherever they reside around the world," Sanford said. "There is no corner of the globe that has the corner on talent anymore."
Sanford said she was influenced by "The World is Flat," the 2005 book by New York Times columnist Thomas L. Friedman.
On the opening page of Friedman's book, he describes playing golf at a course in Bangalore when a friend urges him to aim his shot at the nearby glass-and-steel buildings of Microsoft and IBM — a scene that illustrates how much major U.S. companies have invested in India.
A central theme in both Friedman's and Sanford's books is how the Internet makes it possible for intellectual tasks to be performed anywhere.
Sanford gives the example of Eli Lilly, which created an innovation center on the Web and posts research and development problems that qualified scientists around the world are invited to solve.
"Pharmaceutical giant as they are, they recognize that they don't necessarily have the corner on innovation," Sanford said.
The 6,000 registered scientists from 125 countries are paid up to $100,000 for their input if they solve the problem.
"The success rate has been far, far higher than the in-house performance and at one-sixth the cost," Sanford said.
Businesses are realizing that it's not desirable or practical to control every aspect of their operations anymore. At one point in time, car makers even mined their own iron ore for steel.
"Clearly, that's not affordable today," Sanford said.
Letting go of control isn't easy. "What is the biggest inhibitor? It's the culture of an organization. Most of us have grown up in the world of command and control. Letting go is not intuitive," Sanford said.
IBM's own transformation from a manufacturer of computers to a purveyor of technological expertise took bringing in an outsider as chairman and chief executive. Louis V. Gerstner Jr. and his successor, Samuel Palmisano, have led IBM's rebirth as the biggest consulting company in the world.
In the process, IBM shed the hard disk drive business it pioneered and sold its PC business to a Chinese manufacturer.
When IBM started outsourcing manufacturing, it was a "shock to the system," Sanford said, but today the philosophy is ingrained.
For example, the company's Global Services arm acts like an outsourcer within IBM.
There used to be 128 chief information officers running the tech support for various departments in IBM, Sanford said. Today, there is just one CIO, and he doesn't even run the data centers, which fall under the purview of Global Services.
In addition, IBM outsources its human resources administration to Fidelity.
"It frees our people in human resources to focus on compensation strategy instead of worrying about administration," she said. "Core to us is talent. We are people-based. We need to be sure that HR focuses on identifying, contacting and retaining talent, so we put the bulk of our resources there."
Sanford doesn't argue for outsourcing as a means to just save money.
Pointing to Amazon.com, which owes at least part of its success to timely delivery of goods by partners such as UPS, Sanford said today's outsourcing deals are all about creating "value webs."
"Outsourcing isn't the point of a value web. I make that distinction because I think it's important. Creating a value web means drawing on the strength of other companies, and letting them draw on your strength. That's different than giving something to someone else because they can do it cheaper," she said.
Sanford acknowledges that an IBM executive writing a book in favor of outsourcing is a bit like Ben & Jerry's writing a book extolling the virtues of eating more ice cream.
"Clearly, we have the experience, we have the skills and we have the capabilities in our consulting services that can help customers," she said. "Yes, I am telling the story and saying, 'We can help you do this.' "
Sanford, one of the highest-ranking women at Big Blue, said she decided to write the book in part because so many customers have asked her to share IBM's own story.
About half of Sanford's time is spent meeting with customers, which means countless hours on airplanes. Sanford traveled about 74,000 miles last year. "I had a lot of time to reflect on what I was seeing and observing around the world," she said.
Sanford said she wrote on weekends, evenings and during vacation time.
She wrote down her thoughts and her collaborator helped make them easy to understand — as well as weeding out those three-letter acronyms beloved by all IBMers.
"Dave was very instrumental in helping me make sure that it made sense to the reader," Sanford said.
Sanford is one of just a handful of IBM executives who have written general interest business books.
• Longtime CEO Thomas J. Watson Jr., son of the company founder, wrote two books, "A Business and Its Beliefs: The Ideas That Helped Build IBM" and "Father, Son & Co.: My Life at IBM and Beyond."
• "Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround" was former chief Gerstner's story of his role leading IBM from the brink of bankruptcy in 1993 to its resurgence when he left in 2002.
• John R. Patrick, a former vice president of Internet technology at IBM, discusses the importance of the Internet in "Net Attitude."
• Ossining resident William J. Holstein, editor-in-chief of Chief Executive Magazine, said Sanford's book will be useful to corporate executives.
"This is one of the core challenges that everybody is wrestling with: What do we do that's really special — which used to be called core competence — versus what can be outsourced," he said.
He said examples of IBM's own transformation are compelling.
"They seem to live what they preach. The fact that they got out of the PC business says that they didn't see an advantage. They are concentrating their energies where they have an advantage, which is in services," he said.
"Obviously, this book is an intellectual basis for people making decisions that over the long term would help IBM's business. There is no question that there is an IBM agenda here. You would expect nothing less," Holstein said.
The trend toward outsourcing, which has received a lot of attention since the 2004 presidential election, is still in the early stages, from Holstein's view.
"It's not over by any stretch of the imagination. This is why her book touches on what I think should be one of the major debates in the country: How do we as Americans move up in the chain to be able to do more sophisticated things that can't be moved to Hyderabad," he said.
To workers alarmed by the thought of their jobs moving to India or elsewhere in the world as companies let go of work that used to be performed in the United States, Sanford says: "We are a country built on entrepreneurship and innovation. If you go back over the centuries, we have constantly come up with the next new innovation. We have to make sure our educational system supports that."
www.thejournalnews.com
What might even be more surprising is that P&G has opened up all 28,000 of the patents in its portfolio to license by other companies — even rival Clorox.
Those steps are why P&G is showcased as a company that's learned to let go of old ways of doing business in a new book by a top IBM executive.
"Let Go to Grow: Escaping the Commodity Trap," by Linda S. Sanford, an IBM senior vice president, with Dave Taylor, an author and professor, is a handbook for corporations that want to compete amid the forces of globalization.
Chappaqua resident Sanford, 52, is leading the Armonk-based computer giant's own transformation into a more nimble player as the Internet brings competitors from around the world as close as a computer click away.
"The fact that the world is so global, so flat and connected through networks is having a major impact on businesses and how they survive and grow in a commoditized world," Sanford said.
Citing examples from corporations such as General Electric, eBay, Dell, Toyota, Southwest, UPS, FedEx, BMW and IBM, Sanford makes a case for business leaders to look outside their own walls for innovation.
"You want to be able to shore up skills and talents around your core capabilities and leverage other skills and talents wherever they reside around the world," Sanford said. "There is no corner of the globe that has the corner on talent anymore."
Sanford said she was influenced by "The World is Flat," the 2005 book by New York Times columnist Thomas L. Friedman.
On the opening page of Friedman's book, he describes playing golf at a course in Bangalore when a friend urges him to aim his shot at the nearby glass-and-steel buildings of Microsoft and IBM — a scene that illustrates how much major U.S. companies have invested in India.
A central theme in both Friedman's and Sanford's books is how the Internet makes it possible for intellectual tasks to be performed anywhere.
Sanford gives the example of Eli Lilly, which created an innovation center on the Web and posts research and development problems that qualified scientists around the world are invited to solve.
"Pharmaceutical giant as they are, they recognize that they don't necessarily have the corner on innovation," Sanford said.
The 6,000 registered scientists from 125 countries are paid up to $100,000 for their input if they solve the problem.
"The success rate has been far, far higher than the in-house performance and at one-sixth the cost," Sanford said.
Businesses are realizing that it's not desirable or practical to control every aspect of their operations anymore. At one point in time, car makers even mined their own iron ore for steel.
"Clearly, that's not affordable today," Sanford said.
Letting go of control isn't easy. "What is the biggest inhibitor? It's the culture of an organization. Most of us have grown up in the world of command and control. Letting go is not intuitive," Sanford said.
IBM's own transformation from a manufacturer of computers to a purveyor of technological expertise took bringing in an outsider as chairman and chief executive. Louis V. Gerstner Jr. and his successor, Samuel Palmisano, have led IBM's rebirth as the biggest consulting company in the world.
In the process, IBM shed the hard disk drive business it pioneered and sold its PC business to a Chinese manufacturer.
When IBM started outsourcing manufacturing, it was a "shock to the system," Sanford said, but today the philosophy is ingrained.
For example, the company's Global Services arm acts like an outsourcer within IBM.
There used to be 128 chief information officers running the tech support for various departments in IBM, Sanford said. Today, there is just one CIO, and he doesn't even run the data centers, which fall under the purview of Global Services.
In addition, IBM outsources its human resources administration to Fidelity.
"It frees our people in human resources to focus on compensation strategy instead of worrying about administration," she said. "Core to us is talent. We are people-based. We need to be sure that HR focuses on identifying, contacting and retaining talent, so we put the bulk of our resources there."
Sanford doesn't argue for outsourcing as a means to just save money.
Pointing to Amazon.com, which owes at least part of its success to timely delivery of goods by partners such as UPS, Sanford said today's outsourcing deals are all about creating "value webs."
"Outsourcing isn't the point of a value web. I make that distinction because I think it's important. Creating a value web means drawing on the strength of other companies, and letting them draw on your strength. That's different than giving something to someone else because they can do it cheaper," she said.
Sanford acknowledges that an IBM executive writing a book in favor of outsourcing is a bit like Ben & Jerry's writing a book extolling the virtues of eating more ice cream.
"Clearly, we have the experience, we have the skills and we have the capabilities in our consulting services that can help customers," she said. "Yes, I am telling the story and saying, 'We can help you do this.' "
Sanford, one of the highest-ranking women at Big Blue, said she decided to write the book in part because so many customers have asked her to share IBM's own story.
About half of Sanford's time is spent meeting with customers, which means countless hours on airplanes. Sanford traveled about 74,000 miles last year. "I had a lot of time to reflect on what I was seeing and observing around the world," she said.
Sanford said she wrote on weekends, evenings and during vacation time.
She wrote down her thoughts and her collaborator helped make them easy to understand — as well as weeding out those three-letter acronyms beloved by all IBMers.
"Dave was very instrumental in helping me make sure that it made sense to the reader," Sanford said.
Sanford is one of just a handful of IBM executives who have written general interest business books.
• Longtime CEO Thomas J. Watson Jr., son of the company founder, wrote two books, "A Business and Its Beliefs: The Ideas That Helped Build IBM" and "Father, Son & Co.: My Life at IBM and Beyond."
• "Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround" was former chief Gerstner's story of his role leading IBM from the brink of bankruptcy in 1993 to its resurgence when he left in 2002.
• John R. Patrick, a former vice president of Internet technology at IBM, discusses the importance of the Internet in "Net Attitude."
• Ossining resident William J. Holstein, editor-in-chief of Chief Executive Magazine, said Sanford's book will be useful to corporate executives.
"This is one of the core challenges that everybody is wrestling with: What do we do that's really special — which used to be called core competence — versus what can be outsourced," he said.
He said examples of IBM's own transformation are compelling.
"They seem to live what they preach. The fact that they got out of the PC business says that they didn't see an advantage. They are concentrating their energies where they have an advantage, which is in services," he said.
"Obviously, this book is an intellectual basis for people making decisions that over the long term would help IBM's business. There is no question that there is an IBM agenda here. You would expect nothing less," Holstein said.
The trend toward outsourcing, which has received a lot of attention since the 2004 presidential election, is still in the early stages, from Holstein's view.
"It's not over by any stretch of the imagination. This is why her book touches on what I think should be one of the major debates in the country: How do we as Americans move up in the chain to be able to do more sophisticated things that can't be moved to Hyderabad," he said.
To workers alarmed by the thought of their jobs moving to India or elsewhere in the world as companies let go of work that used to be performed in the United States, Sanford says: "We are a country built on entrepreneurship and innovation. If you go back over the centuries, we have constantly come up with the next new innovation. We have to make sure our educational system supports that."
It's probably not a shock to learn that Procter & Gamble outsources its computer support, but what about its Ivory soap? It turns out that Ivory, the company's oldest brand, isn't manufactured in a P&G factory.
What might even be more surprising is that P&G has opened up all 28,000 of the patents in its portfolio to license by other companies — even rival Clorox.
Those steps are why P&G is showcased as a company that's learned to let go of old ways of doing business in a new book by a top IBM executive.
"Let Go to Grow: Escaping the Commodity Trap," by Linda S. Sanford, an IBM senior vice president, with Dave Taylor, an author and professor, is a handbook for corporations that want to compete amid the forces of globalization.
Chappaqua resident Sanford, 52, is leading the Armonk-based computer giant's own transformation into a more nimble player as the Internet brings competitors from around the world as close as a computer click away.
"The fact that the world is so global, so flat and connected through networks is having a major impact on businesses and how they survive and grow in a commoditized world," Sanford said.
Citing examples from corporations such as General Electric, eBay, Dell, Toyota, Southwest, UPS, FedEx, BMW and IBM, Sanford makes a case for business leaders to look outside their own walls for innovation.
"You want to be able to shore up skills and talents around your core capabilities and leverage other skills and talents wherever they reside around the world," Sanford said. "There is no corner of the globe that has the corner on talent anymore."
Sanford said she was influenced by "The World is Flat," the 2005 book by New York Times columnist Thomas L. Friedman.
On the opening page of Friedman's book, he describes playing golf at a course in Bangalore when a friend urges him to aim his shot at the nearby glass-and-steel buildings of Microsoft and IBM — a scene that illustrates how much major U.S. companies have invested in India.
A central theme in both Friedman's and Sanford's books is how the Internet makes it possible for intellectual tasks to be performed anywhere.
Sanford gives the example of Eli Lilly, which created an innovation center on the Web and posts research and development problems that qualified scientists around the world are invited to solve.
"Pharmaceutical giant as they are, they recognize that they don't necessarily have the corner on innovation," Sanford said.
The 6,000 registered scientists from 125 countries are paid up to $100,000 for their input if they solve the problem.
"The success rate has been far, far higher than the in-house performance and at one-sixth the cost," Sanford said.
Businesses are realizing that it's not desirable or practical to control every aspect of their operations anymore. At one point in time, car makers even mined their own iron ore for steel.
"Clearly, that's not affordable today," Sanford said.
Letting go of control isn't easy. "What is the biggest inhibitor? It's the culture of an organization. Most of us have grown up in the world of command and control. Letting go is not intuitive," Sanford said.
IBM's own transformation from a manufacturer of computers to a purveyor of technological expertise took bringing in an outsider as chairman and chief executive. Louis V. Gerstner Jr. and his successor, Samuel Palmisano, have led IBM's rebirth as the biggest consulting company in the world.
In the process, IBM shed the hard disk drive business it pioneered and sold its PC business to a Chinese manufacturer.
When IBM started outsourcing manufacturing, it was a "shock to the system," Sanford said, but today the philosophy is ingrained.
For example, the company's Global Services arm acts like an outsourcer within IBM.
There used to be 128 chief information officers running the tech support for various departments in IBM, Sanford said. Today, there is just one CIO, and he doesn't even run the data centers, which fall under the purview of Global Services.
In addition, IBM outsources its human resources administration to Fidelity.
"It frees our people in human resources to focus on compensation strategy instead of worrying about administration," she said. "Core to us is talent. We are people-based. We need to be sure that HR focuses on identifying, contacting and retaining talent, so we put the bulk of our resources there."
Sanford doesn't argue for outsourcing as a means to just save money.
Pointing to Amazon.com, which owes at least part of its success to timely delivery of goods by partners such as UPS, Sanford said today's outsourcing deals are all about creating "value webs."
"Outsourcing isn't the point of a value web. I make that distinction because I think it's important. Creating a value web means drawing on the strength of other companies, and letting them draw on your strength. That's different than giving something to someone else because they can do it cheaper," she said.
Sanford acknowledges that an IBM executive writing a book in favor of outsourcing is a bit like Ben & Jerry's writing a book extolling the virtues of eating more ice cream.
"Clearly, we have the experience, we have the skills and we have the capabilities in our consulting services that can help customers," she said. "Yes, I am telling the story and saying, 'We can help you do this.' "
Sanford, one of the highest-ranking women at Big Blue, said she decided to write the book in part because so many customers have asked her to share IBM's own story.
About half of Sanford's time is spent meeting with customers, which means countless hours on airplanes. Sanford traveled about 74,000 miles last year. "I had a lot of time to reflect on what I was seeing and observing around the world," she said.
Sanford said she wrote on weekends, evenings and during vacation time.
She wrote down her thoughts and her collaborator helped make them easy to understand — as well as weeding out those three-letter acronyms beloved by all IBMers.
"Dave was very instrumental in helping me make sure that it made sense to the reader," Sanford said.
Sanford is one of just a handful of IBM executives who have written general interest business books.
• Longtime CEO Thomas J. Watson Jr., son of the company founder, wrote two books, "A Business and Its Beliefs: The Ideas That Helped Build IBM" and "Father, Son & Co.: My Life at IBM and Beyond."
• "Who Says Elephants Can't Dance? Inside IBM's Historic Turnaround" was former chief Gerstner's story of his role leading IBM from the brink of bankruptcy in 1993 to its resurgence when he left in 2002.
• John R. Patrick, a former vice president of Internet technology at IBM, discusses the importance of the Internet in "Net Attitude."
• Ossining resident William J. Holstein, editor-in-chief of Chief Executive Magazine, said Sanford's book will be useful to corporate executives.
"This is one of the core challenges that everybody is wrestling with: What do we do that's really special — which used to be called core competence — versus what can be outsourced," he said.
He said examples of IBM's own transformation are compelling.
"They seem to live what they preach. The fact that they got out of the PC business says that they didn't see an advantage. They are concentrating their energies where they have an advantage, which is in services," he said.
"Obviously, this book is an intellectual basis for people making decisions that over the long term would help IBM's business. There is no question that there is an IBM agenda here. You would expect nothing less," Holstein said.
The trend toward outsourcing, which has received a lot of attention since the 2004 presidential election, is still in the early stages, from Holstein's view.
"It's not over by any stretch of the imagination. This is why her book touches on what I think should be one of the major debates in the country: How do we as Americans move up in the chain to be able to do more sophisticated things that can't be moved to Hyderabad," he said.
To workers alarmed by the thought of their jobs moving to India or elsewhere in the world as companies let go of work that used to be performed in the United States, Sanford says: "We are a country built on entrepreneurship and innovation. If you go back over the centuries, we have constantly come up with the next new innovation. We have to make sure our educational system supports that."
www.thejournalnews.com
Tuesday, January 31, 2006
Iowa State University supercomputer to help decipher corn genome
By David Pitt
AMES, Iowa – Scientists at Iowa State University are using one of the nation's 10 most powerful computers to help decipher the corn genome, a project that could allow them to expand the plant's uses in plastics, fuel and fiber.
To determine how a corn genome – the basic genetic structure of the plant – is put together, scientists must assemble more than 60 million bits of genetic material.
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Scientists are planning to use the $1.25 million IBM BlueGene supercomputer, unveiled Monday, which has the equivalent processing power of more than 2,000 home computers and a storage capacity more than 1,000 times greater. It performs as many as 5.7 trillion calculations per second, said Srinivas Aluru, professor of electrical and computer engineering.
The computer's speed enables scientists to shorten the time of processing data that would have previously taken two to three months to just days, Aluru said.
Understanding the genome will allow plant biologists to “build a better corn plant that, for example, produces biodegradable plastic or ethanol,” said Patrick Schnable, an agronomy professor and director of the Center for Plant Genomics at Iowa State University.
Iowa State is one of four universities working on the corn genome project, which is scheduled take about three years.
The BlueGene/L computer is the 73rd most powerful supercomputer in the world, according to a list compiled by scientists at the University of Mannheim in Germany, the University of Tennessee and the Lawrence Berkeley National Laboratory.
It was financed with a $600,000 grant from the National Science Foundation and $650,000 from the university.
Besides the corn genome project, scientists hope to use the supercomputer to help understand protein networks in organisms, which can lead to breakthroughs in disease research.
Such networks can involve 30,000 proteins interacting with each other, too many calculations for the typical computer to perform in adequate time, said Bob Jernigan, professor of biochemistry and biophysics.
“It's the unavailability of computers of this magnitude that limits many projects in engineering and computer science. This can have an important influence on all kinds of research,” he said.
http://www.signonsandiego.com/
AMES, Iowa – Scientists at Iowa State University are using one of the nation's 10 most powerful computers to help decipher the corn genome, a project that could allow them to expand the plant's uses in plastics, fuel and fiber.
To determine how a corn genome – the basic genetic structure of the plant – is put together, scientists must assemble more than 60 million bits of genetic material.
Advertisement
Scientists are planning to use the $1.25 million IBM BlueGene supercomputer, unveiled Monday, which has the equivalent processing power of more than 2,000 home computers and a storage capacity more than 1,000 times greater. It performs as many as 5.7 trillion calculations per second, said Srinivas Aluru, professor of electrical and computer engineering.
The computer's speed enables scientists to shorten the time of processing data that would have previously taken two to three months to just days, Aluru said.
Understanding the genome will allow plant biologists to “build a better corn plant that, for example, produces biodegradable plastic or ethanol,” said Patrick Schnable, an agronomy professor and director of the Center for Plant Genomics at Iowa State University.
Iowa State is one of four universities working on the corn genome project, which is scheduled take about three years.
The BlueGene/L computer is the 73rd most powerful supercomputer in the world, according to a list compiled by scientists at the University of Mannheim in Germany, the University of Tennessee and the Lawrence Berkeley National Laboratory.
It was financed with a $600,000 grant from the National Science Foundation and $650,000 from the university.
Besides the corn genome project, scientists hope to use the supercomputer to help understand protein networks in organisms, which can lead to breakthroughs in disease research.
Such networks can involve 30,000 proteins interacting with each other, too many calculations for the typical computer to perform in adequate time, said Bob Jernigan, professor of biochemistry and biophysics.
“It's the unavailability of computers of this magnitude that limits many projects in engineering and computer science. This can have an important influence on all kinds of research,” he said.
http://www.signonsandiego.com/
Iowa State University supercomputer to help decipher corn genome
By David Pitt
AMES, Iowa – Scientists at Iowa State University are using one of the nation's 10 most powerful computers to help decipher the corn genome, a project that could allow them to expand the plant's uses in plastics, fuel and fiber.
To determine how a corn genome – the basic genetic structure of the plant – is put together, scientists must assemble more than 60 million bits of genetic material.
Advertisement
Scientists are planning to use the $1.25 million IBM BlueGene supercomputer, unveiled Monday, which has the equivalent processing power of more than 2,000 home computers and a storage capacity more than 1,000 times greater. It performs as many as 5.7 trillion calculations per second, said Srinivas Aluru, professor of electrical and computer engineering.
The computer's speed enables scientists to shorten the time of processing data that would have previously taken two to three months to just days, Aluru said.
Understanding the genome will allow plant biologists to “build a better corn plant that, for example, produces biodegradable plastic or ethanol,” said Patrick Schnable, an agronomy professor and director of the Center for Plant Genomics at Iowa State University.
Iowa State is one of four universities working on the corn genome project, which is scheduled take about three years.
The BlueGene/L computer is the 73rd most powerful supercomputer in the world, according to a list compiled by scientists at the University of Mannheim in Germany, the University of Tennessee and the Lawrence Berkeley National Laboratory.
It was financed with a $600,000 grant from the National Science Foundation and $650,000 from the university.
Besides the corn genome project, scientists hope to use the supercomputer to help understand protein networks in organisms, which can lead to breakthroughs in disease research.
Such networks can involve 30,000 proteins interacting with each other, too many calculations for the typical computer to perform in adequate time, said Bob Jernigan, professor of biochemistry and biophysics.
“It's the unavailability of computers of this magnitude that limits many projects in engineering and computer science. This can have an important influence on all kinds of research,” he said.
www.signonsandiego.com
AMES, Iowa – Scientists at Iowa State University are using one of the nation's 10 most powerful computers to help decipher the corn genome, a project that could allow them to expand the plant's uses in plastics, fuel and fiber.
To determine how a corn genome – the basic genetic structure of the plant – is put together, scientists must assemble more than 60 million bits of genetic material.
Advertisement
Scientists are planning to use the $1.25 million IBM BlueGene supercomputer, unveiled Monday, which has the equivalent processing power of more than 2,000 home computers and a storage capacity more than 1,000 times greater. It performs as many as 5.7 trillion calculations per second, said Srinivas Aluru, professor of electrical and computer engineering.
The computer's speed enables scientists to shorten the time of processing data that would have previously taken two to three months to just days, Aluru said.
Understanding the genome will allow plant biologists to “build a better corn plant that, for example, produces biodegradable plastic or ethanol,” said Patrick Schnable, an agronomy professor and director of the Center for Plant Genomics at Iowa State University.
Iowa State is one of four universities working on the corn genome project, which is scheduled take about three years.
The BlueGene/L computer is the 73rd most powerful supercomputer in the world, according to a list compiled by scientists at the University of Mannheim in Germany, the University of Tennessee and the Lawrence Berkeley National Laboratory.
It was financed with a $600,000 grant from the National Science Foundation and $650,000 from the university.
Besides the corn genome project, scientists hope to use the supercomputer to help understand protein networks in organisms, which can lead to breakthroughs in disease research.
Such networks can involve 30,000 proteins interacting with each other, too many calculations for the typical computer to perform in adequate time, said Bob Jernigan, professor of biochemistry and biophysics.
“It's the unavailability of computers of this magnitude that limits many projects in engineering and computer science. This can have an important influence on all kinds of research,” he said.
www.signonsandiego.com
Global rise in cyber crime predicted by IBM
IBM is predicting a global rise in cyber crime and warns that New Zealand is not immune.
In its annual Global Business Security Index Report, IBM predicts a rise in professional, organised attacks. Security Practice Leader, John Martin, says it's no longer amateur virus writers threatening industries and individuals.
He warns that businesses will also have to be on the look out for bot-nets -- networks of computers hijacked by third parties, who use them to commit online crime.
In the past, online criminals created botnets using thousands of computers but now they're more stealthy and harder to detect.
But Mr Martin says computer users will still be the easiest point of attack for cyber criminals and warns users to be on their guard.
He also says criminals will make greater use of wireless devices to break into corporate systems.
www.radionz.co.nz
In its annual Global Business Security Index Report, IBM predicts a rise in professional, organised attacks. Security Practice Leader, John Martin, says it's no longer amateur virus writers threatening industries and individuals.
He warns that businesses will also have to be on the look out for bot-nets -- networks of computers hijacked by third parties, who use them to commit online crime.
In the past, online criminals created botnets using thousands of computers but now they're more stealthy and harder to detect.
But Mr Martin says computer users will still be the easiest point of attack for cyber criminals and warns users to be on their guard.
He also says criminals will make greater use of wireless devices to break into corporate systems.
www.radionz.co.nz
Monday, January 30, 2006
Region sends four to world 'think fest' on innovation
(www.insidebayarea.com).- What does Emeryville businessman Alan Kramer have in common with China's vice premier Zeng Peiyan, German Chancellor Angela Markel and the chief executives of the world's largest companies?
They are all among the people who gathered this past week at the annual "think fest" known as the World Economic Forum in Davos, Switzerland.
Kramer, founder of biometrics startup UPEK Inc., was among the 2,340 of the world's most influential people attending the forum, along with Richmond recycling inventor Michael Biddle, founder of MBA Polymers Inc.; Emeryville biotechnologist Jay Keasling, founder of Amyris Biotechnologies Inc.; and Jay Wohlgemuth, co-founder of South San Francisco's XDx Inc.
Kramer, Biddle, Keasling and Wohlgemuth are not household names along the lines of Bill Gates and Bono — two newsmakers in recent World Economic Forum meetings.
Yet the founders of these local companies were invited to the globe's most prestigious business and political meeting because they are "technology pioneers," according to the World Economic Forum. The forum named 36 companies from around the globe as technology pioneers because they are "involved in the development of life-changing technology innovation and have the potential for long-term impact on business and society." Twelve of the 36 pioneers are from California.
"I'm excited just to be recognized on that scale and be in the presence of those types of leaders," Kramer of UPEK said during an interview before the forum began. "But also being there and hearing what people are talking about might open up other ideas for our company," he said. Though he speaks humbly, Kramer does not dispute that the company he formed is a technology pioneer.
"In a matter of only a few years, UPEK succeeded to drive a technology considered essentially experimental to one quickly gaining mainstream acceptance" from major electronics companies, he said.
UPEK pioneered a way to detect the subtle changes in the electrical field emanating from human skin to create a fingerprint swipe security system that is much smaller, lighter, cheaper and more reliable than fingerprint security systems that have existed before.
In this day when incidents of data stolen from computers are frequent and identity theft is a common scare, the biometric sensors from UPEK fairly quickly found a market.
IBM puts them in its ThinkPad T43 notebook computers. Fujitsu puts them in cell phones sold in Japan. Government agencies use them at security checks for building entrances.
The older fingerprint security technology used optical scanners that essentially take digital pictures of fingerprints and match them with stored pictures of those allowed access to a device or building. But these systems have always been somewhat large — too large to install in notebook computers for which lightness is a characteristic.
UPEK's sensors use analog technology or analog chips to measure changes in the electrical field that emanates from human skin. The sensor, therefore, detects the ridges and valleys of the groves on a fingertip.
Previously, the idea of putting an optical scanner in a laptop or cell phone was blocked by the added size and weight — and thus inconvenience. UPEK's biometric scanner is only 3/4- by 1/2-inch large. Last year, IBM sold 1 million of its ThinkPads with the biometric sensor. UPEK also signed deals with laptop makers Sony, Acer and NEC.
Over in Richmond, Biddle and MBA Polymers Inc., have developed a way to recycle engineered plastics and metals from computers, refrigerators and other electronic appliances and complex waste. Since billions of pounds of computers, cell phones, televisions and the like are thrown away every year — and to date complex plastics have not been recyclable — MBA Polymers meets a huge worldwide need.
"We start with a mixture of shredded material, which has both plastics and non-plastics," explained MBA Polymers President Richard McCombs. "So the first process is to separate out non-plastics and end up with a pure plastic stream. The succeeding steps are to find a physical property of each type of plastic by which that plastic can be identified and separated, like density."
It is the plastics separation that is the real breakthrough in the automated separation system that Biddleand colleagues invented.
"I think the need for our technology is dramatic at this point," McCombs said, noting that both Japan and the European Union recently passed laws requiring the recycling of all electronic appliances. "Billions of pounds of electronics are being discarded each year."
Being invited to the World Economic Forum is "obviously quite an honor," McCombs said. Biddle, the founder and chief executive of MBA, was out of the country and not available for comment.
Back in Emeryville, Amyris Biotechnologies was chosen as a technology pioneer because it found a way to use engineered or synthetic microbes to create compounds used to fight disease but which have hitherto been found only in nature.
Its current project is creating a bioengineered microbe to produce an anti-malaria drug that resembles artemisinin — an expensive drug made from the wormwood plant and not affordable for many Third World people.
"Malaria kills approximately one million children annually," Keasling said in a statement.
Amyris is using its technology to boost the supply and decrease the cost of drugs needed to treat individuals in countries with endemic rates of malaria.
South San Francisco-based XDx is a privately held molecular diagnostics company.
Its AlloMap technology enables doctors to determine with a simple blood test whether a patient will reject a transplanted heart, according to a forum press release about the technology pioneers.
Earlier this month, XDx said it raised $26.5 million in financing, with investors including Duff, Ackerman & Goodrich; Intel Capital; Kleiner Perkins Caufield & Byers; and Texas Pacific Group Ventures.
They are all among the people who gathered this past week at the annual "think fest" known as the World Economic Forum in Davos, Switzerland.
Kramer, founder of biometrics startup UPEK Inc., was among the 2,340 of the world's most influential people attending the forum, along with Richmond recycling inventor Michael Biddle, founder of MBA Polymers Inc.; Emeryville biotechnologist Jay Keasling, founder of Amyris Biotechnologies Inc.; and Jay Wohlgemuth, co-founder of South San Francisco's XDx Inc.
Kramer, Biddle, Keasling and Wohlgemuth are not household names along the lines of Bill Gates and Bono — two newsmakers in recent World Economic Forum meetings.
Yet the founders of these local companies were invited to the globe's most prestigious business and political meeting because they are "technology pioneers," according to the World Economic Forum. The forum named 36 companies from around the globe as technology pioneers because they are "involved in the development of life-changing technology innovation and have the potential for long-term impact on business and society." Twelve of the 36 pioneers are from California.
"I'm excited just to be recognized on that scale and be in the presence of those types of leaders," Kramer of UPEK said during an interview before the forum began. "But also being there and hearing what people are talking about might open up other ideas for our company," he said. Though he speaks humbly, Kramer does not dispute that the company he formed is a technology pioneer.
"In a matter of only a few years, UPEK succeeded to drive a technology considered essentially experimental to one quickly gaining mainstream acceptance" from major electronics companies, he said.
UPEK pioneered a way to detect the subtle changes in the electrical field emanating from human skin to create a fingerprint swipe security system that is much smaller, lighter, cheaper and more reliable than fingerprint security systems that have existed before.
In this day when incidents of data stolen from computers are frequent and identity theft is a common scare, the biometric sensors from UPEK fairly quickly found a market.
IBM puts them in its ThinkPad T43 notebook computers. Fujitsu puts them in cell phones sold in Japan. Government agencies use them at security checks for building entrances.
The older fingerprint security technology used optical scanners that essentially take digital pictures of fingerprints and match them with stored pictures of those allowed access to a device or building. But these systems have always been somewhat large — too large to install in notebook computers for which lightness is a characteristic.
UPEK's sensors use analog technology or analog chips to measure changes in the electrical field that emanates from human skin. The sensor, therefore, detects the ridges and valleys of the groves on a fingertip.
Previously, the idea of putting an optical scanner in a laptop or cell phone was blocked by the added size and weight — and thus inconvenience. UPEK's biometric scanner is only 3/4- by 1/2-inch large. Last year, IBM sold 1 million of its ThinkPads with the biometric sensor. UPEK also signed deals with laptop makers Sony, Acer and NEC.
Over in Richmond, Biddle and MBA Polymers Inc., have developed a way to recycle engineered plastics and metals from computers, refrigerators and other electronic appliances and complex waste. Since billions of pounds of computers, cell phones, televisions and the like are thrown away every year — and to date complex plastics have not been recyclable — MBA Polymers meets a huge worldwide need.
"We start with a mixture of shredded material, which has both plastics and non-plastics," explained MBA Polymers President Richard McCombs. "So the first process is to separate out non-plastics and end up with a pure plastic stream. The succeeding steps are to find a physical property of each type of plastic by which that plastic can be identified and separated, like density."
It is the plastics separation that is the real breakthrough in the automated separation system that Biddleand colleagues invented.
"I think the need for our technology is dramatic at this point," McCombs said, noting that both Japan and the European Union recently passed laws requiring the recycling of all electronic appliances. "Billions of pounds of electronics are being discarded each year."
Being invited to the World Economic Forum is "obviously quite an honor," McCombs said. Biddle, the founder and chief executive of MBA, was out of the country and not available for comment.
Back in Emeryville, Amyris Biotechnologies was chosen as a technology pioneer because it found a way to use engineered or synthetic microbes to create compounds used to fight disease but which have hitherto been found only in nature.
Its current project is creating a bioengineered microbe to produce an anti-malaria drug that resembles artemisinin — an expensive drug made from the wormwood plant and not affordable for many Third World people.
"Malaria kills approximately one million children annually," Keasling said in a statement.
Amyris is using its technology to boost the supply and decrease the cost of drugs needed to treat individuals in countries with endemic rates of malaria.
South San Francisco-based XDx is a privately held molecular diagnostics company.
Its AlloMap technology enables doctors to determine with a simple blood test whether a patient will reject a transplanted heart, according to a forum press release about the technology pioneers.
Earlier this month, XDx said it raised $26.5 million in financing, with investors including Duff, Ackerman & Goodrich; Intel Capital; Kleiner Perkins Caufield & Byers; and Texas Pacific Group Ventures.
Thales announces rugged 6U VME clone
(www.eetasia.com).- Thales disclosed that they are teaming to produce a fully rugged version of the current generation PowerPC blade server called the PowerNode5. PowerNode5 is a rugged 6U VME clone of the IBM JS20 blade design. This new product provides a very high level of performance with a full binary compatibility with IBM JS20 blades servers, in a form factor fully adapted to any of today's embedded systems requirements, said the company.
"This product aims at applications being developed on the standard IBM blade server and needing to be deployed in tougher conditions. The Thales expertise in the rugged domain was successfully put to test to overcome the challenge of fitting such powerful silicon into the existing 6U VME envelope. Unlike some other vendors, we at Thales, believe that the incremental nature of the VME ecosystem is not yet over and that leading edge processor technology can still fit side to side with legacy equipments. This new product is here to prove it," said Thales Computers' GM Alain Albarello.
The PowerNode5 is available in standard convection cooled and rugged conduction cooled versions for harsh environment applications. PowerNode5 features two IBM 970FX processors clocked at 1.6GHz—even the rugged conduction cooled version—and up to 2GB DDR SDRAM ECC memory with a 6.4GBps memory peak bandwidth. The end-user can initially develop applications on a low-cost, standard IBM blade server and easily port the application to the PowerNode5 system. Additionally, the PowerNode5 offers a smooth migration path from existing PPC G4-based platforms with customers able to easily and efficiently preserve their legacy software investments.
"This new product retains full compatibility with all customer applications which were designed around our specific software to fit large multi-processor Linux based architectures. This software insulation layer remains the same on this newer product and this is excellent news for all our customers with strong legacy requirements," added Valirie Bertheau, VP of marketing for Thales Computers.
The product is available as a board component (the PowerNode5) or pre-integrated in large systems (PowerMP5) with full data transport and management software based on standards such as MPI and HTTP, and runs Red Hat Linux or Wind River VxWorks. In addition, the PowerNode5 features an on-board serial RapidIO switch fabric that allows the end-user to build a powerful and scalable signal processing calculator based on the PowerNode5 building block as well as two Gigabit Ethernet ports. Pricing for the PowerNode5 starts at $11,260 subject to specifications.
"This product aims at applications being developed on the standard IBM blade server and needing to be deployed in tougher conditions. The Thales expertise in the rugged domain was successfully put to test to overcome the challenge of fitting such powerful silicon into the existing 6U VME envelope. Unlike some other vendors, we at Thales, believe that the incremental nature of the VME ecosystem is not yet over and that leading edge processor technology can still fit side to side with legacy equipments. This new product is here to prove it," said Thales Computers' GM Alain Albarello.
The PowerNode5 is available in standard convection cooled and rugged conduction cooled versions for harsh environment applications. PowerNode5 features two IBM 970FX processors clocked at 1.6GHz—even the rugged conduction cooled version—and up to 2GB DDR SDRAM ECC memory with a 6.4GBps memory peak bandwidth. The end-user can initially develop applications on a low-cost, standard IBM blade server and easily port the application to the PowerNode5 system. Additionally, the PowerNode5 offers a smooth migration path from existing PPC G4-based platforms with customers able to easily and efficiently preserve their legacy software investments.
"This new product retains full compatibility with all customer applications which were designed around our specific software to fit large multi-processor Linux based architectures. This software insulation layer remains the same on this newer product and this is excellent news for all our customers with strong legacy requirements," added Valirie Bertheau, VP of marketing for Thales Computers.
The product is available as a board component (the PowerNode5) or pre-integrated in large systems (PowerMP5) with full data transport and management software based on standards such as MPI and HTTP, and runs Red Hat Linux or Wind River VxWorks. In addition, the PowerNode5 features an on-board serial RapidIO switch fabric that allows the end-user to build a powerful and scalable signal processing calculator based on the PowerNode5 building block as well as two Gigabit Ethernet ports. Pricing for the PowerNode5 starts at $11,260 subject to specifications.
Thursday, January 19, 2006
Asia takes knock as US tech giants disappoint
19.01.06
Weak results from technology leaders Intel and Yahoo! are expected to mean bad news for global sharemarkets, raising concerns that tech spending this year could be less than expected. Intel, the world's largest chipmaker, and internet media giant Yahoo! posted results that did not meet expectations, sending shares of both sharply lower and hitting stocks across the sector.
Shares of other marquee tech names also fell: Google shares fell 3.4 per cent, Apple Computer nearly 2 per cent, Dell 3.6 per cent and eBay 3.1 per cent, all in after-hours trade. The first impact outside the US was seen in Asia, where shares of major chip-related stocks fell across the board yesterday as investors fretted about the disappointing results from Intel.
According to Reuters Estimates, the first 49 companies of the S&P-500 that have reported fourth-quarter results have so far collectively missed average Wall Street revenue estimates by 0.25 per cent. Intel suffered from weak demand for processors used in desktop computers and weak sales in the Americas. Revenue at Yahoo! was just below expectations, with higher operating costs crimping profit growth. "The worry with Intel is many investors are expecting higher corporate spending to offset potential weakness in consumer spending for GDP growth this year," said Steve Neimeth, portfolio manager for AUG SunAmerica Asset Management in Jersey City, New Jersey. "If Intel's miss is due to lower corporate spending, this could bode very poorly for economic growth in 2006," he said. IBM, the world's largest computer maker and computer services provider, for its part posted a quarterly profit that rose a higher-than-expected 13 per cent, aided by its consulting business and sales of large computers to businesses. "In light of Intel's very disappointing earnings, it makes IBM's numbers look that much better and makes it look like a possible safe haven for tech investors," Neimeth said. Even so, IBM shares fell 1.3 per cent in extended trade. Including Tuesday's after-hours drop, shares of Intel are up about 2.5 per cent in the last 12 months. On the same basis, IBM stock is down about 13 per cent and shares of Yahoo! are little changed over the past 12 months. Several financial analysts said the Yahoo! earnings shortfall - it missed the average estimate by a penny - reflected flat growth in gross margins and higher than expected operating expenses. Chief financial officer Susan Decker said expenses were up as the company invested in high-growth areas. Yahoo! shares have also been weighed down by competitive concerns over the faster growth of rival Google and the imminent loss of key advertising customer Microsoft, which is gearing up to compete more actively itself in online ads by the middle of this year. And in Intel's case, due partly to the earnings miss, chief executive Paul Otellini said the company would stop issuing mid-quarter updates. Intel missed its own forecast it gave in mid-November, reporting revenue of US$10.2 billion ($14.94 billion), compared with its forecast for US$10.4 billion to US$10.6 billion. "We're starting out in a bit more of a hole for 2006 than we first had thought. We hope to capitalise on any revenue opportunity and a lot will depend on the product," Otellini said.
www.nzherald.co.nz
Weak results from technology leaders Intel and Yahoo! are expected to mean bad news for global sharemarkets, raising concerns that tech spending this year could be less than expected. Intel, the world's largest chipmaker, and internet media giant Yahoo! posted results that did not meet expectations, sending shares of both sharply lower and hitting stocks across the sector.
Shares of other marquee tech names also fell: Google shares fell 3.4 per cent, Apple Computer nearly 2 per cent, Dell 3.6 per cent and eBay 3.1 per cent, all in after-hours trade. The first impact outside the US was seen in Asia, where shares of major chip-related stocks fell across the board yesterday as investors fretted about the disappointing results from Intel.
According to Reuters Estimates, the first 49 companies of the S&P-500 that have reported fourth-quarter results have so far collectively missed average Wall Street revenue estimates by 0.25 per cent. Intel suffered from weak demand for processors used in desktop computers and weak sales in the Americas. Revenue at Yahoo! was just below expectations, with higher operating costs crimping profit growth. "The worry with Intel is many investors are expecting higher corporate spending to offset potential weakness in consumer spending for GDP growth this year," said Steve Neimeth, portfolio manager for AUG SunAmerica Asset Management in Jersey City, New Jersey. "If Intel's miss is due to lower corporate spending, this could bode very poorly for economic growth in 2006," he said. IBM, the world's largest computer maker and computer services provider, for its part posted a quarterly profit that rose a higher-than-expected 13 per cent, aided by its consulting business and sales of large computers to businesses. "In light of Intel's very disappointing earnings, it makes IBM's numbers look that much better and makes it look like a possible safe haven for tech investors," Neimeth said. Even so, IBM shares fell 1.3 per cent in extended trade. Including Tuesday's after-hours drop, shares of Intel are up about 2.5 per cent in the last 12 months. On the same basis, IBM stock is down about 13 per cent and shares of Yahoo! are little changed over the past 12 months. Several financial analysts said the Yahoo! earnings shortfall - it missed the average estimate by a penny - reflected flat growth in gross margins and higher than expected operating expenses. Chief financial officer Susan Decker said expenses were up as the company invested in high-growth areas. Yahoo! shares have also been weighed down by competitive concerns over the faster growth of rival Google and the imminent loss of key advertising customer Microsoft, which is gearing up to compete more actively itself in online ads by the middle of this year. And in Intel's case, due partly to the earnings miss, chief executive Paul Otellini said the company would stop issuing mid-quarter updates. Intel missed its own forecast it gave in mid-November, reporting revenue of US$10.2 billion ($14.94 billion), compared with its forecast for US$10.4 billion to US$10.6 billion. "We're starting out in a bit more of a hole for 2006 than we first had thought. We hope to capitalise on any revenue opportunity and a lot will depend on the product," Otellini said.
www.nzherald.co.nz
Computer science growing into a basic science
Computer science has evolved over many decades. While the early decades were dominated by mechanical calculating machines, today’s computers have evolved from the 1960s into a finite automaton that realises a Turning Machine, using architecture originally proposed by von Neumann. This model provides for a very general purpose machine capable of addressing problems across all endeavours of human activity. The microprocessor revolution, large-scale and super-efficient semiconductor production, huge growth in primary and secondary storage, and high-speed networking and switching capacity have dramatically changed the way end-users look at computers and computer networks.
The enormous computational power now available has led to a situation where computers are routinely used to solve fundamental problems across physical, chemical, biological, engineering, medical and social sciences. There are any numbers of examples to drive home the point. As the following examples show, many of these will be impossible without computersThe ‘Four Color Conjecture,’ originally posed in 1852, was one of the first mathematical theorems to be proved through computational means. Using 1,200 hours of high-speed computers, Kenneth Appel and Wolfgang Haken of the University of Illinois solved the conjecture in 1976.
• Allen Cormack of Tufts University, US, and Godfrey Hounsfield of EMI, England, got their 1979 Nobel prize for physiology and medicine for inventing Computer Aided Tomography (CAT).
• IBM’s ‘Deep Blue’ supercomputer “defeated” chess champion Gary Kasparov in May 1997.
• On September 20, 2002, Boeing announced the launch of its 777 series of aircraft that were “100% digitally designed.”
• On April 14, 2003, a major milestone was reached in biological sciences with the completion of the sequencing of the human genome.
• Computers helped solve the mathematical theorem ‘Four Colour Conjecture’• Boeing used computer graphics to design its 777 series aircraft• Sequencing of the human genome was completed with the help of computers
Against this background, it was interesting to hear eminent computer scientists at the ‘Tech Vista,’ organised recently by Microsoft Research (MSR), India .
Legendary Oxford professor Sir Tony Hoare, winner of the 1980 ACM Award (the equivalent of the Nobel prize in computer science) spoke about his “40 years in computing.” He mentioned his early interest in machine translation and deep interest in ‘programme verification’ that attempts to ‘prove’ the correctness of programmes, than merely ‘testing the programmes’ for possible errors. In the process, he invented the ‘Quick Sort’ algorithm, used billions of times every day by millions of computers around the world.
Professor Raj Reddy, founder-director of the Robotics Institute, Carnegie Mellon University, spoke about his ‘Million Book Digital Library Project.’ He outlined the challenges of automated classification, machine translation, particularly in Indian languages, natural language processing, speech, summarisation and ‘mining’ of large volumes of text to discover ‘hidden patterns.’
Professor Maria Klawe, dean of engineering at Princeton university, shared details of the ‘The Aphasia Project,’ in which she and her researchers are designing hand-held devices that combine images, text and sound to address the special needs of people with cognitive disorder which affects a person’s ability to process words.
Dr Dan Ling, vice-president, Microsoft Research, talked of projects that focus on mobile phones and their interaction with human beings. A particularly interesting project is the one addressing the challenges of patients affected by ‘sleep apnea.’
The talks demonstrated that research in computer science is moving beyond the study of a set of ‘computing machinery.’ Just as mathematics and physics have matured into fundamental sciences, computer science, too, is graduating into one. This is of special significance for India, where the scientific community confuses the study of computer science with the acquisition of IT skills leading to well-paying jobs, and often laments that computer science is “killing” other basic sciences.
We do need good physicists, chemists, material scientists and mathematicians. Computer science, if properly appro-ached, will nourish the growth of every other science, be it astronomy, space science, nuclear science, biological science, materials science, or health science.
fecolumnists.expressindia.com
The enormous computational power now available has led to a situation where computers are routinely used to solve fundamental problems across physical, chemical, biological, engineering, medical and social sciences. There are any numbers of examples to drive home the point. As the following examples show, many of these will be impossible without computersThe ‘Four Color Conjecture,’ originally posed in 1852, was one of the first mathematical theorems to be proved through computational means. Using 1,200 hours of high-speed computers, Kenneth Appel and Wolfgang Haken of the University of Illinois solved the conjecture in 1976.
• Allen Cormack of Tufts University, US, and Godfrey Hounsfield of EMI, England, got their 1979 Nobel prize for physiology and medicine for inventing Computer Aided Tomography (CAT).
• IBM’s ‘Deep Blue’ supercomputer “defeated” chess champion Gary Kasparov in May 1997.
• On September 20, 2002, Boeing announced the launch of its 777 series of aircraft that were “100% digitally designed.”
• On April 14, 2003, a major milestone was reached in biological sciences with the completion of the sequencing of the human genome.
• Computers helped solve the mathematical theorem ‘Four Colour Conjecture’• Boeing used computer graphics to design its 777 series aircraft• Sequencing of the human genome was completed with the help of computers
Against this background, it was interesting to hear eminent computer scientists at the ‘Tech Vista,’ organised recently by Microsoft Research (MSR), India .
Legendary Oxford professor Sir Tony Hoare, winner of the 1980 ACM Award (the equivalent of the Nobel prize in computer science) spoke about his “40 years in computing.” He mentioned his early interest in machine translation and deep interest in ‘programme verification’ that attempts to ‘prove’ the correctness of programmes, than merely ‘testing the programmes’ for possible errors. In the process, he invented the ‘Quick Sort’ algorithm, used billions of times every day by millions of computers around the world.
Professor Raj Reddy, founder-director of the Robotics Institute, Carnegie Mellon University, spoke about his ‘Million Book Digital Library Project.’ He outlined the challenges of automated classification, machine translation, particularly in Indian languages, natural language processing, speech, summarisation and ‘mining’ of large volumes of text to discover ‘hidden patterns.’
Professor Maria Klawe, dean of engineering at Princeton university, shared details of the ‘The Aphasia Project,’ in which she and her researchers are designing hand-held devices that combine images, text and sound to address the special needs of people with cognitive disorder which affects a person’s ability to process words.
Dr Dan Ling, vice-president, Microsoft Research, talked of projects that focus on mobile phones and their interaction with human beings. A particularly interesting project is the one addressing the challenges of patients affected by ‘sleep apnea.’
The talks demonstrated that research in computer science is moving beyond the study of a set of ‘computing machinery.’ Just as mathematics and physics have matured into fundamental sciences, computer science, too, is graduating into one. This is of special significance for India, where the scientific community confuses the study of computer science with the acquisition of IT skills leading to well-paying jobs, and often laments that computer science is “killing” other basic sciences.
We do need good physicists, chemists, material scientists and mathematicians. Computer science, if properly appro-ached, will nourish the growth of every other science, be it astronomy, space science, nuclear science, biological science, materials science, or health science.
fecolumnists.expressindia.com
IBM grant furnishes Council on Aging with computers
Thursday, January 19, 2006The Council on Aging will benefit from an IBM on Demand Community grant of two high-powered IBM personal computers. The grant was made at the request of Jim Meuse, who is an IBM retiree and active volunteer with the Council on Aging.
"We are proud to underscore the continuation of IBM's strong commitment to the Wakefield community through our On Demand Community program," said Sean Rush, IBM senior state executive. "We anticipate this gift will help our local community organizations such as the Council on Aging continue to provide excellent service to our citizens."
"The Council on Aging is delighted to be partnering with IBM to provide better technology to seniors using our computer center," said Judy Luciano, COA director. "Better technology means greater efficiency."
IBM launched On Demand Community in November 2003. Since then, over 61,000 employees worldwide have registered and are tracking their hours to be eligible for grants of technology or cash awards to the organizations where they volunteer. In June 2004, IBM announced the next step in its On Demand Community volunteer initiative by enabling its approximately 160,000 retirees worldwide to leverage new technology tools to increase the impact and value of volunteer efforts in schools and local agencies across the globe. Currently over 1,200 IBM employee and retirees in Massachusetts have registered at the On Demand Community Web site.
www2.townonline.com
"We are proud to underscore the continuation of IBM's strong commitment to the Wakefield community through our On Demand Community program," said Sean Rush, IBM senior state executive. "We anticipate this gift will help our local community organizations such as the Council on Aging continue to provide excellent service to our citizens."
"The Council on Aging is delighted to be partnering with IBM to provide better technology to seniors using our computer center," said Judy Luciano, COA director. "Better technology means greater efficiency."
IBM launched On Demand Community in November 2003. Since then, over 61,000 employees worldwide have registered and are tracking their hours to be eligible for grants of technology or cash awards to the organizations where they volunteer. In June 2004, IBM announced the next step in its On Demand Community volunteer initiative by enabling its approximately 160,000 retirees worldwide to leverage new technology tools to increase the impact and value of volunteer efforts in schools and local agencies across the globe. Currently over 1,200 IBM employee and retirees in Massachusetts have registered at the On Demand Community Web site.
www2.townonline.com
Wednesday, January 18, 2006
Tech titans Intel, IBM cite soft 4th-quarter revenue
NewsStand - Wednesday, January 18, 2006
USA TODAY
Michelle Kessler
SAN FRANCISCO -- Tech giants Intel and IBM reported disappointing fourth-quarter revenue Tuesday, getting the corporate earnings season off to a dismal start.Intel, the world's largest chipmaker, reported revenue of $10.2billion, below its own estimate of $10.4billion to $10.6billion. Its shares dropped 9.5% to $23.10 in after-hours trading on the news, released after the market's close.
IBM, which sells everything from computer components to consulting services, reported revenue of $24.4billion. That was well below the $25.5billion Wall Street analysts on average had expected. After hours, IBM shares were unchanged at $83.
The weak sales are an ominous sign for the tech industry, which has spent three years clawing its way back from the dot-com bust. But tech analysts say that some of the shortfall came from operational problems at the companies instead of a massive slowdown.
"The PC environment is generally pretty healthy," says equity analyst Richard Whittington with Caris & Co.
But it didn't seem that way to Intel, at least in the last few weeks in the quarter. That's when revenue tumbled, CEO Paul Otellini said. He blamed product shortages, falling prices and weakening demand. Despite that, Intel's net income of $2.5billion, or 40 cents a share, rose from $2.1billion, or 33 cents a share, a year ago. But Intel's profit margin was 61.8%, less than its estimate of 63%.
Blame rival Advanced Micro Devices, Whittington says. "AMD is widely perceived to have better-quality products. They're forcing Intel to lower its prices."
In the current quarter, Intel expects revenue of $9.1 billion to $9.7 billion. While the first quarter is typically slower than the fourth, that's a greater decline than usual, says equity analyst Ashok Kumar at Raymond James. That's troublesome, especially as Intel and AMD are building more chip factories, he says.
Intel also said it would stop releasing midquarter earnings updates -- the numbers it missed so badly Tuesday. Instead, the chipmaker will provide more information during quarterly reports.
IBM at least had some good news. Net income of $3.2billion, or $1.99 a share, rose from $2.8billion, or $1.67 a share, a year ago. That was more than analysts had expected. (The results include a $267million charge related to IBM's decision to discontinue its pension plan.)
The company achieved the strong profit despite unfavorable fluctuations in currency exchange rates, says equity analyst Richard Petersen at Pacific Crest Securities. Those fluctuations might help explain why revenue was lower than Wall Street expectations, he says.
Another good sign: IBM boosted profit in its consulting division. Sales of big, back-office computers were strong. IBM CFO Mark Loughridge says the company is healthy, despite the revenue weakness. "Each segment contributed solid profit growth," he said.
To see more of USAToday.com, or to subscribe, go to http://www.usatoday.com
http://www.menafn.com/
USA TODAY
Michelle Kessler
SAN FRANCISCO -- Tech giants Intel and IBM reported disappointing fourth-quarter revenue Tuesday, getting the corporate earnings season off to a dismal start.Intel, the world's largest chipmaker, reported revenue of $10.2billion, below its own estimate of $10.4billion to $10.6billion. Its shares dropped 9.5% to $23.10 in after-hours trading on the news, released after the market's close.
IBM, which sells everything from computer components to consulting services, reported revenue of $24.4billion. That was well below the $25.5billion Wall Street analysts on average had expected. After hours, IBM shares were unchanged at $83.
The weak sales are an ominous sign for the tech industry, which has spent three years clawing its way back from the dot-com bust. But tech analysts say that some of the shortfall came from operational problems at the companies instead of a massive slowdown.
"The PC environment is generally pretty healthy," says equity analyst Richard Whittington with Caris & Co.
But it didn't seem that way to Intel, at least in the last few weeks in the quarter. That's when revenue tumbled, CEO Paul Otellini said. He blamed product shortages, falling prices and weakening demand. Despite that, Intel's net income of $2.5billion, or 40 cents a share, rose from $2.1billion, or 33 cents a share, a year ago. But Intel's profit margin was 61.8%, less than its estimate of 63%.
Blame rival Advanced Micro Devices, Whittington says. "AMD is widely perceived to have better-quality products. They're forcing Intel to lower its prices."
In the current quarter, Intel expects revenue of $9.1 billion to $9.7 billion. While the first quarter is typically slower than the fourth, that's a greater decline than usual, says equity analyst Ashok Kumar at Raymond James. That's troublesome, especially as Intel and AMD are building more chip factories, he says.
Intel also said it would stop releasing midquarter earnings updates -- the numbers it missed so badly Tuesday. Instead, the chipmaker will provide more information during quarterly reports.
IBM at least had some good news. Net income of $3.2billion, or $1.99 a share, rose from $2.8billion, or $1.67 a share, a year ago. That was more than analysts had expected. (The results include a $267million charge related to IBM's decision to discontinue its pension plan.)
The company achieved the strong profit despite unfavorable fluctuations in currency exchange rates, says equity analyst Richard Petersen at Pacific Crest Securities. Those fluctuations might help explain why revenue was lower than Wall Street expectations, he says.
Another good sign: IBM boosted profit in its consulting division. Sales of big, back-office computers were strong. IBM CFO Mark Loughridge says the company is healthy, despite the revenue weakness. "Each segment contributed solid profit growth," he said.
To see more of USAToday.com, or to subscribe, go to http://www.usatoday.com
http://www.menafn.com/
IBM profit gains on corporate computers
BOSTON (AP) — A new line of mainframe computers and positive trends in the chip business boosted fourth-quarter results at IBM (IBM), where net profits rose 13% and beat Wall Street expectations Tuesday.
The report also provided a crucial update on the health of IBM's services business, which accounts for more than half of Big Blue's revenue. IBM saw a shortfall in long-term services contracts signed in the fourth quarter, though it was not as severe as some analysts had feared.
In the last three months of 2005, IBM earned $3.19 billion, or $1.99 a share, on revenue of $24.4 billion.
The results were pulled down 10 cents a share by a $267 million charge stemming from IBM's recent decision to freeze its pension plan for U.S. workers in 2008, and by 2 cents a share because of an accounting change.
Leaving those figures out, the $2.11 in earnings per share easily beat the $1.94 consensus of analysts surveyed by Thomson Financial.
However, IBM fell short of the revenue forecast of $25.5 billion.
In the same period of 2004, IBM registered a net profit of $2.83 billion, $1.67 a share, with revenue of $27.7 billion. Subtracting the performance of IBM's personal-computer division, which was later sold to China's Lenovo Group, earnings would have been $2.77 billion, $1.64 a share, on $24.7 billion in revenue.
That means IBM saw a 1% drop in revenue in the fourth quarter, though Mark Loughridge, IBM's chief financial officer, said the company would have seen 3% growth if not for currency fluctuations.
Looking ahead, Loughridge said IBM has "headwinds to work through," including pension costs and a strengthening dollar, which can hurt U.S.-based exporters.
Still, he said, Armonk, N.Y.-based IBM will likely exceed Wall Street's current estimates of $5.66 a share in 2006 by as much as 12 cents. The revenue forecast is $93.4 billion.
IBM shares fell 17 cents to close at $83 on the New York Stock Exchange before the earnings report was released. In after-hours trading, IBM shares were up 30 cents.
The report wrapped a bumpy year in which Big Blue's stock fell 17%, leaving IBM's market capitalization below that of Google. The first quarter fell short of analysts' forecasts, leading IBM to cut 14,500 jobs and prompting a Securities and Exchange Commission investigation into how the company disclosed its stock-compensation expenses.
While the following two quarters marked a return to form, many analysts said the fourth-quarter report would indicate whether IBM had been benefiting more from cost-cutting than from strength in its core businesses.
In particular, some analysts had warned in recent weeks that the services division had seen trouble closing deals in the fourth quarter.
The actual figure, $11.5 billion in signings, was about the midpoint of estimates but still represented a 9% slide from the same period a year earlier. The total backlog of deals in the pipeline, a closely watched measure, remained flat from the previous year.
Services revenue in the period was $12.0 billion, down 5% from $12.6 billion a year earlier. Without currency fluctuations, the dip would have been 1%.
"You put it all together and what it tells me is they're losing more business than they're selling," said analyst Bob Djurdjevic of Annex Research. "And that's a worrisome sign."
Loughridge acknowledged that the services division fell short of IBM's full-year revenue expectations. But he said the business benefited from "productivity initiatives" that helped boost gross margins by 3.1 percentage points. IBM also signed a 10-year, $1.1 billion technology outsourcing pact last week with Gap Inc.
The fourth quarter marked the first full period in which IBM's newest mainframe — the million-dollar-plus machine that is the stalwart of the hardware division — was available for sale. Revenue in the mainframe line rose 5%, but the real hardware star was the microelectronics division, which was a laggard in previous years but saw sales leap 48% in the fourth quarter. The group makes chips for video game consoles and other high-end applications.
In all of 2005, IBM earned $7.93 billion, $4.87 a share, on revenue of $91.1 billion. In 2004, profits were $7.48 billion, $4.38 a share, on revenue of $96.3 billion.
www.usatoday.com
The report also provided a crucial update on the health of IBM's services business, which accounts for more than half of Big Blue's revenue. IBM saw a shortfall in long-term services contracts signed in the fourth quarter, though it was not as severe as some analysts had feared.
In the last three months of 2005, IBM earned $3.19 billion, or $1.99 a share, on revenue of $24.4 billion.
The results were pulled down 10 cents a share by a $267 million charge stemming from IBM's recent decision to freeze its pension plan for U.S. workers in 2008, and by 2 cents a share because of an accounting change.
Leaving those figures out, the $2.11 in earnings per share easily beat the $1.94 consensus of analysts surveyed by Thomson Financial.
However, IBM fell short of the revenue forecast of $25.5 billion.
In the same period of 2004, IBM registered a net profit of $2.83 billion, $1.67 a share, with revenue of $27.7 billion. Subtracting the performance of IBM's personal-computer division, which was later sold to China's Lenovo Group, earnings would have been $2.77 billion, $1.64 a share, on $24.7 billion in revenue.
That means IBM saw a 1% drop in revenue in the fourth quarter, though Mark Loughridge, IBM's chief financial officer, said the company would have seen 3% growth if not for currency fluctuations.
Looking ahead, Loughridge said IBM has "headwinds to work through," including pension costs and a strengthening dollar, which can hurt U.S.-based exporters.
Still, he said, Armonk, N.Y.-based IBM will likely exceed Wall Street's current estimates of $5.66 a share in 2006 by as much as 12 cents. The revenue forecast is $93.4 billion.
IBM shares fell 17 cents to close at $83 on the New York Stock Exchange before the earnings report was released. In after-hours trading, IBM shares were up 30 cents.
The report wrapped a bumpy year in which Big Blue's stock fell 17%, leaving IBM's market capitalization below that of Google. The first quarter fell short of analysts' forecasts, leading IBM to cut 14,500 jobs and prompting a Securities and Exchange Commission investigation into how the company disclosed its stock-compensation expenses.
While the following two quarters marked a return to form, many analysts said the fourth-quarter report would indicate whether IBM had been benefiting more from cost-cutting than from strength in its core businesses.
In particular, some analysts had warned in recent weeks that the services division had seen trouble closing deals in the fourth quarter.
The actual figure, $11.5 billion in signings, was about the midpoint of estimates but still represented a 9% slide from the same period a year earlier. The total backlog of deals in the pipeline, a closely watched measure, remained flat from the previous year.
Services revenue in the period was $12.0 billion, down 5% from $12.6 billion a year earlier. Without currency fluctuations, the dip would have been 1%.
"You put it all together and what it tells me is they're losing more business than they're selling," said analyst Bob Djurdjevic of Annex Research. "And that's a worrisome sign."
Loughridge acknowledged that the services division fell short of IBM's full-year revenue expectations. But he said the business benefited from "productivity initiatives" that helped boost gross margins by 3.1 percentage points. IBM also signed a 10-year, $1.1 billion technology outsourcing pact last week with Gap Inc.
The fourth quarter marked the first full period in which IBM's newest mainframe — the million-dollar-plus machine that is the stalwart of the hardware division — was available for sale. Revenue in the mainframe line rose 5%, but the real hardware star was the microelectronics division, which was a laggard in previous years but saw sales leap 48% in the fourth quarter. The group makes chips for video game consoles and other high-end applications.
In all of 2005, IBM earned $7.93 billion, $4.87 a share, on revenue of $91.1 billion. In 2004, profits were $7.48 billion, $4.38 a share, on revenue of $96.3 billion.
www.usatoday.com
Tech titans Intel, IBM cite soft 4th-quarter revenue
By Michelle Kessler, USA TODAY
SAN FRANCISCO — Tech giants Intel (INTC) and IBM (IBM) reported disappointing fourth-quarter revenue Tuesday, getting the corporate earnings season off to a dismal start.
Intel, the world's largest chipmaker, reported revenue of $10.2 billion, below its own estimate of $10.4 billion to $10.6 billion.
IBM, which sells everything from computer components to consulting services, reported revenue of $24.4 billion. That was well below the $25.5 billion Wall Street analysts on average had expected. After hours, IBM shares were unchanged at $83.
The weak sales are an ominous sign for the tech industry, which has spent three years clawing its way back from the dot-com bust. But tech analysts say that some of the shortfall came from operational problems at the companies instead of a massive slowdown.
"The PC environment is generally pretty healthy," says equity analyst Richard Whittington with Caris & Co.
But it didn't seem that way to Intel, at least in the last few weeks in the quarter. That's when revenue tumbled, CEO Paul Otellini said. He blamed product shortages, falling prices and weakening demand. Despite that, Intel's net income of $2.5 billion, or 40 cents a share, rose from $2.1 billion, or 33 cents a share, a year ago. But Intel's profit margin was 61.8%, less than its estimate of 63%.
Blame rival Advanced Micro Devices, Whittington says. "AMD is widely perceived to have better-quality products. They're forcing Intel to lower its prices."
In the current quarter, Intel expects revenue of $9.1 billion to $9.7 billion. While the first quarter is typically slower than the fourth, that's a greater decline than usual, says equity analyst Ashok Kumar at Raymond James. That's troublesome, especially as Intel and AMD are building more chip factories, he says.
Intel also said it would stop releasing midquarter earnings updates — the numbers it missed so badly Tuesday. Instead, the chipmaker will provide more information during quarterly reports.
IBM at least had some good news. Net income of $3.2 billion, or $1.99 a share, rose from $2.8 billion, or $1.67 a share, a year ago. That was more than analysts had expected. (The results include a $267 million charge related to IBM's decision to discontinue its pension plan.)
The company achieved the strong profit despite unfavorable fluctuations in currency exchange rates, says equity analyst Richard Petersen at Pacific Crest Securities. Those fluctuations might help explain why revenue was lower than Wall Street expectations, he says.
Another good sign: IBM boosted profit in its consulting division. Sales of big, back-office computers were strong. IBM CFO Mark Loughridge says the company is healthy, despite the revenue weakness. "Each segment contributed solid profit growth," he said.
www.usatoday.com
SAN FRANCISCO — Tech giants Intel (INTC) and IBM (IBM) reported disappointing fourth-quarter revenue Tuesday, getting the corporate earnings season off to a dismal start.
Intel, the world's largest chipmaker, reported revenue of $10.2 billion, below its own estimate of $10.4 billion to $10.6 billion.
IBM, which sells everything from computer components to consulting services, reported revenue of $24.4 billion. That was well below the $25.5 billion Wall Street analysts on average had expected. After hours, IBM shares were unchanged at $83.
The weak sales are an ominous sign for the tech industry, which has spent three years clawing its way back from the dot-com bust. But tech analysts say that some of the shortfall came from operational problems at the companies instead of a massive slowdown.
"The PC environment is generally pretty healthy," says equity analyst Richard Whittington with Caris & Co.
But it didn't seem that way to Intel, at least in the last few weeks in the quarter. That's when revenue tumbled, CEO Paul Otellini said. He blamed product shortages, falling prices and weakening demand. Despite that, Intel's net income of $2.5 billion, or 40 cents a share, rose from $2.1 billion, or 33 cents a share, a year ago. But Intel's profit margin was 61.8%, less than its estimate of 63%.
Blame rival Advanced Micro Devices, Whittington says. "AMD is widely perceived to have better-quality products. They're forcing Intel to lower its prices."
In the current quarter, Intel expects revenue of $9.1 billion to $9.7 billion. While the first quarter is typically slower than the fourth, that's a greater decline than usual, says equity analyst Ashok Kumar at Raymond James. That's troublesome, especially as Intel and AMD are building more chip factories, he says.
Intel also said it would stop releasing midquarter earnings updates — the numbers it missed so badly Tuesday. Instead, the chipmaker will provide more information during quarterly reports.
IBM at least had some good news. Net income of $3.2 billion, or $1.99 a share, rose from $2.8 billion, or $1.67 a share, a year ago. That was more than analysts had expected. (The results include a $267 million charge related to IBM's decision to discontinue its pension plan.)
The company achieved the strong profit despite unfavorable fluctuations in currency exchange rates, says equity analyst Richard Petersen at Pacific Crest Securities. Those fluctuations might help explain why revenue was lower than Wall Street expectations, he says.
Another good sign: IBM boosted profit in its consulting division. Sales of big, back-office computers were strong. IBM CFO Mark Loughridge says the company is healthy, despite the revenue weakness. "Each segment contributed solid profit growth," he said.
www.usatoday.com
Thursday, January 05, 2006
IBM to freeze $48B pension plan in 2008
By BRIAN BERGSTEINAP TECHNOLOGY WRITER
BOSTON -- Furthering corporate America's move away from pensions, International Business Machines Corp. said Thursday it will freeze its $48 billion pension plan in 2008 and instead enhance its 401(k) benefits for its 125,000 U.S. workers.
Nearly all IBM's U.S. employees - everyone hired before Jan. 1, 2005 - have pension benefits accruing under a traditional annuity-like plan or a cash-balance plan, which gives workers interest-bearing funds that they can take with them if they leave the company.
But these "defined-benefit" plans are becoming rarer. Companies say the plans carry too many uncertainties, largely because swings in interest rates and investment performances change accounting considerations and the amounts businesses must contribute to their pension funds in a given year.
Industrial giants such as IBM and airlines that still carry pension obligations say the costs and complexities hamper their ability to compete with younger, more nimble rivals that aren't saddled with pension obligations.
Beginning in 2008, then, IBM workers' pension benefits will be locked in place, based on salary and length of service. The accrual of benefits will stop, meaning future raises or additional years with the company will not signify bigger pension checks upon retirement.
Instead, IBM will increase its contribution to its 401(k) plans, in which workers get a defined, predictable amount from the company that they're responsible for investing. IBM will double the percentage of employees' contributions that it matches, to 6 percent of salary; certain employees will be eligible to receive more.
Current retirees will see no changes.
IBM executives said that by no longer having to account for pension accruals that would have mounted after 2008, the Armonk, N.Y.-based technology giant will save between $450 million and $500 million this year alone and up to $3 billion from 2006 through 2010.
However, the change will result in a $270 million charge in the just-completed fourth quarter of 2005.
The action mirrors steps IBM has already taken in other countries, and follows IBM's decision to offer 401(k) plans only - no pensions - to workers hired after Jan. 1, 2005. Similarly, rival Hewlett-Packard Co. decided last year to offer only a 401(k) plan to U.S. workers hired this year and beyond.
Patrick Kendall, a pension expert at Diversified Investment Advisors, a consulting firm specializing in retirement plans, said the "hard freeze" IBM announced Thursday was almost inevitable considering the company's earlier "soft freeze" of closing the plan to new employees.
"I think a lot of these sponsors would like to get out of (defined-benefit plans) entirely, just terminate the plan," he said. But many companies find that termination fees and other complications negate that strategy, he said.
Pensions have been a touchy subject for IBM, which was hit with a federal lawsuit - settled for up to $1.4 billion - filed by employees who contended that IBM committed age discrimination when it shifted to a cash-balance plan.
Randy MacDonald, IBM's head of human resources, said the decision was unrelated to the lawsuit.
"It's all about cost-competitiveness, so that we could continue to be the financially viable company that we are," he said.
BOSTON -- Furthering corporate America's move away from pensions, International Business Machines Corp. said Thursday it will freeze its $48 billion pension plan in 2008 and instead enhance its 401(k) benefits for its 125,000 U.S. workers.
Nearly all IBM's U.S. employees - everyone hired before Jan. 1, 2005 - have pension benefits accruing under a traditional annuity-like plan or a cash-balance plan, which gives workers interest-bearing funds that they can take with them if they leave the company.
But these "defined-benefit" plans are becoming rarer. Companies say the plans carry too many uncertainties, largely because swings in interest rates and investment performances change accounting considerations and the amounts businesses must contribute to their pension funds in a given year.
Industrial giants such as IBM and airlines that still carry pension obligations say the costs and complexities hamper their ability to compete with younger, more nimble rivals that aren't saddled with pension obligations.
Beginning in 2008, then, IBM workers' pension benefits will be locked in place, based on salary and length of service. The accrual of benefits will stop, meaning future raises or additional years with the company will not signify bigger pension checks upon retirement.
Instead, IBM will increase its contribution to its 401(k) plans, in which workers get a defined, predictable amount from the company that they're responsible for investing. IBM will double the percentage of employees' contributions that it matches, to 6 percent of salary; certain employees will be eligible to receive more.
Current retirees will see no changes.
IBM executives said that by no longer having to account for pension accruals that would have mounted after 2008, the Armonk, N.Y.-based technology giant will save between $450 million and $500 million this year alone and up to $3 billion from 2006 through 2010.
However, the change will result in a $270 million charge in the just-completed fourth quarter of 2005.
The action mirrors steps IBM has already taken in other countries, and follows IBM's decision to offer 401(k) plans only - no pensions - to workers hired after Jan. 1, 2005. Similarly, rival Hewlett-Packard Co. decided last year to offer only a 401(k) plan to U.S. workers hired this year and beyond.
Patrick Kendall, a pension expert at Diversified Investment Advisors, a consulting firm specializing in retirement plans, said the "hard freeze" IBM announced Thursday was almost inevitable considering the company's earlier "soft freeze" of closing the plan to new employees.
"I think a lot of these sponsors would like to get out of (defined-benefit plans) entirely, just terminate the plan," he said. But many companies find that termination fees and other complications negate that strategy, he said.
Pensions have been a touchy subject for IBM, which was hit with a federal lawsuit - settled for up to $1.4 billion - filed by employees who contended that IBM committed age discrimination when it shifted to a cash-balance plan.
Randy MacDonald, IBM's head of human resources, said the decision was unrelated to the lawsuit.
"It's all about cost-competitiveness, so that we could continue to be the financially viable company that we are," he said.
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