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Services, ZzzSeries boost IBM figures

Sir Lou scorns piece-part players

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IBM pronounced itself chuffed with its latest quarterly figures, which record a profit of $2 billion on income of $21.6 billion. That's essentially flat, once the strong dollar is taken into account.

The pattern is familiar: with services revenues up, hardware and software revenues slightly down (by 5 per cent to $8.7 billion, and by 5 per cent to $3 billion respectively). Services revenue now matches hardware at $8.7 billion, and CEO 'Sir' Lou Gerstner claimed Big Blue had $16 billion of new services business.

Outside services, growth was patchy: Gerstner praised the performance of the zSeries (formerly S/390) mainframe and DB2, but pointed to weak demand for disk drives, PCs, and in the Tivoli division.

"Some pundits in the industry seem to think that the piece-part makers who fared so well during the dot-com mania will return to leadership simply because the economy will turn around," puffed Lou. "Nothing could be further from the truth."

Compared to IBM, a strange economy in its own right, almost everyone else is a piece-part maker. IBM isn't immune to a downturn in demand, said Lou, but IBM's geographic performance - there's very little difference across Asia, Europe and the US - is in itself intriguing. ®

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