IBM 1997 Annual Report Download - page 51

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49
management discussion
International Business Machines Corporation
and Subsidiary Companies
Year 2000
What is commonly known as the “Year 2000 issue” arises
because many computer hardware and software systems
use only two digits to represent the year. As a result,
these systems and programs may not calculate dates
beyond 1999, which may cause errors in information or
systems failures.
With respect to its internal systems, the company is taking
appropriate steps to remediate the Year 2000 issues and
does not expect the costs of these efforts to be material.
In addition, in the ordinary course of its product
development efforts, the company has designed its current
hardware and software offerings to be Year 2000 ready.
(However, the Year 2000 readiness of the company’s
customers and the hardware and software offerings from
the company’s suppliers, subcontractors and business
partners may vary.) The company is also aware of the
potential for claims against it and other companies for
damages from products and services that were not Year
2000 ready. The company believes that any such claims
against it will be without merit. While the company does
not believe that the Year 2000 matters discussed above will
have a material impact on its business, financial condition
or results of operations, it is uncertain whether or to what
extent the company may be affected by such matters.