IBM 1997 Annual Report Download - page 77

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75
notes to consolidated financial statements
International Business Machines Corporation
and Subsidiary Companies
Y Segment Information
IBM is in the business of providing customer solutions through the use of advanced information technologies. The company
operates primarily in the single industry segment that creates value by offering a variety of solutions that include,
either singularly or in some combination, services, software, systems, products, financing and technologies. The
schedule below shows revenue by classes of similar products or services. Financial information by geographic area
is summarized in note Z, “Geographic Areas,” on pages 76 and 77.
For purposes of classifying similar information technology products, general-purpose computer systems that operate
on a large class of applications are classified as servers when the systems are simultaneously used by multiple users
at one time, or as clients when the systems are used by one user at a time. Clients include personal computer and
RS/6000 products, general-purpose display-based terminals and monitors, and consumer and financial systems. Servers
include the System/390, AS/400, RS/6000 and personal computer server products. Storage consists of externally
attached direct access storage devices and tape storage devices. Other peripherals consists of advanced function
printers and telecommunication devices. OEM hardware consists primarily of revenue from the sale of HDD storage files
and semiconductors.
These hardware classes of products represent groupings that perform similar functions, as opposed to the complete
spectrum of products associated with IBM’s product divisions. Accordingly, they do not represent the full range of
any division’s offerings, which could include related peripherals, software and maintenance.
Services represents a full range of solutions in Network Services, which includes managed network operations and
services; Professional Services, consisting of systems management or outsourcing, systems integration design and
development, education and consulting; and Product Support Services, which consists of availability services for
operation support and business recovery systems. Software includes applications and systems software for both
host and distributed systems. Maintenance consists of separately billed charges for maintenance. Financing and
other is composed primarily of financing revenue and products and supplies not otherwise classified.
Some products logically fit in more than one class and are assigned to a specific class based on a variety of factors.
Over time, products tend to overlap, merge into or split from existing classes as a result of changing technologies,
market perceptions and/or customer use. For example, market demand may create requirements for technological
enhancements to permit a peripheral product to be functionally integrated with a display, a telecommunication device
and a processor to form a workstation. Such interchangeability and technological progress tend to make year-to-year
comparisons less valid than they would be in an industry less subject to rapid change.
Revenue by Classes of Similar Products or Services
Consolidated U.S. Only
(Dollars in millions) 1997 1996*1995*1997 1996*1995*
Information technology:
Clients** $13,915 $13,925 $12,677 $5,804 $5,519 $4,881
Servers** 11,868 12,421 12,597 4,535 4,365 4,464
Peripherals:
Storage** 2,725 2,779 3,306 1,131 1,036 1,121
Other peripherals** 2,126 2,304 2,085 781 860 764
OEM hardware 5,590 4,550 4,490 3,848 3,092 2,824
Services 19,302 15,873 12,714 7,980 6,129 4,606
Software 12,844 13,052 12,657 4,569 4,377 4,117
Maintenance 6,402 6,981 7,409 2,461 2,525 2,618
Financing and other 3,736 4,062 4,005 1,554 1,492 1,394
________________ ________________ ________________ ________________ ________________ ________________
Total $78,508 $75,947 $71,940 $32,663 $29,395 $26,789
**Reclassified to conform to 1997 presentation.
**Hardware only, includes applicable rental revenue, excludes functions not embedded, software and maintenance.