IBM 2000 Annual Report Download - page 8

page no.
six
chairman’s foreword
In that respect, computing infrastructure is rapidly
becoming like all the other kinds of infrastructure
we take for granted in the world — the telephone
system, the highways, the power grid.
This has been a long time coming. The main
obstacle has been a lack of standards in our industry.
Simply put, without standards, computing systems
cannot work with each other. And if your com-
puter can’t work with all the other computers in
the world, then you’re limited in how you can buy
and sell, trade stock, book a vacation, receive
health care and cast a vote over the Net. And in
the same way, your company is limited in how it
can work with its trading partners, its suppliers, its
customers — and you.
The Internet, of course, began to change all that
by bringing common standards to network connec-
tivity. Now, the astounding adoption of the Linux
operating system — and the broader Open Source
movement of which it is a part — are pushing stan-
dards over the top (which is why IBM has made
such a huge commitment to Linux). Standards are a
reality of our industry today. There’s no going back.
This is wonderful for customers and users of
computing. But for many technology companies,
it is an earthquake. No longer will the battle be
won or lost over computing technology controlled
by one company. Success going forward will
require open platforms, and tech companies that
rely on closed, proprietary technologies will dry
up. In fact, some of the players riding high today
may never, without major strategic adjustments,
see their current growth rates again.
Now, some people assert that standards-
based computing will commoditize information
technology. And certainly, many are asking: Where
will the value be? The profits? Who will set the
agenda? What will matter most to customers?
We ask ourselves these questions all the time. I
think we can now see clearly that competitive
advantage in the future will rest essentially on
three things: technological innovation, the ability
to help customers integrate technology with their
business, and the capability to make information
technology easy to acquire and manage.
Each of these capacities takes a long time to build,
and the barriers to entry are daunting. These are not
things you can simply buy your way into. Step back
from the array of all the things IBM is and does
today, and what you’ll see is a company strengthen-
ing its position in these three fundamental areas.
1. Technology Innovation. Make no mistake. A world
of standard computing technology increases, not
decreases, the value and competitive advantage of
innovation. And that requires real science. Not
just software developers, but also quantum
physicists. Not just storage specialists, but com-
putational biologists. Not just people who move
data, but people who move atoms
— one at a time.
We have all of that.
This ability to invent is IBM’s ace in the hole.
The scope and impact of what our researchers
have invented in just the past eight years — during
which they have continually set record after record
in patents — is remarkable. We are in the midst of a
Golden Age at IBM Research. Equally important
is how rapidly we’ve moved those innovations into
the marketplace. From silicon germanium to copper
chips, from silicon-on-insulator to WebSphere,
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value of services
contracts signed
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microelectronics
oem revenue
($ in billions)