IBM 2004 Annual Report Download - page 7

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05
chairman’s letter
Power Everywhere and Power.org initiatives. We are building
a broader ecosystem of innovation around Power, reflecting
the fact that innovation today is an increasingly collaborative
process—and not only in software.
And speaking of software, through steady internal
development and select acquisitions over the past several
years, IBM has become the leader in enterprise-class
middleware, which helps companies integrate and manage
their operations. An important differentiator for our
software business is that it is entirely built on open standards,
supporting a wide variety of hardware platforms and
applications. This gives our clients flexibility and choice,
and makes it easy for them to integrate their infrastructure
and business operations.
3. These two elements of on demand—new business models and
a new computing infrastructure— are now coming together in
ways that will redefine the industry and play to IBM’s strengths.
All of these changes — businesses we’ve exited, those we’ve
entered, our increased investments, the technologies
and practices we’ve invented— were undertaken not simply
to assemble a portfolio, even a portfolio of high-value busi-
nesses, but to do something with them. Namely, we aim to
give our clients capabilities they cannot get either from
another company or even a collection of other companies.
This is why we’ve worked hard to forge connections
between our services and software businesses, our semi-
conductor unit and our server and storage units, between
IBM Research and every other part of the company, and
between IBM and an increasing variety of business partners.
IBM’s strategy is less about going to market with a more
complete array of capabilities than it is about leveraging
those capabilities to create new intellectual capital for clients.
Priorities going forward
As we move ahead in 2005, we are guided by the same
priorities that have shaped our progress thus far.
we will make on demand business a fuller reality for clients.
The concept is no longer in dispute. Enterprises are achieving
tangible benefits from being on demand—and are increasingly
embracing its long-term strategic promise for competitive
advantage. We will work with a growing roster of clients who
want to become on demand enterprises, and we will
continue to build out the technologies and services for the
On Demand Operating Environment.
we will continue to deepen ibm’s capabilities as a company
built on innovation. This is our business model and has been
since the company’s inception. It has shaped our transforma-
tion over the past several years, and it continues to shape
the evolution of our workforce strategy, management systems,
economics and client relationships.
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cash available for
investment and distribution
to shareholders
earnings per share
(IN BILLIONS OF DOLLARS)
(IN DOLLARS, ASSUMING DILUTION
FROM CONTINUING OPERATIONS)