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6 2006 Annual Report
3. And we decided to become a globally integrated enterprise, in order to improve
IBM’s overall productivity and to participate in the world’s growth markets.
2006 Revenue
by Geographic Region
(Excludes OEM)
2006 Employee Population
by Geographic Region
2006 IBM Revenue Growth
(Excludes PCs)
Brazil ................................... 19%
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16%
India .................................... 38%
Russia .................................. 21%
Total.................................... 21%
EUROPE,
MIDDLE EAST
AND AFRICA ASIA PACIFIC
AMERICAS
35%20%
45%
37%
23%
40%
SERVICES
SYSTEMS
AND FINANCING
SOFTWARE
Generating Higher Value at IBM
Value was shifting in the IT industry, driven by a new
computing paradigm, new client needs and the rising tide
of globalization.
• Change in computing architecture was rippling across
the data center and the network, to a proliferation
of technology infused into all aspects of work and life.
• Companies were seeking to integrate advanced
technology with their business processes and operations,
not primarily to reduce costs, but to enable innovation
and growth.
• Enterprises and institutions were looking to tap into
skills and expertise available all over the world and to
integrate their operations globally.
1. Several years ago, we saw change coming.
We exited commoditizing businesses like PCs and hard
disk drives, and strengthened our position in areas like
service-oriented architecture (SOA), information on demand,
business process services and open, modular systems for
businesses of all sizes. This has changed our business mix
toward higher-value segments of the industry.
IBM operates in 170 countries, with about 65 percent of our employees
outside the U.S., including 30 percent in Asia Pacific. Our non-U.S. operations
generate about 60 percent of IBM’s revenue.
Over the next four years, IBM expects
the IT markets in Brazil, China, India
and Russia to grow revenue at more
than two times the worldwide rate,
creating a market opportunity
of more than $150 billion by 2010.
2. We remixed our businesses, to move to the emerging higher-value spaces.
2006 Segment Pretax
Income Mix
cyan mag yelo black
MAC
2718