IBM 2008 Annual Report Download - page 6

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At IBM, we saw that these shifts would
reshape the economic, technological and
competitive landscape, and open up enormous
business opportunity. So we made some
important decisions, and we got to work.
 : We made major invest-
ments in our teams and capabilities in emerging
markets around the world. This is helping us
achieve superior growth in emerging markets
—
not only in the so-called BRIC countries of
Brazil, Russia, India and China, but in dozens of
countries across the developing world. At the
same time, we accelerated the global integration
of IBM’s operations. As a result, our supply
chain, research labs, software development and
service delivery today are truly global in scope.
We have made substantial progress toward
remaking IBM into a Globally Integrated
Enterprise, with more still to do.
: We transformed IBM’s mix
of products, services, skills and technologies
—
exiting commoditizing businesses like PCs
and hard disk drives, and making more than
100 strategic acquisitions this decade. We also
shifted our internal R&D. Of the more than
4,000 U.S. patents IBM received in 2008 (our
16th straight year of patent leadership), more
than 70 percent were for software and services.
IBM’s portfolio today is built around networked,
modularized and embedded technologies,
such as service-oriented architecture (SOA),
virtualization, business intelligence and
analytics. As a result, we are well positioned
to build the kinds of IT infrastructures and
solutions that will be of the highest value to
our clients.
: The kind of value our clients sought
required a partner with intimate knowledge
of their industry, and with the ability to turn that
knowledge into company-specic operational
and management systems. You can’t do that on
a global scale from corporate headquarters.
So we not only amassed considerable industry
expertise, but also made major changes in how
we deploy it. We shifted skills and decision-
making closer to the marketplace and the client.
At the same time, we transformed our vast
services delivery capability. We applied
automation, standardization and the kinds of
engineering and management principles that
were long ago adopted in manufacturing and
supply chains. The results are showing up in
our margins and in our best-in-class levels of
service delivery client satisfaction.
We Enter this Period Strong
Put it all together, IBM today is a very different
company, which is evident in our results.
Since the dot-com crash in 2002, we have more
than doubled our pre-tax income and free cash
ow, and more than tripled our earnings per
share. Our standout 2008 continued this record
of superior performance.
A LETTER FROM THE CHAIRMAN