IBM 2010 Annual Report Download - page 25

23
Management Discussion
International Business Machines Corporation and Subsidiary Companies
conditions quickly. With a services-oriented architecture (SOA),
businesses can more easily link together their fragmented data and
business processes to extract value from their existing technology.
Information Management Software. Enables clients to integrate,
manage and use their information to gain business value and
improve their outcomes. Solutions include advanced database
management, enterprise content management, information integra-
tion, data warehousing, business analytics and intelligence,
performance management and predictive analytics.
Tivoli Software. Helps clients manage their technology and busi-
ness assets by providing visibility, control and automation across
their organizations. With solutions for identity management,
data security, storage management and the ability to provide auto-
mation and provisioning of the datacenter, Tivoli helps build the
infrastructure needed to make the world’s systems—from trans-
portation to water, energy and telecommunications—run smarter.
Lotus Software. Enables businesses to connect people and
processes for more effective communication and increased pro-
ductivity through collaboration, messaging and social networking
software. By remaining at the forefront of collaboration tools, Lotus
helps organizations reap the benefits of social networking and
other Web 2.0 modalities.
Rational Software. Supports software development for both IT
and embedded system solutions with a suite of Application Lifecycle
Management products. Jazz, Rational’s technology platform,
transforms the way people work together to build software, making
software delivery more collaborative, productive and transparent.
Business Analytics. Enables clients to better analyze their data
and predict outcomes in order to make better business decisions.
Solutions include Cognos’ business intelligence software, which
provides comprehensive tools that range from querying to fore-
casting; as well as SPSS predictive analytics software that helps
clients predict outcomes and act on that insight.
Operating Systems. Software that manages the fundamental
processes that make computers run.
Systems and Technology provides clients with business solutions
requiring advanced computing power and storage capabilities.
Approximately half of Systems and Technology’s server and
storage sales transactions are through the company’s business
partners; with the balance direct to end-user clients. In addition,
Systems and Technology provides leading semiconductor tech-
nology, products and pack aging solutions to clients and for IBM’s
own advanced tech nology needs.
Systems and Technology Capabilities
Systems. A range of general purpose and integrated systems
designed and optimized for specific business, public and scientific
computing needs. These systems—System z, Power Systems and
System x—are typically the core technology in data centers that
provide required infrastructure for business and institutions. Also,
these systems form the foundation for IBM’s integrated offerings,
such as IBM Smart Business Storage Cloud, IBM Smart Analytics
Cloud, IBM Smart Analytics System and IBM CloudBurst. IBM
servers use both IBM and non-IBM microprocessor technology
and operating systems. All IBM servers run Linux, a key open-
source operating system.
Storage. Data storage products and solutions that allow clients to
retain and manage rapidly growing, complex volumes of digital
information. These solutions address critical client requirements
for information retention and archiving, data deduplication, avail-
ability and virtualization, and security and compliance. The port-
folio consists of a broad range of disk and tape storage systems
and software, including the ultra-scalable disk storage system XIV.
Retail Store Solutions. Point-of-sale retail systems (network
connected cash registers) as well as solutions which connect them
to other store systems.
Microelectronics. Semiconductor design and manufacturing pri-
marily for use in IBM systems and storage products as well as
delivering semiconductors and related services to external clients.
Global Financing facilitates clients’ acquisition of IBM systems,
software and services. Global Financing invests in financing assets,
leverages with debt and manages the associated risks with the
objective of generating consistently strong returns on equity. The
primary focus on the company’s offerings and clients mitigates
many of the risks normally associated with a financing company.
Global Financing has the benefit of both a deep knowledge of its
client base and a clear insight into the products and services that
are being financed. This combination allows Global Financing to
effectively manage two of the major risks (credit and residual value)
that are normally associated with financing.
Global Financing Capabilities
Client Financing. Lease and loan financing to end users and internal
clients for terms generally between two and seven years. Internal
financing is predominantly in support of Global Services’ long-term
client service contracts. Global Financing also factors a selected
portion of the company’s accounts receivable, primarily for cash
management purposes. All internal financing arrangements are at
arm’s-length rates and are based upon market conditions.
Commercial Financing. Short-term inventory and accounts receiv-
able financing to dealers and remarketers of IT products.
Remanufacturing and Remarketing. As equipment is returned at
the conclusion of a lease transaction, these assets are refurbished
and sold or leased to new or existing clients both externally and
internally. Exter nally remarketed equipment revenue represents sales
or leases to clients and resellers. Internally remarketed equipment
revenue primarily represents used equipment that is sold or leased
internally to Systems and Technology and Global Services. Systems
and Technology may also sell the equipment that it purchases
from Global Financing to external clients.