IBM 2012 Annual Report Download - page 8

The era opening before us oers a historic opportunity
for both businesses and societies to pursue this higher
purpose. A vast new natural resource is being unleashed
—
promising to do for our century what steam, electricity
and fossil fuels did for the Industrial Age. The economic and
societal potential of this new gusher of data is incalculable.
It is the opportunity of our lifetime
— and IBMers are
determined to seize it.
It is in this spirit that I express my deep pride in the
worldwide IBM team for bringing us to where we are, and
my gratitude to you, our shareholders, for your unwavering
support. I hope you share our excitement about your
company’s performance and the way in which IBMers are
building a smarter planet and a brighter future.
Virginia M. Rometty
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
recommendations in exchange for their cars’ data on
braking, acceleration and location.
This list could go on. “Front-oce” transformation
has the potential to fuel the biggest wave of business
technology investment since the era of enterprise resource
planning (ERP). And that creates a powerful set of
conditions for the tens of thousands of business advisors
and industry experts embedded in the world’s greatest
engine of technical innovation.
In sum, our strong strategic positioning, solid balance
sheet, recurring revenue, robust profit streams, global reach
—
and especially our institutional capacity for innovation
and continuous transformation
— give us confidence that we
will continue to provide dierentiating value to our clients,
employees, partners and communities
— and therefore
to you, our owners. “Generating Higher Value at IBM”
(pp. 8–15) summarizes how.
On Being Essential
In closing, let me say a few words on the deeper meaning
of this model of continuous transformation to higher value,
at this particular moment in history.
As I have noted, an innovation model does not present
an easy path, especially in an industry as fast-changing
as ours. But once you are clear on your choice, it shapes
everything you do: your business strategy, how you recruit
talent, how you develop skills, how you invent, how you
run the company. And for IBM, it means something more.
It speaks to IBMers’ aspiration to be essential to each
of our vital constituencies
— our clients, our communities,
our partners, our investors, and one another. We see
this as our purpose as an enterprise
— to serve their plans
for success, their need to transform and their own unique
sense of purpose.
This letter includes selected references to certain non-GAAP financial measures that are made to
facilitate a comparative view of the company’s ongoing operational performance. For information
about the company’s financial results related to (i) operating pre-tax income, operating pre-tax income
margin and operating earnings per share and (ii) free cash flow, which are in each case non-GAAP
measures, see the company’s Forms 8-K dated January 22, 2013 and February 28, 2013 (Attachment
II—Non-GAAP Supplementary Materials).
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A Letter from the Chairman