• Act Fast: Special Discount for IBM Alumni and Retirees for the Smarter Commerce Global Summit
• THINK Exhibit Opens in New York City

Act Fast: Special Discount for IBM Alumni and Retirees for the Smarter Commerce Global Summit

The Smarter Commerce Global Summit 2011 ( http://bit.ly/nCCmDM ) is being held from September 19-21 at the San Diego Marriott Marquis & Marina, and we have 100 discounted passes exclusively for IBM alumni who register (Note: Current IBM employees are not eligible.)

The discounted fee is $695.00, which is $600.00 off the standard price of $1295.00. That’s a whopping 46% discount! Click for details and to access the special promotional code:

https://www.ibmconnection.com/network/news/1829/

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THINK Exhibit Opens in New York City

Plan to be in New York City anytime soon? Don’t miss the new THINK Exhibit opening at Lincoln Center next month. As part of IBM’s yearlong Centennial celebration, the exhibit – an exploration into how the world works and how we can make it work better – will be open to the public September 23 – October 23.

This groundbreaking exhibit offers visitors three innovative experiences: the data wall, a striking, real-time visualization of New York’s systems projected continuously across the exhibit’s exterior; an immersive film that reveals patterns involved in making the world work better; and a self-guided interactive tour.

Located in Lincoln Center at the corner of Broadway and 65th Street, the exhibit is open to the public. Admission is free.

IBM Alumni and Retirees can register for a special reserved viewing of the exhibit beginning September 10. Although there is no admission fee, you must reserve your time slot. This special exhibit is sure to be popular – details and registration: https://www.ibmconnection.com/network/news/1821/

IMPORTANT: Once you have submitted your registration, you will receive a confirmation email. You must print this confirmation and bring it to the exhibit for admittance. For additional information about the exhibit: http://www.ibm.com/ibm100/us/en/thinkexhibit/visit/

Related posts:

1. Special PC Discount for IBM Alumni
2. Smarter Commerce is Here – Read (and Watch) All About It
3. The Greater IBM Connection Update: Serving Your Community Plus (3/31/11)

USE AN ON DEMAND COMMUNITY SOLUTION OR ACTIVITY KIT AND REQUEST A COMMUNITY GRANT! 

Have you volunteered with a non-profit organization or school this year? You may be eligible to receive one or two IBM Community Grants!! Community Grants provide cash or IBM products to eligible community organizations and schools where IBM employees and retirees are actively volunteering. This is your chance to support the non-profit or school that you care about!!

To begin, go to the IBM On Demand Community website and ‘sign in’. If you don’t have an IBM ID and Password, you will need to ‘register’ and create one. Once you sign in, you are ready to go.

This Centennial year there are enhanced grantoptions to receive even more cash for the non-profit or school where you volunteer! Use one of almost 200 On Demand Community Solutions or Activity Kits to leverage your volunteer time to the fullest and receive more cash or equipment for your non-profit. 

Ready to apply for a grant? It’s easy!

• Log your volunteer hours at the On Demand Community site by clicking ‘Track hours’ in the left-hand navigation area. This is a mandatory requirement for a grant.
• Determine which grant category fits your volunteerism (see Celebration of Service Grants). Be sure to review the eligibility details for the grant. The following grant categories and grant values are available to IBM employee and retiree volunteers this year:
  Award categories:
  • Individual (40+ hours)
  • Team (100 hours total with 3+people)
  • Team – 25 people (at least 13 IBM employees and/or retirees, no hour requirement)
  • Team – 50 people (at least 25 IBM employees and/or retirees, no hour requirement)

Award values:

• Individual without solution $500 cash (USD) or 1 IBM product (not including Young Explorer)
• Individual with solution $1000 cash (USD) or 2 products (maximum of 1 Young Explorer unit)
• 100 hours without solution $1000 cash (USD) or 1 product (may include Young Explorer)
• 100 hours with solution $1500 cash (USD) or 2 products (maximum of 1 Young Explorer unit)
• 25 people without solution $2000 cash (USD) or 3 products (maximum of 2 Young Explorer units)
• 25 people with solution $3000 cash (USD) or 4 products (maximum of 3 Young Explorer units)
• 50 people without solution $4000 cash (USD) or 4 products (maximum of 2 Young Explorer units)
• 50 people with solution $5000 cash (USD) or 5 products (maximum of 3 Young Explorer units)
• Apply for a Community Grant, under ‘How to apply.’ This can be foundat the bottom of the Community Grant page (https://www-01.ibm.com/ibm/ondemandcommunity/grants/communitygrant.wss)as a link directly to the application. You will need your IBM serial number when applying for a grant. The application should take less than 30 minutes to complete.Note:For each grant, you’ll need:
• 501(c)3 form from the non-profit (not required for a public school)
• Signed Affirmation of Compliance form
• For cash grants, a budget which meets or exceeds the dollar amount for which you are applyingIf you need assistance, please click on the ‘Contact us’ link in the left- hand navigator of the On Demand Community site to find your local grant administrator.*NOTE: During the Centennial year, IBM employees and retirees are eligible for one individual Community grant and one Team Community grant. Recipient organizations are eligible for only one Community grant.***DON’T MISS OUT!!!! Apply today! The grant program closes at the end of September!***

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1. Tom Trotter Recognized During IBM Centennial Celebrations
2. Texas IBMers are Community
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Getty Images

These are good days for International Business Machines (IBM: 171.48, 0.24, 0.14%). Big Blue celebrates its 100th birthday this year — a happy, if accidental, reminder of the zeroes and ones that populate the digital world it dominates. Earnings are rising nicely, as last week’s second-quarter results indicate, and its stock price is up 25% this year to a recent $185, triple the market’s gain.

It’s a story that IBM chief Sam Palmisano outlined last year in the company’s “Roadmap,” in which he described IBM’s plan to deliver double earnings of “at least” $20 a share in 2015, thanks to revenue expansion, cost savings and stock buybacks. The Armonk, N.Y.-based company is boosting sales growth to 3% to 5% a year, no small achievement for a company with $100 billion-plus in sales.

Growth looks set to continue, even if debt crises at home and across the Atlantic weigh on the global economy. In fact, IBM reckons it’s ahead of schedule on its road map, in large part because of its push into the developing world — the source of two thirds of its new customers. Among its big programs there: automating budgeting for Russia’s largest water supplier, and boosting transaction speeds at Mexico’s securities depository. In the past three years, revenue growth in emerging markets outpaced developed markets by eight to ten percentage points.

“The demand in the growth markets is driven by the build-out of IT infrastructures — so the opportunity is secular, not cyclical,” Mark Loughridge, IBM’s chief financial officer, told Barron’s in an e-mail. Indeed, IBM figures emerging markets will deliver 30% of revenue by 2015, up from around 20% last year. Profit margins are also higher than they are in developed markets, which makes for an explosive combination of revenue and profit growth.

“In Asia and Africa, it has less competition and better margins, says Dick Glasebrook, a portfolio manager at Neuberger Berman. Developed markets also continue to grow, as the company pushes deeper into its traditional stronghold, the enterprise market. In the most recent quarter, IBM posted strong growth in the U.S. and Canada — and Europe: Sales grew in the U.K., France and Spain, and the company returned to growth in Germany and Italy.

For the quarter, IBM’s revenue grew 12%, with strong help from the weak dollar; strip out currency gains, and revenue grew 5%. IBM boosted its earnings forecast for 2011 to $13.25 a share, up from its $13 January forecast. Last year, Big Blue earned a record $14.8 billion, or $11.52 a share.

One bright spot was hardware revenue, which rose 12%, after adjusting for currency gains. IBM’s updated System z mainframes proved particularly popular, with revenue jumping 61%. The company’s mainframes excel at managing large numbers of servers, and running high-speed, high-volume transactions. They’re tough to hack and can provide an audit trail. For that reason, banks and financial institutions love them. Servers also sold like hotcakes, as IBM won nearly $2.3 billion of business from rivals since 2009, including Hewlett-Packard (HPQ: 31.39, -1.22, -3.74%) and Oracle (ORCL: 27.47, -0.10, -0.36%).

Even tablet computing — which you might think is squarely in the consumer, not enterprise, arena — is an opportunity for Big Blue. Enterprises are adopting tablet computing, too, and IBM’s products help companies manage the data. “Clients are swimming in data in large part because of the growth in devices,” says Loughridge. Business analytics helps clients attack the data. Moreover, IBM supports devices by building secure corporate clouds that use its hardware and software.

To be sure, there are reasons for concern: Government spending is sagging; much of the growth in IBM’s service backlog was due to currency effects; and hardware faces tough comparisons beginning in the fourth quarter. Yet the long-term trend in services is strong, driven by increased globalization and multinationals wanting to implement best practices across the world. Key to that effort was IBM’s purchase of consultant PwC in 2002. Name recognition in services means some 60% of IBM’s business is now in long-term contracts.

When Barron’s took a long look at IBM in late ’09, we argued that the stock ought to trade at least at a market multiple. At that time, the shares were still below their July ’99 high, a level they didn’t exceed until last October. Last week, however, they fetched 15.4 times trailing earnings, up from 13.4 times at the start of the year — a slight premium to the 15 times of the S&P 500.

That has some investors scaling back. One portfolio manager, who numbers IBM among his largest positions, told Barron’s he’s in the process of cutting his stake in half, citing the “considerably more rich valuation” and “concern that rate of change in the dollar is unlikely to persist.”

Yet IBM is doing precisely what a blue-chip stock is supposed to do: providing steady earnings growth without any surprises. Daniel Flax, who follows the company for T. Rowe Price, calls the firm’s $20 earnings target for 2015 “conservative.” Put a relatively conservative multiple of 13.4 on that number, and the stock is worth $268. Nobody is saying it will get there in the next year, but Big Blue has shown that slow and steady wins the race.

Leslie P. Norton, Barron’s, July 26, 2011

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3. Africa is the Next Growth Frontier

Most people in the Western world walk around with a powerful computer in their pocket or purse, otherwise known as a smartphone. It’s not unusual to see someone clutching a legal pad-size gadget on airplane flights, such as an iPad, to read books. It’s nearly impossible to walk into a coffee shop without finding someone pecking away at a trim notebook computer, checking e-mail and surfing the Web.

One of the original marketing photos for the IBM 5150, the landmark personal computer that ushered in the PC revolution

The lineage of all those devices, in one way or another, flows directly back to a press conference some 30 years ago tomorrow. On August 12, 1981, IBM rented out a ballroom at the elegant Waldorf Astoria Hotel in New York and introduced its landmark 5150 personal computer.

Looking at the beige box today, nothing seems particularly remarkable. The rectangular CPU, with two black bays for floppy disks, isn’t a marvel of design brilliance. There’s nothing striking about the lines, the graphics, the color palette. The 5150 wasn’t even the first PC. Apple, Atari, and Commodore produced so-called microcomputers that preceded it. And IBM’s creation was inferior in some ways to those rivals.

But the 5150, more than any other computer before it, launched the PC revolution. It changed the way we work, the way we communicate, the way we entertain ourselves. That nondescript hunk of metal led to innovations that upended industries. More than any computing device before it, the 5150 changed our world.

The great revelation of the 5150, the reason it changed so much while earlier computers remained hobbyist gadgets, came in the way it was made. Nervous, particularly about the advance that the Apple II was making in computing, IBM raced to come up with an alternative. With time pressure, IBM chose to build its new machine from non-IBM components, a foreign concept for the insular company. That enabled the team to develop the product in 12 months, faster than any other product in IBM’s history at that time.

Making a computer with off-the-shelf parts unleashed the industry. IBM used Intel’s 8088 computer processor. For its operating system, IBM first turned to Digital Research Inc., hoping to license its CP/M. But, in a tale that has become legend in techdom, DRI hesitated and provided an opening for an upstart company, Microsoft, to offer an alternative operating system, PC-DOS, based in part on CP/M.

“You needed that spark of innovation that changed the paradigm,” said Paul Bloom, chief technology officer of telecommunications research at IBM. “It really expanded the market.”

IBM created the model that continues to pervade the PC industry. Relying on other companies to build parts for your technology was radical thinking at the time. Time pressure forced IBM into the strategy. But ultimately, it led to rapid innovation as niche component makers and software developers invested money and energy into improving their piece of the puzzle.

That turned IBM into a master assembler, a role that was easy for others to replicate. And that’s exactly what rivals did. Within two years, Compaq Computer produced the first IBM PC clone, using the identical architecture, something IBM made publicly available so that other companies could easily make compatible software and peripherals. Within just a few more years, the market was flooded with clones, securing spots at the heart of the computing industry for Intel and Microsoft and, somewhat ironically, ensuring a diminished role and sliding market share for IBM. 

The beginnings of the PC revolution (photos)

Later that decade, as the PC industry began to take shape, IBM recognized the importance of controlling the operating system. It developed OS/2, the next-generation operating system with Microsoft. At the same time, Microsoft was developing a rival operating system called Windows. The partnership fractured in 1990 and Microsoft’s Windows went on to dominate the PC operating system business. Those early IBM decisions–particularly opting for a third-party operating system and ultimately choosing Microsoft’s PC-DOS rather than DRI’s CP/M–ultimately played a huge role in shaping the computer industry today.

That first 5150–made up of a system unit, a keyboard, and a color graphics capability–cost $1,565. Consumers needed to shell out more money for options such as a display, a printer, diskette drives, and extra memory. The 5150 originally weighed 21 pounds without the diskette drives, 28 pounds with two of them. It contained 40 kilobytes of read-only memory and 16 kilobytes of user memory, before adding the diskette drives. Compare that, for example, to the new, sleek Samsung Series 9 Notebook, which weighs 2.88 pounds and comes with a 128-gigabyte hard drive and 4 gigabytes of system memory.

The 5150 was a roaring success, helped in no small part by some of the most iconic advertising of the day. IBM wanted to convey the idea that anyone could use its new computer. So it settled on ads featuring Charlie Chaplin’s tramp character, portrayed by mime Billy Scudder, as a lovable simpleton that could be coaxed into using the new machine.

It says much about how the computer industry has changed that IBM is no longer in the business of making PCs. The company sold its PC business to Chinese PC maker Lenovo for $1.75 billion in 2005. IBM recognized that the PC business was becoming increasingly commoditized, something it had started with the 5150. And it recognized that the once rapid growth of the market was a thing of the past.

“Just as we grow and mature, so does technology,” IBM’s Bloom said. “I don’t know that the PC is dead. But it’s certainly not growing the way other technology is growing.”

These days, much of technology’s growth comes from mobile devices. Smartphones and tablets, already far more powerful than the original 5150, are taking on functions that were once the domain of PCs, such tasks as e-mail, Web browsing, and even document creation and editing.

IBM is focused on even smaller computing devices, sensors, as the one of the next great paradigm shifters. Sensors are popping up everywhere, in appliances in people’s homes to devices they wear on their bodies to traffic signals in major cities. And they’re all collecting data and feeding that information to computer systems to analyze and act upon. IBM, whose great strength is collecting and analyzing data, is working to standardize the technology to make it more ubiquitous and more useful.

And yet, as all these other forms of computing emerge, the personal computer industry sparked by the 5150 rolls on, even if it won’t return to the growth rates of its early days. Ever-thinning notebooks, such as Sony’s new two-thirds-of-an-inch-wide Z series laptop, keep hitting the market. Google’s Chromebook, which automatically connects to the Internet and doesn’t require local storage, changes the notion of personal computing.

It all started at the Waldorf Astoria 30 years ago, August 12, 1981.

Jay Greene, 8/11/11, news.cnet.com

Read more: http://news.cnet.com/8301-1001_3-20090728-92/how-ibms-5150-pc-shaped-the-computer-industry/#ixzz1VL0zLWwY

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1. IBM to Help Clients Fight Cost & Complexity (N.Y. Times June 15, 2009)
2. Lessons in Longevity from IBM (N.Y. Times, June 18, 2011)
3. Business Market Plays Cloud Computing Catch-Up

If you’re interested in purchasing all types of items with an IBM logo, you can visit the following site to register and to browse selections:  http://www.ibmlogogear.com/

Thank you to Steve Salavarria for providing this link!

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AS it turned 100 last week, I.B.M. was looking remarkably spry. Consumer technologies get all the attention these days, but the company has quietly thrived by selling to corporations and governments. Profits are strong, its portfolio of products and services looks robust, and its shares are near a record high. I.B.M.’s stock-market value passed Google’s earlier this year. Not bad for a corporate centenarian.

Yet, not so long ago, I.B.M.’s corporate survival was at stake. In the early 1990s, it nearly ran out of money. Its mainframe business was reeling under pressure from the lower-cost technology of personal computing.

New leadership was brought in, and thousands of workers were laid off. It was part of the company’s painful journey to what might be called “post-monopoly prosperity” — that is, a new path to corporate success once a dominant product is no longer the turbocharged engine of growth and profit it once was.

“I.B.M. faced the challenge that all great companies do sooner or later — they dominate, they lose it, and then they re-create themselves or not,” observes George F. Colony, the chief executive of Forrester Research.

I.B.M. met the challenge, moved beyond the mainframe and built a business increasingly based on software and services. So as it celebrates a milestone, the company holds lessons for others.

Evolving beyond past success is a daunting task for companies in all industries. But that problem is magnified in the technology arena, where companies can quickly rise to rule a market, seemingly invincible, until a shift in the technological landscape opens the door to a new generation of corporate dynamos.

That is certainly the test that Microsoft is struggling with today, as it seeks growth beyond its lucrative stronghold in personal computer software. If they are to prosper for the long haul, Google and Apple, too, must reach beyond their dominant businesses. Each of these companies, in its way, is trying.

So, then, what broader insights are to be drawn from the I.B.M. experience?

One central message, according to industry experts, is this: Don’t walk away from your past. Build on it. The crucial building blocks, they say, are skills, technology and marketing assets that can be transferred or modified to pursue new opportunities. Those are a company’s core assets, they say, far more so than any particular product or service.

In I.B.M.’s case, the prime assets included strong, long-term customer relationships, deep scientific and research capabilities and an unmatched breadth of technical skills in hardware, software and services.

Though once a mainframe company, I.B.M. has recast itself as the supplier that can best manage and stitch together diverse technologies in modern data centers. Mainframes still have a role, and I.B.M. has invested heavily in them — $5 billion in mainframe research in the last decade — so that different kinds of software can run on them and new kinds of processors can plug into them.

But it is the technology surrounding the mainframe that really pays off for I.B.M. today. Mainframe hardware alone accounts for less than 4 percent of its revenue. But when the software, storage and services contracts linked to mainframe computers are included, the figure rises to 25 percent — and as much as 45 percent of operating profit, estimates A. M. Sacconaghi, an analyst at Sanford C. Bernstein & Company.

I.B.M. has redirected its research labs and sales force to focus on services and software, retraining thousands of people, and supplementing in-house programs with acquisitions. In big, complex services contracts, from running smart-grid projects for utilities to traffic-management systems for cities, I.B.M. acts as a high-tech general contractor whose expertise spans research, software, hardware and services. These so-called Smarter Planet projects build on its legacy of broad technical skills and deep knowledge in fields like energy, transportation and health care.

AT the moment, Microsoft is the tech company that most squarely confronts the post-monopoly predicament, as I.B.M. once did. Some of the similarities are striking, right down to the long-running federal antitrust suits that both companies endured.

But unlike I.B.M. in the early 1990s, Microsoft is not a company in crisis. It is growing steadily and remains immensely profitable. It has nurtured new businesses beyond its lucrative stronghold in personal computer software: the Windows operating system and its Office programs for word processing, spreadsheets and presentations.

Microsoft has invested for nearly two decades to build up business database software and server operating systems that run larger data-serving computers in data centers. An I.B.M. executive once declared that Microsoft’s attempt to move into data center computing would be its “Vietnam,” a humbling setback. And many analysts predicted that Microsoft would be thwarted in data centers by competition from Linux, the free operating system.

Linux has done well, but so has Microsoft. Today, Microsoft’s server software division is a comfortably profitable business, with $16 billion a year in revenue. If that unit were a separate company, it would be among the top five in the software industry.

Jo Yong-Hak/Reuters

A shopper with Apple products in Seoul. Apple is riding a wave of design success, but may eventually face the price pressure that I.B.M. did with mainframes in the 1990s.

Microsoft’s other sizable business beyond PC software — also more than a decade in the making — is its Xbox video-game console, software and online gaming franchise. That division of Microsoft is a solidly profitable, $8 billion-a-year business.

But the long-term problem for Microsoft is that more than 80 percent of its operating profit still comes from its PC software franchise. “Microsoft has delivered some singles and doubles, but is there going to be another home run?” asks David B. Yoffie, a professor at Harvard Business School.

Because of such concerns, Microsoft’s stock price has stagnated for years. The anxiety has been magnified by the company’s trailing position in fast-growing new markets in search and online advertising, as well as smartphone and tablet software. Some big investors are uneasy — and one, David Einhorn, the hedge fund manager, last month publicly called for Microsoft’s chief executive, Steven A. Ballmer, to be replaced.

Whether Microsoft can find a new foundation for prosperity is uncertain. But like I.B.M., it has deep reservoirs of technical and research expertise. Kinect, its add-on device to the Xbox gaming console, suggests one promising path. The device, which went on sale last November, recognizes people’s faces, their gestures and simple voice commands.

Microsoft acquired some of the sensor technology used in Kinect, but designed the hit $150 product itself, helped by seven different groups in its research labs. To date, Kinect is a gaming device. Yet personal computers that can see you, hear you and respond would be a breakthrough, bringing artificial intelligence into the mainstream.

GOOGLE, meanwhile, has the purest engineering culture among the major technology companies. Its founders, Larry Page and Sergey Brin, former Stanford graduate students in computer science, set the tone. And the assets most prized at the company are brains and data.

“Google is all about information — searching, discovering and sharing information more intelligently,” says Peter Sondergaard, senior vice president for research at Gartner.

In essence, Google sees itself as an artificial-intelligence factory. Its programmers use machine learning and natural language techniques to mine vast troves of Web data to deliver smarter search results and more finely directed ads. Its offerings beyond search all scoop up more data and afford potential opportunities for serving up more ads. They include online e-mail, calendars, maps, shopping, word processing and spreadsheets, as well as videos on its YouTube service and photographs on Picasa. It’s all grist for Google’s data mavens.

Google’s natural habitat is the wide-open Web. But it is also moving into the more closed realm of software for devices, mainly for smartphones and tablets, with its Android operating system. The move is partly defensive. More and more searches are being started from these mobile devices, and it is easier to steer users to Google search and other services from its own operating system. Yet the move could also put it in a powerful position to shape the future of mobile devices, which are eclipsing PCs as the center of gravity in computing. In smartphones, at least, Google is doing well. Android, which Google distributes free, has rapidly become the leader, with 36 percent of the market for smartphone operating systems.

IN recent years Apple has been unmatched in applying its core assets to new markets. Its hallmark skills are the intuitive usability of its software and the inspired design of its hardware — talents long appreciated by loyal Mac users. Yet in the PC industry, Apple machines are still dwarfed by those running Microsoft’s Windows. Apple’s stunning success has come in taking its skills beyond PCs with pioneering new designs in markets that it has redefined or created: digital media players (the iPod), smartphones (the iPhone) and tablet computers (the iPad).

Apple looks to be riding a money train for some time. Its current model is focused on selling its stylish devices; the company’s online software and marketplace (for digital media and mobile apps) are mainly servants of the hardware, pleasing consumers so they are more apt to buy iPods, iPhones and iPads.

Yet Apple’s product designs, however impressive, will eventually be mimicked and come under price pressure, just as the mainframe did, predicts Michael A. Cusumano, professor at the Sloan School of Management at the Massachusetts Institute of Technology. In time, he says, Apple may want to borrow a page from I.B.M. and rely increasingly on software and services for its livelihood.

Apple, he suggests, can build a large business around offerings like its new iCloud online storage and syncing service for music, photos and software, announced two weeks ago, applying Apple’s usability magic to woo users.

Once millions of people use a service, Mr. Cusumano says, there will be ample money-making opportunities with advertising, marketing or charges for premium services. Those can produce steady revenues, quarter after quarter, year after year. “Becoming a platform for delivering digital services is the way Apple can make big money in future decades,” Mr. Cusumano says.

FOR the powerhouse companies of today, the I.B.M. story holds a cautionary lesson as well: the danger of delay. Mr. Yoffie of Harvard Business School recalls that in 1990 he had finished a case study on I.B.M. His research included extensive interviews with the company’s top executives, who spoke of the need to wean I.B.M. from its dependence on mainframes and to shift toward software and services.

But I.B.M., he notes, didn’t pursue that strategy until after the company was in peril, and an outsider, Louis V. Gerstner Jr., was installed as its leader in 1993. As Mr. Yoffie says, “It’s really hard to move a company when it’s doing well and not facing a crisis.”

By STEVE LOHR, Published: June 18, 2011

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Ernest Johnson, who sends me a lot of wonderful IBM-related information, has been impressed, as are all of us, with the number of IBM retiree volunteers in Texas making significant contributions to their communities. He recently asked the On Demand Community team (specifically, Michael R. Cleveland) to summarize our efforts to date (2003-2010). Michael provided a report which is summarized below. Unfortunately, I was unable to import Ernest’s great bar chart to this post. 

For the years included, there were 290 unduplicated participants/reporters. Their total hours contributed ranged from 2 to 7,331 and totaled 211,649 hours; the average was 730 hours. Especially In this IBM centennial year, it’s even more important to share this information with our IBM North Texas community.

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On June 16, IBM (IBM) will mark its centennial. Five weeks later comes a birthday that could be more significant for Big Blue’s future: Chief Executive Officer Sam Palmisano turns 60, the age by which IBM CEOs have traditionally named their successors. Who Palmisano ultimately taps to lead the tech giant could go a long way toward determining how much IBM continues the cost-cutting that has marked its recent past or launches into a new era of growth.

On the surface, executive transition shouldn’t be traumatic for Big Blue. While Hewlett-Packard (HPQ) and Nokia (NOK) have recently had to look outside their ranks to recruit CEOs, IBM has several qualified internal candidates for the job. Sales chief Virginia “Ginni” Rometty and services head Mike Daniels, both senior vice-presidents, are considered the top contenders to follow Palmisano. (A third candidate, hardware chief Rodney C. Adkins, is considered a long shot by analysts.) “They’ve mastered the art of developing the next generation,” says Dennis Carey, vice-chairman at executive recruiter Korn/Ferry International (KFY), which has done work for IBM. “Now they have the problem of riches, as opposed to the problem of poverty.”

Rometty, 53, runs IBM’s sales operations and previously led services, which has become the company’s most important business. A 30-year IBM veteran, she caught Palmisano’s eye helping to integrate PricewaterhouseCoopers (PwC), a $3.9 billion acquisition that allowed the company to offer strategic advice. That, in turn, enabled IBM to forge closer ties to customers’ CEOs. If chosen, Rometty would be the company’s first female chief executive. She’d also make IBM the largest company with a woman at the helm, surpassing PepsiCo (PEP), headed by Indra Nooyi.

“I don’t think it’s a race,” says John Swainson, who spent 26 years at IBM and is now a senior adviser at Silver Lake Partners. “If they were going to choose someone now to be Sam’s replacement, she’d be the logical choice.” Swainson says overseeing sales is particularly significant. “That, historically at IBM, has been the big job before running the whole company,” he says. Palmisano took over sales when he was named president in 2000 and succeeded Louis Gerstner two years later.

After the PwC acquisition, Rometty helped retain its consultants by shielding them from some of IBM’s cost-cutting. When Palmisano wanted to trim travel budgets by making consultants stay at economy hotels like Holiday Inns, she helped them fight the move—and win—says Milestone Partners’ Ric Andersen, then a PwC consultant. “She knows how to interact with him,” he says. “Sam can crush people. He’s a very fiery, driven kind of guy. She knows there are times to take on battles and times to not.”

Daniels, 56, joined IBM straight out of college. His trajectory is similar to Rometty’s, with experience in sales and services, plus a key posting in Tokyo. He now runs all of services, where he’s responsible for about 60 percent of IBM’s total revenue. He’s known as an affable manager, with a less intense personality than Rometty or Palmisano. “He just gets business done, without a lot of fireworks,” says Frank Gens, an analyst at research firm IDC.

Daniels in recent years has made his mark as a cost-cutter, helping boost IBM’s margins. In 2005, when Palmisano split the services business into consulting and technology units, Daniels at first took over only the latter. He fired thousands of people and offshored jobs to lower-cost regions such as India to trim expenses and boost profits. The moves helped IBM thrive against rivals. Still, some workers resent his decisions. “We really feel like we’re treated like a number,” says Tom Midgley, president of Alliance@IBM, an employee group that’s tried to unionize IBM’s workers.

Who ends up succeeding Palmisano may well depend on what the board decides are the top priorities going forward. Palmisano steadily transformed IBM from the world’s largest computer maker into a services and software company. He sold off the PC business in 2005 and made $25 billion in acquisitions. That rendered the company reliably profitable but also a slow-growth operation. While rising earnings have pushed IBM’s stock to an all-time high, its sales growth over the past nine years has been only half that of HP and Oracle (ORCL).

Whether IBM’s board decides that faster growth is the priority for the second half of the decade (a financial strategy is already mapped out through 2015) or that a seasoned cost-cutter is needed to keep profits steady, directors aren’t eager to lose either Rometty or Daniels. The board has approved hefty incentive packages for both—as long as they stay put for another three years.

The bottom line: Palmisano’s choice of a successor will help determine whether IBM continues to focus on costs or tries to move in a new direction.

By Katie Hoffmann with Carol Hymowitz and Jeff Green. Hoffmann is a reporter for Bloomberg News.

Related posts:

1. Africa is the Next Growth Frontier
2. IBM eyes stimulus funds for broadband over power lines (from reuters.com)
3. IBM’s 4Q Beats the Street (2011 Bright)

We are just a week away from celebrating IBM’s official 100th anniversary. There are many exciting things scheduled for the actual anniversary date of June 16, so be sure to visit the community site at www.greateribm.com (and w3 if you are an IBM employee) so you don’t miss a thing.

And the celebrating doesn’t end next week. Many more activities are planned throughout 2011, and we hope you’ll continue to get involved where you can to celebrate your IBM heritage and what it means to be an IBMer. Submit a Member News item ( http://bit.ly/iGA3yt ) or post an item in a discussion forum ( http://bit.ly/kfZdjY ) to share your own story.

Join IBM’s virtual Centennial celebration, June 22

The following week, you are cordially invited to attend IBM’s Virtual Centennial Event June 22, a showcase highlighting IBM’s first century of achievement and innovation. At the event, you’ll have the chance to:

- Explore IBM’s rich history of innovation
- Watch a Webcast followed by live Q&A with the authors of “Making the World Work Better“
- Test yourself against Watson in Jeopardy!
- Network with IBMers, alumni, retirees, business partners and clients
- Test your IBM knowledge and win Centennial-themed merchandise
- Enjoy additional activities

Attendance for the Webcast is limited; click on one of the following links to register for the session of your choice.

Select the 12 noon Eastern session by registering here: http://events.unisfair.com/rt/ibm~100

Or select 3 PM Eastern/12 PM Pacific here: http://events.unisfair.com/rt/ibm~centennial

Order the Centennial Book: “Making the World Work Better”

This special Centennial book takes an in-depth look at three dimensions of IBM’s impact on technology, on business and on the modern world. Pre-orders are now available. Preview the book at: http://www.ibm.com/ibm100/us/en/book/ and be sure to attend the virtual event with the book’s authors June 22.

Pre-orders are available now from your favorite booksellers, including Amazon and Barnes & Noble. You can save 40% off the list price and receive free ground shipping in the US at ibmpressbooks.com. During the online checkout process, use coupon code IBMALUM (in all capital letters). Note: this coupon code applies only to US purchases from ibmpressbooks.com.

Celebration of Service – it’s time to pledge!

Since January, more than two million hours of community service have been pledged at the IBM100 Celebration of Service Web site, and we extend our thanks to the Greater IBMers who have contributed to that astounding number. June 16 is designated as a Day of Service at IBM, with IBMers around the world taking part in service activities. It’s not too late to make your pledge and share the opportunity with friends and family.

Read stories of service at the Centennial site ( http://www.ibm.com/ibm100/us/en/service/ ) and at www.greateribm.com. See photos from around the world or upload your own ( http://bit.ly/kYKzoq ).

Connect with a current IBM employee or retiree to apply for a Centennial grant. Take some time to make a personal difference in your local community as a commemoration of the IBM Centennial. Together, we can help to make the world work better.

Centennial Lecture Series: Sam Palmisano in Beijing, China
On May 10, IBM Chairman, President and CEO Sam Palmisano visited Beijing’s prestigious Tsinghua University, also celebrating its centennial this year, to deliver a Centennial lecture called “A Business and Its Ideas: Shaping a Company and a Century.” The event marked an important stop for IBM’s Centennial Lecture Series and an enormous milestone for both organizations. More: http://ibm.co/lLCKjS

Own a piece of IBM memorabilia

Help celebrate IBM’s long legacy with special company memorabilia. Lots of great items to choose from! Shop here: http://bit.ly/gwkwzv

Related posts:

1. IBM Centennial Spotlight Issue from The Greater IBM Connection
2. IBM is 100! New Centennial Site Launched
3. On Demand Web Lectures from The Greater IBM Connection

I.B.M. researchers said Thursday that they had designed high-speed circuits from graphene, an ultra-thin material that has a host of promising applications, from high-bandwidth communication to a new generation of low-cost smartphone and television displays.

I.B.M. An image of a completed integrated circuit made from graphene, with detail at top.

Related posts:

1. IBM Joins Pursuit of $1,000 Personal Genome (from The N.Y. Times)
2. IBM to Help Clients Fight Cost & Complexity (N.Y. Times June 15, 2009)
3. Lessons in Longevity from IBM (N.Y. Times, June 18, 2011)