NEWS: IBM results 2006

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I had a look at the IBM results published here. Some quite interesting information about Big Blue.

Financial results 2006 (compared to 2005)

  • Total revenues: $91.4 bn (+0.3%)

  • Net income: $9.5 bn (+17.8%)

  • Revenues and gross margin per activities:

  • Services: $48.2 bn (52.7% of the revenues), gross margin 27.5%

  • Hardware: $22.5 bn (24.6% of the revenues), gross margin 37.0%

  • Software: $18.2 bn (19.9% of the revenues), gross margin 85.2%

  • Financial Services: $2.4 bn (2.6% of the revenues), gross margin 54.7%

  • Others: $0.1 bn (0.1% of the revenues), gross margin -13.2%

  • Available cash (end of 2006): $10.7 bn

  • 17 companies were bought by IBM during 2006, thereof 9 from the Software sector (eg: FileNet, MRO Software, Internet Security Systems, Webify Solutions, etc.)

    • Some comments

    • Stagnation of the revenues, compared to 2005 (+0.3%), but very clear improvement on the profit side (+17.8%)

    • Hewlett-Packard is now “bigger” (revenues) than IBM ($91.7bn for HP vs. 91.4bn for IBM)

    • IBM is now the second biggest Software company after Microsoft

    • IBM is now clearly a Services company, with 52.7% of the revenues generated in this area. It is also important to note that the Services sector has the lowest gross margin, which is quite strange. IBM decided to push this part of the company because of the expected profit situation there…

    • Based on the gross margin situation in 2006, IBM should intensify its acquisition strategy of Software companies in 2007. Cash is definitely here (more than $10bn)

    • IBM has further on a quite complicated positioning on the Software market, with, in about all segments where the company is present, its own commercial products, plus some Open Source solutions

    • IBM is still very active in the Open Source landscape (Linux, eclipse foundation). Some people are talking about investments above $1bn…

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