Lou Gerstner, IBM's chief executive, dismissed the company's recent disappointing third-quarter results as a "hiccup" during a recent presentation to Wall Street analysts.
The audience was hoping that Gerstner would provide details of how the company intends to improve its business performance in the wake of the mere three per cent increase in sales during its most recent quarter. The turnover figure of $21.8bn was about $1bn less than analysts had predicted.
Gerstner's opening remarks paid no heed to investors' reported concerns that they are fed up with IBM's excuses for missing its targets.
However, Sam Palmisano, recently appointed chief operating officer, admitted that the firm is "disappointed" with the results. Palmisano isn't the only one. Traders and investors have given Big Blue a tough time of late.
During the presentation, Palmisano also confirmed that IBM would not be able to deliver its latest mainframe next month, the Z900, as had been previously announced. It is now expected to ship in 2001.
Gerstner used the occasion to offer his opinion on several subjects, and said that "there is no new economy". He said that while the internet is a new technology, it is really a "tool to fight age-old competitive battles", and that his company is a "good plumber, able to build and service the infrastructure of ecommerce".
He also took the opportunity to dismiss the attempts of some large capital technology firms to spin off their supply chains in initial public offerings as "dot alchemy". These moves were a failed attempt, in his opinion, to raise the companies' share prices out of thin air. Gerstner also claimed "the era of the dotcom is dot toast".
Both Palmisano and Gerstner projected that the turnover growth Wall Street analysts and investors want to see will come from the e-services sector.
They announced that Big Blue has hired and trained 9000 new employees this year in the services sector, and has re-trained an additional 10,000 current employees to operate in the services business.
Trying to bolster claims that there were better times ahead, both men focused on new service contracts signed with Asian firms, a business once thought to be the exclusive territory of other Asian suppliers.
Separately, IBM has announced that it will offer storage to customers on a capacity-on-demand basis. According to the company, the service will help reduce storage costs and deal with the fluctuating demands of ebusiness.
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