An impressive stock market track record…
IBM’s share price—unremarkable for much of the last decade—has surged, almost to the day, since the Smarter Planet shtick began. It hit an all-time high of $200 on Monday, March 5, up from $70 in late 2008.
But still ultimately about mainframes and professional services:
The answer to that is less sexy than IBM might have you believe. The company, with annual revenue of $107 billion, still makes tens of billions of dollars per year selling traditional data-center hardware and software. In fact, Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., estimates that about 20 percent of IBM’s revenue and 40 percent of its profits can be traced to hardware, software, services, and financing on mainframes, the grizzled veterans of corporate computing. Such machines are not analytics dynamos but rather workhorses crunching away at the most mundane tasks. The bulk of the rest of IBM’s business revolves around high-profit software and services, in which the company deploys tens of thousands of people to customers’ sites for what can be very lengthy technology installation and consulting engagements.