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IBM CEO: Signs Economy Has Flattened Out
 10/30/2002 NEW YORK (Reuters) - International Business Machines Corp. Chief Executive Sam Palmisano on Wednesday said he had seen some signs the economy had hit bottom or flattened out, but added that the tech sector has its own problems. "Even though we're faced with some very difficult short-term economic circumstances, they (customers) are ultimately optimistic about the long term," he told a meeting of about 300 IBM customers at the American Museum of Natural History. "In fact, as you travel around the world, you see some encouraging signs that perhaps we have hit the bottom, or things have flattened out." His remarks helped lift IBM stock. It rose $1.93, or 2.5 percent, to $78.67. Palmisano also said that "from an information technology perspective, our industry has problems that are, I think, somewhat unique unto itself beyond the pure issues associated with economy. "Clearly we are suffering from hyper-growth, over-investment and expansion of the dot-com bubble." He laid out a strategy to deal with that downturn, which includes an increased focus on more flexible computing and computing services that are built around freely available Linux software and industry standard technology. The Linux operating system has been gaining ground, in part due to a push by the computer services, hardware and software company to use it to run corporate computer systems. Palmisano said technology strategist Irving Wladawsky-Berger would head IBM's initiative to build on-demand computing -- or efforts to make pricing more flexible for businesses that have wide swings in their need for computing power. IBM has spent $10 billion to buy a new microchip plant, several integration software companies and PricewaterhouseCoopers consulting to move in the direction of flexible computing. Palmisano said such investments in a downturn were not risky. News Archive | |
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