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IBM LEGAL VICTORY CRUSHES NEON'S JPRIME FEE-DODGING SOFTWARE
On May 31 IBM obtained a permament injunction barring Neon from selling its zPrime product, software that enabled many general-purpose mainframe jobs to run on specialty engines. Once moved, these jobs let users dodge software charges based on the use of general purpose computing capacity. The technical tricks were, as IBM seems to have shown, a violation of IBM's policies and practices and a breach of IBM's mainframe software licensing agreement. Game over.
The injunction appears to permit users of the jPrime product to continue running the code under the terms of their contracts with Neon. Neon appears to be obliged to do everything it can to unwind these deals short of defaulting on its obligations.
The personnel behind jPrime are specifically prohibited from using their knowhow to outfox IBM. They are also enjoined from sharing or making public their understanding of the IBM software that attempts to govern and meter workloads on IBM mainframes. Basically, IBM found a legal solution to the problems posed by jPrime but from the looks of things Big Blue could not come up with a technical remedy for the bill-beating technology.
IBM ANSWERS AND COUNTERSUES NEON, WHICH GOES RIGHT BACK AT 'EM
Name-calling about name-calling, that's the story in the Federal District Court for West Texas. Neon Enterprises and IBM are really going at each other, litigating away, all over a lousy few billion dollars. The few billion is what Neon could cost IBM if its zPrime software catches on, says a source at Neon, declining attribution.
zPrime lets mainframe shops move work around inside a mainframe so that it lives in the low rent district instead of on Park Avenue. With zPrime, IBM's zIIP and zAAP specialty processors can do a lot of work that customers without Neon's product (or Neon's know-how) otherwise would run on general-purpose engines. Customers can save a lot of money this way, apparently much more than IBM expected when it came up with the idea of zIIP and zAAP engines. Mainframe specialty processors are ordinary mainframe engines dressed in microcode mufti and unmetered; once a customer buys the engine, there is no extra cost for using it. By contrast, all the work done by general-purpose mainframe engines is measured and the amount clocked by IBM determines the price a customer pays for running the jobs.
Neon irritates IBM in two ways: One is obvious, as the zPrime package helps users cut costs, thereby reducing IBM's take. The other is that zPrime reduces IBM's account control. Together, the two annoyances brought Big Blue to a boil.
IBM had tried to put a lid on Neon by telling customers that zPrime broke some contractual rules. It asserted that anyone who used the package was cheating IBM and that in the end these users would end up with punishing bills. But Neon told prospects it was not doing anything wrong let alone illegal and said it would indemnify customers against IBM's threatened sanctions. Neon also took IBM to court on December 14, alleging Big Blue's disparaging remarks were so nasty that they violated the Lanham Act, which, among other things, gives owners of trademarks and brands remedies for obloquy. (This was a very creative bit of lawyering, say some observers.)
Neon updated its complaint on February 17, adding antitrust claims.
On January 17, six weeks after Neon's oriignal lawsuit was filed, IBM fired back. It answered Neon's complaint and launched a countersuit. IBM says zPrime gets IBM customers to illegally cheat Big Blue out of big bucks. And IBM didn't just speak up, it shouted, bringing in the awesome Evan Chesler, presiding partner of Cravath, Swaine & Moore, who will serve as counsel to the Houston firm Yetter, Warden & Coleman.
Neon's lead attorney, Chris Reynolds of Reynolds, Frizzell in Houston, didn't retreat. In fact, the following Monday, February 1, Reynolds was back in court with an answer to IBM's counterclaim and a document that contrasts Neon's legal position with that of IBM on a paragraph-by-paragraph basis.
Reynolds and a couple of his partners have gone against Cravath in the past, successfully. But law comes down to cases. There is no way to look at past events and forecast the outcome of a courtroom fight between teams led by two razor sharp litigators.
If there's any history to be examine, it is story of a product called Fast400, which let customers do with an IBM AS/400 something akin to what they can do on a mainframe with zPrime.
(In its February 1 response, Neon's legal team refers to a number of documents from the Fast400 case, and we have made them available here. The documents include Jim Stracka's Response to IBM's Supplemental Motion to Dismiss; Jim Stracka's Response to IBM's Motion for Leave to File Second Amended Answer, Defenses and Consideration Filed January 31, 2005; Response of Jim Stracka and Leif Svalgaard to IBM's Motion to Strike the Expert Report of David Nimmer; and James Stracka's Original Answer to International Business Machines Corporation's Second Amended Counterclaims. Another exhibit, Neon's comparison of IBM's counterclaims and its answer, is linked above but we repeat that link here.)
After a bit of legal adventurism that included getting the FBI to arrest Jim Stracka, the entrepreneur behind Fast400, on an extortion charge, IBM ultimately settled the matter. Basically, IBM paid to get rid of Fast400 and for the people behind the product to vow omerta. Once Fast400 was withdrawn from marketing, the extortion charge vanished like a fart on a breezy day. Mr. Stracka appears to be wealthy; today, his most visible activity is an indulgent venture in the world of golf. What happened to the users who had bought Fast400? They were all allowed to run the program forever on the machine where they installed it. They saved many times the $1,000 they paid for Fast400. And they lived happily ever after.
WHAT DOES IBM WANT CUSTOMERS TO DO? MAYBE SOMETHING LIKE THIS
Neon is trying to sell zPrime to mainframe customers as a way to reduce software bills. IBM is trying to prevent this. Customers are caught in the middle. If, as Neon contends, using zPrime is just a smart and perfectly legal way to cut software bills (even if that makes IBM unhappy), a VPDP who doesn't evaluate the product could be in trouble. Corporate management might want to know why that IT manager is wasting scarce corporate funds. On the other hand, if IBM prevails and gets to shut down Neon it could go after customers who got cute with zPrime, and that, too, could lead to awkward conversations between corporate computing managers and their company's bean-counters. Making matters even more difficult, IBM is not entirely sure it will win in court, so it's trying to change the rules under which it sells mainframe hardware and software to run on it. Mainframe shops trying to turn on a specialty engine are starting to see new documents that circumscribe their use of the equipment. At shops that already have zIIP or zAAP engines up and running, it may be too late, but IBM seems to have no problem pressing customers to sign new deals or amend their old arrangements . . . without offering any quid pro quo.
We asked IBM to provide contextual material that might make what they are asking customers to do easier to understand, if such material is available.
In the meantime, here is a letter IBM sent a user who ordered a specialty engine, according to a source who may have redacted the material to protect the recipient:
Thank you for your interest in IBM Specialty Engines. As you are aware, like any IBM Licensed Internal Code, this offering is subject to the IBM License Agreement for Machine Code (a copy of which may be found at http://www-947.ibm.com/systems/support/machine_warranties/machine_code.html).
As we have reason to be concerned you intend to utilize Specialty Engines to process unauthorized workload (workload beyond that for which the Specialty Engine was created and marketed by IBM), which would constitute a breach of the license, we will fulfill the specialty engines per your order only if you provide reasonable assurances you will comply with our agreements. Please confirm that you will operate these engines in compliance with your existing agreements with IBM, and specifically including that you will not run any workload on these specialty engines other than those workloads expressly designated by IBM as eligible and authorized to run on these processors.
For your convenience, the product announcement letters summarizing eligible workload may be found at: http://www-03.ibm.com/systems/z/advantages/zaap/index.html and http://www-03.ibm.com/systems/z/advantages/ziip/index.html.
Please acknowledge your assurance of compliance by executing and returning a copy of this letter to my attention. Thank you again for your interest.
IBM is also in some cases changing definitions in its product licenses, according to a party familiar with the situation:
Authorized Workload — the specific, limited workload (including without limitation programs, code, or machine readable instructions) that IBM has specifically authorized in writing (including in Announcement Letters) for execution on a particular type of Specialty Engine Capacity. For each type of Specialty Engine, the capacity to process all workloads other than Authorized Workloads is Unauthorized Built-in-Capacity.
Specialty Engine Capacity (including System z Application Assist Processors ("zAAP") and System z Integrated Information Processor ("zIIP")) — is a processor on or in conjunction with which IBM has restricted use to execute only Authorized Workloads and on or in conjunction with which IBM authorizes you to use IBM LIC to execute only Authorized Workloads. IBM designates Specialty Engines by feature code; (3) Unauthorized Built-in-Capacity — is Built in Capacity that is not authorized by IBM for access or use.
Last but not least, here is an intimidating paragraph from a menace letter sent to a mainframe customer. We hope this prose appeared in a document that included a balancing statement, such as an offer by IBM to compensate the customer for the unprovoked assault if it turns out that the shop's using zPrime to help reduce software costs was perfectly legal, as Neon claims.
If it is determined that at any time [Acme] was executing on Specialty Engine Capacity any workload other than Authorized Workload, the Actual Inventory Value will be recalculated using the charges for the MLC Programs installed on such Specialty Engine Capacity which are applicable to General Purpose Engine Capacity and [Acme] will be responsible for full payment of any additional amounts.
NEON SUES IBM ALLEGING ILLEGAL DISPARAGEMENT OF ZPRIME
Neon, the company behind zPrime, the software that helps users move legacy workloads to specialty engines and thereby reduce their metered software charges, has sued IBM in Federal Court. The case was filed in Austin, near Neon's home town, which is one of the cities served by the U.S. District Court for the Western District of Texas. The suit stems from allegations that IBM has falsely disparaged zPrime and misrepresented in a material and harmful way the software and maliciously disputed the legality of using it on IBM mainframes while knowing otherwise.
The key Federal law invoked by Neon is the Lanham Act. The Lanham act is part of U.S. trademark law, not antitrust law. It has been invoked in this matter because Lanham can bring a successful plaintiff substantial relief quickly and perhaps simply (compared to an antitrust suit, anyway). The law appears to fit the circumstances as described by Neon, although it is a safe bet that IBM will say Lanham has no applicability to this matter. Neon's Lanham hook has been sunk into the way IBM has disparaged zPrime and Neon in its effort to dissuade mainframe users from buying the product.
The Lanham act is named after a Texas Congressman, Fritz Lanham, who served (and got his law passed) during the Truman administration. The Lanham Act has been updated and amended during the more than six decades since its initial passage.
In recent years, IBM has been accused of antitrust violations by rivals such as Platform Solutions, which it bought and slaughtered, and T3, which is has not bought and not yet slaughtered. In its suit, Neon says IBM is probably violating antitrust law in the mainframe business, but Neon is not making any antitrust claims at this time. Neon views an antitrust suit against IBM as a morass. Instead, Neon is using its assertions about IBM's allegedly monopolistic practices to paint a dark picture of Big Blue's business practices. But that does not mean Neon's suit is confined to a Lanham claim. On the contrary: Neon has also invoked California's law against unfair competition and some related Texas law.
Neon is represented by the Houston firm Reynolds, Frizzell, Black, Doyle, Allen & Oldham.
Like Neon, IBM has already been talking up its side of the story in the business press, along the way conceding that zPrime really could save users a bunch of money. IBM told Bloomberg news that Neon's zPrime "is akin to a homeowner tampering with his electrical meter to save money." Neon would be unlikely to approve of the term tampering, but its complaint seems to say that IBM's practices are a bit like those of a utility company . . . if the utility company happens to be Gazprom.
PRESUMED HEIR TO IBM'S CEO HAULED OFF BY FEDS FOR INSIDER TRADING
IBM won't have Bob Moffat on deck to replace Sam Palmisano now that Moffat's been indicted for insider trading. The IBM executive has resigned, effective October 31, saying (with the help of his lawyers) that he had retired from the computer business and was going to make his defense a full-time occupation. The surrounding case that got most of the headlines is the one that killed off hedge fund Galleon and put its founder and boss, Raj Rajaratnam at the center of an insider trading scam.
It may yet turn out that Moffat will be able to avoid a criminal conviction if the prosecutors picked him up primarily to flip him and get him to rat out other defendants. If that is the case Moffat could end up naming parties who have not yet been indicted, even folks who also are connected with IBM.
IBM quickly filled the gap in its executive ranks by naming Rod Adkins senior veep for technology, meaning the boss of the hardware business. Adkins is amply qualified for what is one of the toughest jobs at IBM.
Adkins official IBM biography says:
Rod Adkins leads all of IBM's global server and storage systems hardware and software development. He also leads the microelectronics business which includes semiconductor process technology development and semiconductor manufacturing operations for microprocessors and application specific integrated circuits used by IBM and its OEM clients.
Mr. Adkins has held a number of product development, business operations and general management positions since joining IBM in 1981. He has experience in Printers, Personal Computers, Servers, Storage and Software. Mr. Adkins has served as General Manager for Desktop Systems in Personal Systems Group; for UNIX systems in Server Group; and for Pervasive Computing in Software Group.
As a member of IBM's Performance and Technology Teams and the Board of Governors for the IBM Academy of Technology, Mr. Adkins helps drive IBM's corporate and technical direction. He is a member of the National Academy of Engineering (NAE), Executive Leadership Council (ELC), and National Society of Black Engineers (NSBE). He is also a member of the board for the National Action Council for Minorities in Engineering (NACME), the Smithsonian Institution and Pitney Bowes, Inc.
Moffat was a powerhouse, as the following biography, no longer on the IBM website, indicates.
Robert W. Moffat, Jr. is senior vice president and group executive, IBM Systems and Technology Group. Named to this position in July 2008, Mr. Moffat is responsible for all IBM hardware offerings as well as the microelectronics division, which translates IBM research and development into semiconductor solutions for IBM systems and OEM clients. In addition, the company's integrated supply chain operations, which include global manufacturing, procurement and customer fulfillment, report to him.
Mr. Moffat was senior vice president, Integrated Operations. In this cross-functional role created in July 2005, he led an initiative to transform and integrate the company's supply chain and service delivery operations globally, leveraging new business process designs and advanced technology to achieve greater levels of efficiency while improving IBM's market responsiveness.
Prior to that, Mr. Moffat was senior vice president and group executive of IBM's Personal and Printing Systems Group, where he was responsible for worldwide sales, development, manufacturing and marketing of Personal Computers, Printing Systems and Retail Store Solutions. Before that, he was vice president, finance and planning for the Enterprise Systems Group.
Mr. Moffat has held a number of executive positions at IBM, including general manager of manufacturing, fulfillment and procurement initiatives for the PC business. He led the team that pioneered the Advanced Fulfillment Initiative, and channel collaboration initiatives, which were awarded the 1999 Franz Edelman Award, the highest recognition for achievement in operational research and management sciences, and supply chain management.
ZPRIME MAY ZAP IBM REVENUE AS IBM TRIES TO CUT NEON TO ZIP
IBM says its mainframe customers can save money by moving portions of their work from general purpose processors to specialty engines. Until recently, this helped some customers shave their software bills. But now there's a software company that claims it can do what IBM says is possible in a very big way. The company is called Neon Enterprise Software, based in Sugar Land, Texas, and its shape-shifting product is called zPrime.
Neon isn't making specific cost reduction claims, at least not publicly. But industry gossip suggests that it might be be possible for users to cut their software costs by a quarter to a half. We know of one respected mainframe expert who thinks zPrime could cut some customers' bills by more than 75 percent (although we remain skeptical). Whether the savings is one quarter or three, Neon's software could have a huge impact on IBM's mainframe software and hardware revenue. In addition, zPrime could radically reduce the cost of providing services. If IBM doesn't pass along potential hardware and software savings to its services customers others, such as HP or Dell, could clean IBM's clock wherever there is a competitive opportunity.
IBM has already come up with a scare letter to warn prospective users of zPrime that it won't take kindly to anyone who doesn't stick to the rules governing the use of IBM's Ziip and Zaap engines. Neon reportedly said it studied the rules (with the help of some smart lawyers) and that it's playing fair and square no matter what IBM says.
If recent history is any guide, IBM might try to crush Neon in the courts if it can't beat the company in the marketplace. But unlike Big Blue's other mainframe rivals, such as PSI, T3 and Fundamental Software, Neon is not a pissant. Quite the opposite. Neon's main backer is John Moores. Mr. Moores is a big player in technology and in professional sports. He is the boss of the San Diego Padres and has property overlooking the Pebble Beach golf course. He was the M in BMC, which he founded. But the most big leage fact about Moores is that he chairs the Carter Center, a job he took as President Jimmy Carter eases toward retirement.
Basically, John Moores seems like the kind of person who knows how to pick winners avoid losers. He is, at the moment, IBM's most daunting competitor. The only mitigating factor might be that Moores is above all else practical. If IBM buys Neon in order to kill it, as it did with PSI, the price could be pretty big but Moores is unlikely to say no. Moores just doesn't seem like the kind of person to hang onto the company out of pride and against all he has learned in business over the years.
Interested users must understand that there are limits to what zPrime can do. Neon's product doesn't work on all mainframes. It only works with current and recent z/OS on current or recent hardware. But it will work on mainframes that have tiny (and thus relatively inexpensive) general purpose engines along with Ziip and Zaap engines that always run at full speed. And for mainframe shops trying to trim their costs, the really crusty old legacy work they run on new engines can always be farmed out to services companies that run older and therefore cheaper mainframes that provide the kind of hardware a lot of that legacy stuff was written to work with in the first place.
We haven't heard the last from IBM on this matter of course. But it's safe to say that even now every mainframe shop that has taken a look a zPrime seems to be impressed. If these shops worry about IBM's revenge, that, took, is a tribute to John Moores' killer software, where the thing that could be killed is IBM's bottom line.
T3 PLANS TO APPEAL DISMISSAL OF SUIT AGAINST IBM
In early October a Federal court in Manhattan tossed out an antitrust suit against IBM that had been filed by T3 Technologies of Tampa. The suit was based mainly on tying claims. IBM blocks the use of its mainframe software on IBM-compatible systems that emulate Big Blue's big iron. T3 said this was crooked and also that it knocked the small company out of the business it had pursued selling low-end mainframe clones obtained from Platform Solutions, Inc. PSI had also battled IBM in the courts until IBM bought it. Once PSI had been eaten, T3 no longer had small mainframes to sell, and it felt it had to sue or sink.
The basis of the dismissal was a position taken by IBM that T3 was not a direct rival and thus had no standing to file antitrust charges. T3 doesn't agree and it is trying to appeal that ruling and get its case reinstated, in part because it was allowed to join the PSI action against IBM that ended after IBM bought out PSI.
IBM's takeover of PSI may have been based in part on a political calculation. IBM did not want to be the poster child for the Obama administration's new and possibly active Antitrust Division. And while the DoJ has asked T3 for copies of materials it had gathered during its legal effort, it's impossible to say whether that action is part of a serious effort to get IBM to loosen its grip on mainframe software, a dispassionate review of an issue the government feels obliged to study, or political theater lacking much in the way of sound and fury but sticking with Shakespeare when it comes to what it signifies.
T3 is still hoping for some relief from the EU competition authorities. Chances are good that the EU will be heard from before the year is out, according to a T3 executive who was willing to speculate about the matter. But like the DoJ, T3's posture may also be little more than theater.
Microsoft has put some money into T3, but Microsoft had also helped PSI and it's long since been clear just how far that effort got the wannabe mainframe maker.
IBM MAKES NEXT GENERATION z10 MAINFRAMES FROM POWER FAMILY CHIPS
IBM has decided to fold its mainframe processor chips into the Power family, much the way it moved its AS/400 engines into Power architecture years ago. IBM says the mainframe versions of the Power 6 or p6 chips, which it calls z10 when the result is a server not just a chip, will have some unique features.
It is very hard to predict the timing of an official announcement, but Big Blue has been conducting customer briefings since last August.
With mainframe sales in a sharp dip as the financial sector firms that buy so many putting all capital equipment acquisitions on hold, IBM may have to act more quickly and more decisively than it would under more propitious conditions.
IBM EATS PLATFORM SOLUTIONS, HALTS LICENSING OF FLEX-ES EMULATORS
IBM has taken steps to curtail two mainframe emulator systems.
IBM has halted licensing of key patents to Fundamental Software, blocking the use of IBM software on Fundamentals's Flex-ES mainframe emulators, effective November 1. The X86-based systems were popular among developers and end users; hundreds are in use. IBM's decision to halt future licensing will not directly impact the installed base, which will continue to enjoy the use of any software licensed under agreements in force at the time of installation.
IBM also has acquired Platform Solutions, which had launched a mainframe emulator that runs on Itanium platforms. Some details of the saga are available here.
Flex-ES boxes are mainly used by shops that require under 50 MIPS of processing power and include versions that run on laptops. IBM hopes to sell low end z10 mainframes to some of these small shops but it has no portable alternative for use by software developers and support personnel, a niche that was filled by products from resellers of Flex-ES.
RESELLER WHISPERS UP PLATFORM SOLUTIONS PCM MACHINE
T3 Technologies, which says it had been the top distributor of Flex-ES based emulated mainframes, tried fo sell a machine it called Liberty, based on software and firmware from Platform Solutions (see our related essay).
The story ended in tears, except that maybe the lawyers are not crying on their way to the bank.
T3 got some sympathy from the courts in Europe when it said IBM was taking unfair advantage of its market power. In the USA, regime change has not taken the stake out of the heart of antitrust. It does not seem likely that T3 will obtain relief or redress in its home country for what it views as anticompetitive behavior by IBM.
COMMON MEMORY AT WELL UNDER $40 PER GIGABYTE
Memory stick prices are very attractive, making it easy to equip PCs and servers with ample capacity to support the latest software. The popular DDR3 and DDR2 modules used in desktop PCs and their cousins used in laptops seem to be retailing for $30 to $40 per gigabyte; DDR2 is generally cheaper than DDR3. The only common memory (the kind used in PCs, laptops and the cheapest servers) that seems costly is the older stuff such as the first generation DDR sticks.
The affordability of newer types of memory means that it can be more costly to upgrade a computer that is more than three or four years old than to add memory to a recent or current machine. In effect the residual values of older PCs that formerly were often respectable are now usually quite low. The lively market for PCs and laptops that are more than 4 years old is in settings where the workload on the machine is minimal, either because the computer is mainly used for Internet activities or because any serious applications are designed to put very little strain on client systems. As soon as large numbers of multicore computers start coming off corporate leases the prices of single-core machines (even ones with hyperthreading) could go into decline.
Our bellwether memory dealer, McDonald and Associates, in Omaha, has been selling parts at market levels in small quantities and appears to be willing to talk about price to customers who are looking for sticks by the dozen.
The more sophisticated types of error correcting memory used in midrange servers can cost more than standard PC memory but still can be a lot cheaper on the open market than when it is purchased from a server vendor. Customers usually don't shop the third-party market for memory when a server is very new but instead look for bargains when they are trying to stretch the life of an older server by another year or two. More often than not, a little bit of shopping can yield a lot of savings.
IBM STUMBLES IN FIRST QUARTER, PROMISES TO RIGHT ITSELF
IBM's revenue and pre-tax profit declined year-to-tyear in the first quarter. Revenue fell 5 percent to $23.4 billion; pre-tax profit fell 6 percent to $3.6 billion. The company's top brass said the fall was in part due to the company's failure to close some big mainframe and software deals before the quarter ended, but that these deals would be completed early in the second quarter, helping IBM get back on track. Investors didn't buy this story and sent IBM stock down quite sharply in the wake of the disclosures.
IBM's hardware business was the most dramatically affected segment, tumbling more than 17 percent and leading to a loss of more than $400 million. Power hardware revenue was off 32 percent. Mainframe revenue rose 7 percent compared to a year earlier on MIPS growth of 27 percent, quite a bit of that from the sale of specialty processors. IBM didn't break out workload growth leading to sale of z/OS MIPS but it's a safe bet that figure was poor, possibly negative, because sales if specialty processors grew briskly.
Sales of X86 servers fell 9 percent and about the time IBM reported its results there were rumors across the financial press suggesting IBM was contemplating the sale of its X86 manufacturing operations along with related R&D facilities. The gossip suggested a deal would be struck with Lenovo and that the price to be paid would be in the vicinity of $5 billion. Commentators supportive of the possible sale say IBM has no way to do well in what has become something of a commodity server market. Critics note that the X86 server business as a whole is large, accounting for the bulk of unit shipments and the majority of revenue.
IBM's least bad segment was software, which reported revenue off 0.5 percent year-on-year (but down close to a third quarter-to-quarter). IBM comingles operating systems revenue with hardware revenue, so it is very difficult for outside analysts to properly model Big Blue's software business or to break it down by OS environment.
IBM does not report sales by end use meaning glass house versus cloud, and perhaps that's a good thing for the optimists. With cloud (including service bureau) sales taken out of the server and software pictures, conditions are dire.
The services segment continues to generate pretty steady revenue and profit for IBM, but even in these resilient areas Big Blue reported declines in revenue. Still, the company's leaders assert, the dip will be temporary and business will resume its growth later in the year.
The current quarter will include some spectacularly large staff reduction programs with associated costs estimated at roughly $1 billion. Most of the layoffs will be outside the USA; Europe seems likely to be one epicenter, southern India another.
IBM's new boss Ginni Rometty has gotten off to a trying start. But she didn't get to the top of IBM by being stupid. So it's a safe bet that she will want all the bloodbaths at the start of her tenure, after which she can try to steer her company back onto the road to growth. Lou Gerstner began his tenure with drastic staff reductions and then went on to earn great praise for his accomplishments. If Rometty studies the Gerstner playbook and translates it to reflect IBM's current situation, Bangalore might soon become the best place on Earth to buy a used Merc or Beemer.
IBM FIRST QUARTER 2013 PERFORMANCE BY SEGMENT
|Systems & Technology||3,106||120||3,226||-405||-12.5|
|Global Technology Services||9,605||248||9,852||1,585||16.1|
|Global Business Services||4,484||180||4,664||703||15.1|
|Total for All Segments||22,266||1,919||25,185||4,435||17.6|
The Eliminations/other line reflects an adjustment for activities that involve sales among IBM divisions that later yield sales to customers.
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