In-Depth

September Inside IBM

• 09/01/1999

To help small and medium businesses realize the competitive advantages of adopting e-business solutions, IBM announced the availability of e-business Accelerator, an online consulting tool designed to help customers make business decisions about harnessing the Web for business advantage. Delivered by IBM Global Services via the Internet, IBM e-business Accelerator provides unbiased consulting advice and customized assessments.

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IBM’s second-quarter 1999 diluted earnings per common share of $1.28 compared with diluted earnings per common share of 75 cents in the second quarter of last year. Q2 1999 revenues grew 16 percent (16 percent at constant currency) to $21.9 billion.

Second-quarter 1999 net income totaled $2.4 billion, compared with $1.5 billion in the second quarter of 1998. These results include an after-tax benefit of approximately $700 million, or 37 cents per diluted common share, resulting from a number of actions that occurred during the quarter. Specifically, IBM closed the sale of the company’s Global Network in several key geographic areas.

The company also took certain actions intended to improve the long-term competitiveness of the company’s microelectronics and storage businesses. In addition, IBM implemented an accounting change to shorten the depreciable lives of personal computers used within the company to three years from five years.

Second-quarter revenues from the Americas totaled $10 billion, an increase of 16 percent (18 percent at constant currency) compared with the same period of last year.

Revenues from Europe/Middle East/Africa were $6.4 billion, up 14 percent (17 percent at constant currency). Asia-Pacific revenues grew 19 percent (9 percent at constant currency) to $3.6 billion. OEM revenues totaled $1.9 billion, a 21 percent increase (20 percent at constant currency) compared with the second quarter of 1998.

The company’s overall gross profit margin was 37.5 percent in the second quarter compared with 38 percent in the same period of 1998.

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On July 21, in just 17 minutes – the time it takes most people to balance their checkbooks – researchers from IBM set a world record by sorting one trillion bytes of data. In business terms, this would be the rough equivalent of listing, in numerical order, the tracking numbers for 10 billion overnight packages. Working at a rate of 15 numbers a minute, a person with pencil and paper would have to write non-stop for 13 centuries just to make a list of 10 billion tracking numbers, let alone put them in order.

IBM’s world record was set using the parallel processing capabilities of an IBM RS/6000 SP, the same computer server behind the "Deep Blue" chess match with Garry Kasparov in 1997. That’s about one-third the time of the previous record of 50 minutes set on November 10, 1998, by scientists at Sandia National Laboratories.

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IBM has added new products and enhancements to the SecureWay host integration family of products to help companies integrate host data into powerful e-business applications. With up to 80 percent of all business data residing on mainframes and other host systems, growing e-businesses need quick, easy and efficient ways to securely extend data to intranet, extranet and Internet users. The IBM SecureWay host integration solution – including SecureWay Host On-Demand Version 4, SecureWay Screen Customizer Version 1 and SecureWay Host Publisher Version 2 – helps companies quickly and easily bring new life to existing host applications and data with no additional programming.

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IBM announced a worldwide initiative to train and certify individuals in developing and selling e-business solutions. The initiative, which includes a new curriculum, certification program and satellite/Web-based learning alternatives, will be available through IBM PartnerWorld – a marketing and enablement program designed to create new revenue opportunities for IBM Business Partners.

"When we launched PartnerWorld, we promised to enhance our Business Partners’ ability to deliver true value to customers using IBM technology, software, services and solutions," says Buell Duncan, General Manager, IBM Global Business Partners. "Today’s enhancements are designed to deliver the skills, confidence and credentials that individuals and Business Partners need to transform their customers’ businesses into e-businesses."

The new offerings support the four tracks around which PartnerWorld was designed – personal systems, systems and services, software and developers.

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IBM introduced a semiconductor packaging technology that can increase reliability for servers and networking gear that make up the backbone of the Internet. This new chip package is designed to support the very high-frequency, high-bandwidth requirements being driven by the Internet and prevent outages. Semiconductor packaging encases the chip, connecting it to the other parts in an electronic product.

Developed for manufacturers of servers and networking gear, IBM’s high-performance chip carrier (HPCC) is designed to double the field life of similar existing chip packages, setting a new industry standard. In addition, its advanced performance allows the internal chips in equipment, such as routers, hubs and switches to transfer more and more data to the rest of the system – keeping pace with rising Web traffic and consumer demands.

The package is built around a unique flexible foundation that compensates for the expansion and contraction that takes place as the chip heats and cools during use. This works like expansion joints in a highway, preventing cracks and failures. IBM’s chip packaging breakthrough can extend the life of the entire system, such as a hub, a router or a server.