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Author: pmccrudden One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 9251  
Subject: A few reasons to own IBM (long) Date: 2/10/2000 4:30 PM
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Some of the items on this list are dated, but I still thought they were interesting.

IBM is the world's largest information technology company, as well as the world's largest
hardware company ($37B); IT Services ($32.2B) and IT rental and financing ($3.1B) company.
(1/00)

-- 307,401 employees (1/00)
(64,278 Sales & Distribution; 138,055 Global Services; 16,539 Server;
Technology Group 43,113; Personal Systems 9,816; 23,506 Software;
12,094 Corporate/Other-Research, Real Estate, Procurement, HR, Credit Corp., etc.)
-- Corporate headquarters, Armonk, N.Y.
-- Business operations in 164 countries (1/00)

o For fifth straight year, we reported record revenue -- $87.5B in 1999, up 7% over 1998 revenues of $81.7B.

o Our net income for 1999 rose to $7.7B or $4.12 per diluted common share compared with net income of $6.3B, or
$3.29 per diluted common share in 1998.

o IBM finished 1999 with $5.8B in cash, after spending $7.3B on common share repurchases, acquisitions of $1.4B
and debt reduction of $1B.

o IBM has repurchased $32B of its common stock since 1/95. (as of 1/19/00)

o IBM's OEM (original equipment manufacturer) market (selling IBM technology to third parties) has, over the past
several years, has grown from practically nothing to $7.8B in sales, a 15% increase in FY99. (1/00)

o Services, middleware and OEM technology now represent nearly 50% of IBM's revenue, an increase of three
percentage points over 1998. (JJ - 1/00)

o During 1999, IBM made 17 acquisitions. (JJ - 1/00)

o In 1998, IBM's share price rose 76%. We set a new record in earnings per share of $6.57 -- assuming dilution.
In the beginning of 1999 IBM's Board approved its second stock split in two years.

o IBM's market value grew $69 billion in 1998. It has grown by $146 billion since restructuring in 1993. (3/99)

o In Forbes Super 100 (based on a compilation of the companies' scores on each of the four Forbes 100
lists of sales, profits, assets and market value) IBM ranks fifth in the Super 100, sixth in sales, fifth in net profits,
33rd in assets and 11th in market value. (4/19/99)

o IBM ranks third in profits at $6.3B (behind GE and Exxon) and third in market value at $214.81B (behind Microsoft
and GE) -- up from 13th in market value in '98, according to The Business Week Global 1000. (7/99)

o In Fortune Magazine's Global 500 listing the world's largest corporations, IBM ranks 14th overall, 6th in profits,
and first in the category of computers and office equipment. (8/99)

o Dow Jones Indexes show IBM is the world's third-largest public company (behind GE & Microsoft),
ranked by market value as of June 30, 1999. Up from 15th-largest in 1998, IBM market value was assessed at
$233,825B.

o IndustryWeek Magazine named IBM the world's eighth-best managed company in its fourth annual list
of the world's "100 Best-Managed Companies." (8/16/99)

SERVER

o According to International Data Corporation (IDC), IBM is the #1 worldwide server vendor with 23%
market share (measured by revenue). (1/00)

o At least 1 IBM server is installed in 95% of the companies listed in Dun & Bradstreet
1,000 key business. (3/98)

o S/390 Parallel Sysplex clustering technology has the industry's highest availability rate --
up to 99.999 percent, which equates to only 5 minutes of downtime per year. Eight out of
every 10 enterprise servers (mainframes) are sold by IBM. The mean time between
critical failures for S/390 servers is 20 to 30 years. (3/98)

o About 70% of the world's business data and business transactions are managed by
IBM servers. (1/00)

o The S/390 G6 Server, announced in May '99, just nine months after the G5, offered customers up to 50 percent more
processing capacity -- 1,644 MIPS, again leading the industry in enterprise server performance. (1999)

o More than 1,000 customers are actively using Java on S/390. New e-business applications on S/390
grew 195% in 1999. (1/00)

o AS/400 is the world's most popular multi-user, commercial business computer with more
than 700,000 systems installed in over 150 countries. (1/00)

o In October 1999, AS/400 was awarded VARBusiness Magazine's "most valuable player"
award for midrange servers in the Magazine's "Annual Report Card." IBM beat HP, Sun and SGI
in a poll of 3,800 value-added resellers, receiving the highest single rating for product quality.

o AS/400 is a key business system in 95% of the Fortune 100 industrial companies and
85% of the Fortune 500 and second-tier companies. There are about 30,000 applications written for
the AS/400. (1/00)

o AS/400 boasts 99.94% availability, second best in the industry behind S/390. 43 times more available than NT and
4.5 times more available than UNIX. (10/98 Gartner Group)

o AS/400 has the lowest cost of ownership (hardware, software, staffing, maintenance, repair) in the industry --
60% better than NT and 40% better than UNIX. (11/98 IDC)

o AS/400 received Computerworld's First IT Leader's Choice Award in 1998.

o The RS/6000 Model S80 is the world's fastest Web server. It is technically superior and cost
competitive. Since the first availability of the new S80 four months ago, IBM has shipped over 700
systems leading to double-digit growth for this enterprise server segment. (JJ - 1/00)

o The RS/6000 ranked first in a D.H. Brown composite benchmark study of server performance. (JJ - 1/00)

o In the largest commitment to Linux by any server company, IBM announced it will enable Linux operating-system
software on RS/6000, AS/400, S/390 and Netfinity. (1/00)

o When the Department of Energy needed a watchdog for the nation's nuclear stockpile
in February 1998, they selected IBM. The world's fastest supercomputer, an IBM
RS/6000 SP, will be capable of 10 trillion calculations per second by the year 2000,
calculating in one second what would take 10 million years with a handheld calculator.
When complete, the $85 million computer -- known as ASCI White -- will contain more than
8,000 individual processors across 512 nodes, providing the DOE with an eight-fold increase
in simulation detail. (3/98)

o According to IDC, IBM's NT-based server sales are growing over 60% annually. (1/00)

o Netfinity won 10 out of the last 11 magazine round-up reviews in 1999 for performance, reliability,
scalability and speed. (1/00)

o Netfinity Intel-based servers lead the industry in inter-operability with other server platforms including
RS/6000, S/390 and AS/400. (1/00)

o IBM was the first top vendor to introduce the world's thinnest Intel-based ISP server into the industry --
the 1.75"-thick Netfinity 4000R. (1/00)

o Netfinity servers offer a 99.99% uptime guarantee. (1/00)

e-BUSINESS

o In 1999, IBM did $14.6B in e-commerce, compared to $3.2B for 1998. The majority of this revenue was driven
through our work with Business Partners, followed by OEM partners, large customer extranets and consumers &
small businesses. Average revenue per day was about $40 million in '99. Personal Systems Group products
represented 55% of all e-commerce transactions in 1999. Other major brand transactions include Storage 11%,
AS/400 9% and RS/6000 7%. (1/00)

o e-business revenue grew 24% in 1999. (JJ - 1/00)

o IBM Business Partners can purchase more than 1,800 products on the Web. IBM has more than
45,000 Business Partners around the world. ('99)

SOFTWARE

o IBM had 1999 software revenue of $12.7B, up 7% (8% at constant currency).
Microsoft reported FY99 revenue of $19.75B (year-end June '99).

o Lotus Notes is the industry leader with nearly 56 million users worldwide. (1/00)

o Editors of Networking Solutions Magazine chose TME 10 (Tivoli Management Environment)
Product of the Year (1998) in its Management Platform category, beating out competitive
offerings from Computer Associates, Hewlett Packard, Novell, Sun Microsystems,
and Cabletron Systems. Editors chose TME 10 because of it's innovation, ease-of-use and
benefit to a customer's IT infrastructure. (3/98) In 4Q99 Tivoli grew two times the industry
rate of 15%. (JJ - 1/00)

o About 70% of all the corporate data in the world is managed by IBM software,
residing on IBM servers, the majority of which is on S/390 servers. (3/98) IBM is the number
one database company in the world, according to Dataquest. (1/00)

o IBM database products are used by 100% of the Fortune 100 and 80% of the Fortune
500 companies. (3/98)

-- 16 of the 20 largest transportation companies
-- 15 of the 20 largest utilities
-- 15 of the 20 largest life insurers
-- 6 of the world's 10 largest banks

o Middleware, which is three-quarters of IBM's software revenue, grew 13% at constant currency in 1999. Websphere
revenue more than doubled. We have 7000 MQ series customers including two-thirds of the Fortune 500
companies.

o More than 40 million users and 225,000 companies rely on IBM data management solutions. The world's
largest-known commercial databases sit on DB2. There are more than 1 million DB2 licenses.
DB2 Universal Database has been adopted by more than 3 million users worldwide. (10/99)

o DB2 on UNIX and NT grew more than four times the industry rate of 17% in 1999, and four times faster than
Oracle's latest results. Both Siebel Systems and S-A-P announced they would make DB2 their platform of
choice replacing Oracle. (JJ - 1/00)

o According to Dataquest, IBM is the worldwide market share leader in the database industry. (1/00)

o IBM DB2 Digital Library sits at the heart of some of the world's largest media collections including the
Dutch National Library, the National Palace Museum in Taiwan, the Vatican Library and the State
Hermitage Museum in St. Petersburg, Russia. (5/99)

o IBM's Intellectual Property Network web database, powered by DB2, contains 1.5 terabytes of
compressed data, including U.S. patents from 1971 and images from 1974 forward. IBM currently holds
more than 210 database patents -- more than any other vendor in the industry. (3/99)

o IBM Transaction Processing software is used by 17 of the top 25 stock brokerage firms in the world.
About half of all web-based stock trading is done with our Transaction Systems products. Some CICS brokerage
customers are executing up to 20 million transactions per day at 10,000 transactions per second.
Transaction Processing revenue grew faster than the industry in 4Q99. (1/00)

o IBM's CICS (Customer Information Control System) processes more than 30 billion transactions
per day. CICS has 14,000 customers around the world, representing more than 40,000 licenses.
CICS processes more than $100B in transactions per week. More than 30 million people use CICS
which can handle more than 300,000 concurrent users.

o We have more than 20 locations in 13 countries with more than 4,000 professionals
working on Java technology, including services and products to help customers
Java-enable their businesses. (1/00)

GLOBAL SERVICES

o IBM is the world's largest IT services company. It has grown in just nine years from a $4B to a $32.2B
business, an increase in FY99 of 11% over FY98. (1/00)

o IBM Services hired more than 20,000 professionals in 1999. IBM Services hired 18,000 people in 1998
and 15,000 employees in each of 1997 and 1996. IBM signed more than $38B in new contracts in FY99 (46 valued
at more than $100 million) concluding with a backlog of $60B. (1/00)

o In 1999 revenue from web hosting approximately doubled; e-business infrastructure services doubled;
revenue from supply chain and e-procurement services tripled -- discrete e-business services in total grew
60% in 1999 to $3B. (JJ - 1/00)

PERSONAL SYSTEMS GROUP

o Personal Systems Group products represented 55% of all e-commerce transactions in 1999.

o In 1999, ThinkPad revenues grew faster than the industry. Netfinity revenue grew double digits. (JJ - 1/00)

TECHNOLOGY

o IBM Storage has pioneered every significant development since it invented magnetic disk
storage four decades ago. (1/00)

o IBM was first to ship hard drives with magnetoresistive (MR) and giant magnetoresistive heads in
the '90's, making hard drives faster, more reliable and higher capacity. (1/00)

o In 1999, IBM introduced the world's highest-capacity hard drives for notebooks, desktop PC's and
server systems. IBM holds the record for highest-capacity notebook PC hard drives at
25-gigabytes. (1/00)

o IBM holds 40% market share in notebook PC hard drives. (1/00)

o In 1999, IBM shipped the world's smallest and lightest hard disk drive -- the 340
MB, .7-ounce Microdrive. It holds 1,000 photographs or 300 novels. (1/00)

o IBM signed agreements worth $30B over 5 - 7 years to provide components and technology to Dell,
Cisco, EMC, Acer, and Nintendo during 1999. In FY99, OEM revenues increased 15% (14% at
constant currency) to $7.8B.

o Half the Global Fortune 100 have ordered SHARK, IBM's new open-systems disk storage subsystem. 1200
SHARKS have already been shipped. (JJ - 1/00)

o In January 1999, the IBM S/390 CMOS Cryptographic Coprocessor chip was
certified at FIPS 140-1 Level 4, the highest certification for commercial security
awarded by the U.S. Government. It is only the second security product ever
to be awarded this certification -- the first being the IBM 4758 PCI Cryptographic
Coprocessor card, awarded last December. (1/99)

o IBM's semiconductor business was the driver behind OEM revenue growth in 1999. Custom Logic
grew more than 75% as we focused on the communications industry. (JJ - 1/00)

o IBM Microelectronics is an industry leader in innovating manufacturing process technology.
In 1998, IBM was the largest supplier of custom chips in North America and the second largest
in the world. (1/00)

o IBM's August 1998 breakthrough in perfecting the Silicon-on-Insulator process enhanced
chip speed by up to 35% and reduced power requirements by up to 66%. (1/00)

o In 1997, IBM introduced a breakthrough in semiconductor technology with the
development of smaller, faster, more powerful and less costly integrated circuits using
copper "wiring" in place of aluminum -- a groundbreaking technological advance that
had eluded chip manufacturers for decades. IBM shipped its one millionth copper chip
in September 1999, less than one year after becoming the industry's first copper chip
supplier (9/98). IBM shipped its two millionth copper chip in January 2000. (1/00)

o In October, 1998, IBM became the first company to introduce silicon germanium chip-making
technology into mainstream manufacturing, offering the first SiGe-based standard products
for use in wireless communications products such as cell phones and pagers. SiGe chips provide
high performance and less power consumption with lower cost, helping to usher in new breeds
of "network appliance" devices for personal communication. (1/00)

o 2/99, IBM announced its ability to combine both memory and logic functions on a single computer
chip, enabling the production of smaller, cheaper, more powerful electronics products. Embedded
DRAM "system-on-a-chip" semiconductors advance the race toward miniaturization and pervasive
computing. (1/00)

RESEARCH/INTELLECTUAL PROPERTY

o IBM Research is the world's largest information technology research organization, with more than 3,000
scientists and engineers at eight labs in six countries. (Locations include New York, San Jose, Austin, Zurich, Haifa,
Tokyo, Beijing and Delhi.) IBM has produced more research breakthroughs than any other company in the IT
industry. In addition, IBM maintains more than two dozen development labs around the world, employing
115,000 technologists. (1/00)

o For the seventh consecutive year, IBM received the most U.S. patents -- 2,756 U.S. patents in
1999. IBM was awarded more than 15,000 patents during the 1990's, tripling its output of the previous
decade. In 1998, IBM became the first company ever to break the 2,000 U.S. patent issuance barrier in a
single year. IBM owns about 32,000 patents worldwide, including 17,500 in the U.S., with tens of thousands
pending. (1/00)

o In December, 1999, IBM Research announced a $100 million initiative to build a supercomputer,
named "Blue Gene," that is 500 times more powerful than the world's fastest computers. Capable of more
than one quadrillion operations per second (one petaflop), its computing power will initially be used
to model the folding of human proteins -- IBM's first computing "grand challenge" since "Deep Blue."

o IBM's intellectual property portfolio generates more than $1B in revenues annually. (1/00)

o IBM invests more than $5B in research and development annually. (1/00)

o In 1997 Deep Blue RS/6000 SP supercomputer redefined the way humanity understands
its relationships to machines by besting the greatest grand master in chess history. Deep
Blue moved on in 1998 to pharmaceuticals, financial modeling and weather forecasting. (3/98)

o We have employed a total of 5 Nobel laureates. Two are still active employees. (3/98)

o IBM scientists have been awarded the National Medal of Technology, the highest award
for technological innovation in the U.S., six times, and the National Medal of Science
three times. (3/98)

GLOBAL FINANCING

o IBM Global Financing, the largest IT financier in the world, has an asset base of nearly
$40B and delivers financial services in more than 40 countries. IBM Global Financing
offers businesses of all sizes flexible leasing and financing programs that enable them to acquire
hardware, software, services and deploy e-business solutions. IBM Global Financing also
provides Business Partners with offerings for term loans, inventory, accounts receivable,
acquisitions and their customers' acquisitions. Global Financing revenues totaled
$3.1B in 1999, an increase of 9% (10% at constant currency) over 1998. (1/00)

o IBM Global Financing provides IT and leasing solutions to 95 of the 100 largest companies
in the United States, according to 1998 revenues of U.S. companies. 12/99

OTHER

o IBM set new records for Web event performance with www.wimbledon.org, the official
site of the 1999 Wimbledon Championships. Designed, developed and powered by IBM
for The All England Lawn Tennis Club, the official site recorded nearly a billion hits
during the tournament, becoming the most highly trafficked official Grand Slam site in history.
Total traffic for the fortnight tallied 942 million hits, 71.2 million page views and 8.7 million visits.
Early in the tournament the site registered 430,000 hits per minute. In the first nine days it
surpassed a previous record -- 634 million hits set by IBM's 1998 Nagano Olympic Games site
which was recognized by the Guiness Book of World Records for Internet traffic. (7/99)

o IBM's sports Web event sites demonstrate the robust scaleability of IBM e-business solutions,
using the following products and services: Systems integration, Web design and content hosting
from IBM Global Services; IBM PCs, ThinkPads, IntelliStations, Aptivas, RS/6000 workstations,
RS/6000 SPs using AIX operating system, IBM 2216 routers to balance traffic among Web servers
and provide Web caching, Netfinity servers, DB2 Universal Database for Linux, Lotus Notes,
Lotus Domino, Net.Commerce, eNetwork Dispatcher, Tivoli software, IBM SurfAid Analytics, LAN
Network Manager and RAMAC Array storage units. (7/99)

o According to a 7/7/98 Forrester brief, "IBM is the front runner and dominant technology provider
for marquee sports events..." including the '98 Super Bowl; the '98 Nagano Winter Olympics; the
Masters golf tournament; the French, Australian and U.S. Open tennis tournaments; and
Wimbledon." According to Forrester, "...IBM showcases its technology acumen monthly, covering
a variety of sports championships..." and "IBM remains the most prolific technology provider."
(7/98)

o Since 1987, IBM has reduced hazardous waste generation by more than 75%. 74% of the non-
hazardous waste generated by IBM in 1998 was recycled. IBM introduced the first personal
computer to use recycled plastic in the housing in 1992. In 1999 IBM launched the
world's first personal computer using 100% recycled plastic resin for all of the major plastic
parts of its system unit - the IntelliStation E Pro. (1/00)

o From 1989 through 1998, IBM conserved about 8.2 billion kilowatt-hours of electricity (enough to
power 1.4 million average homes in a year); saved $518 million in energy costs; and
avoided approximately 5.7 million tons of carbon dioxide emissions (equal to taking 1.41 million cars driving
10,000 miles off the road) as a result of energy conservation actions. (1/00)

o In December 1997, IBM became the first multi-national company to earn a single, global
registration to the ISO 14001 environmental management system standard. The registration
covers all of the company's global manufacturing and hardware development operations.
The International Organization for Standardization, which sets sound environmental practice
standards for self regulation by countries, businesses and individuals, published ISO 14001
for environmental management systems in September 1996. ISO 14001 assists in making
IBM's environmental management system more consistent, efficient and effective and
promotes further integration of environmental considerations into the business. (1/00)

o Financial Times' December 7, 1999, survey of the World's Most Respected Companies, named IBM #4,
behind GE, Microsoft and Coca-Cola. FT named Lou Gerstner the third most respected world business
leader behind Jack Welch and Bill Gates.

o In April 1998, R&D Magazine named Lou Gerstner "Executive of the Year."

o On Fortune Magazine's list of the "50 Most Powerful Women," IBM General Manager/Global Industries, Linda
Sanford, ranked 23rd. (October 25, 1999)

o In 1999, IBM became the only company chosen for 12 consecutive years by Working
Mothers Magazine to be on the Top Ten List of the 100 Best Companies for Working
Mothers.

o WE Magazine named IBM in 1998 and 1999 as Top Employer of the Year for People with
Disabilities.

o In February 1998, President Clinton presented IBM Chairman Lou Gerstner with the first
Ron Brown Award for Corporate Leadership in recognition of the company's long-standing
commitment to workforce diversity.

o International Data Corporation ranks IBM Learning Services #1 as a worldwide IT training provider. In
1998 IBM Learning Services provided the equivalent of over 2.5 million student days of training. (4/99)

o IBM estimates that for every 1,000 classroom days converted to distance learning, $500K can be
saved. In 1999, IBM expects 30% of internal training will be delivered via distance learning, with
anticipated savings of $100M.
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