Message Font: Serif | Sans-Serif
No. of Recommendations: 15
Long-Term IBM Potential, Update 5

I think that IBM has tremendous growth potential over the next decade. For example, here are just some of the long-term contracts IBM has signed up since December '98 (updated since the last posting, with new listings/hyperlinks), in order of decreasing contract value:

(Company name - contract commitment, type of product or service [contract duration])
Dell - $16B in component sales; $6B in outsourcing [multi-year]
Acer - $8B, components [7 years]
EMC - $3B, components [5 years]
Cisco - $2B, components [7 years]
Galeries Lafayette - $1.2B, outsourcing [15 years]
Nissan - $1.0B, outsourcing [9.5 years]
Nintendo - $1.0B, components (for Jupiter) [multi-year]
Portugal Telecom - $1.0B, outsourcing [10 years]
Bank One - $558M, outsourcing [7 year]
Allied Signal - $550M, outsourcing, hardware, software [7 years]
Mazda - $480M, outsourcing [10 years]
Ford Europe - $300M, outsourcing [5 years] ** New addition **
Musashino Bank (Japan) - $260M, outsourcing [10 years] ** New addition **
Mitsui Marine Insurance - $235M, outsourcing [10 years]
Telephonica Italia - $200M, outsourcing [multi-year]
CGU (UK) - $200M, outsourcing [7 years]
Sega - (I don't recall how much), components and manufacturing (for Dreamcast) [multi-year]
Apple - (undisclosed), components (copper-based PowerPC G4 chip) [multi-year]
Cazenove (UK) - (undisclosed), outsourcing [10 years]

(I believe that EDS and AT&T both signed large outsourcing deals, but I don't recall the details. And I think there was another foreign telephone company. There are probably others I have forgotten as well.)

Here is a great Business Week article about IBM's e-commerce potential: ** New addition **

According to an article discussing recent outsourcing deals, there is presently a backlog of $58B in IBM long-term outsourcing contracts just waiting to be completed. So it looks like IBM Global Services will be sitting pretty for the next decade. The long-term component deals kick in another $35B-$40B. That's $90 to $100B already locked in, without even including computer and software sales!

And this doesn't count billions to be made in patent licensing for advanced technologies, including:
- Copper chip, optical lithography, and other advanced manufacturing technologies (
- Silicon-on-Insulator technology (
- Flexible transistors
and other high-performance/power-reducing/ergonomic technologies that no one else has, but will need in order to compete in the next century. IBM has led the world in US patents received for the last 6 years in a row. This press release talks about some of them: ** New addition **

Or how about hard drives? IBM has the biggest/smallest/densest hard drives on the market:
- The first 73GB(!) 3.5" drive (
- The revolutionary 340MB microdrive (the size of a quarter dollar) that can be used in digital cameras, MP3 music players, and other small devices (
- The third world record in the last year for drive storage density (

Did you know that 40% of all new laptop hard drives are made by IBM, or that IBM ships more state of the art Giant Magneto-Resistive read/write heads for hard drives than anyone (

Or that IBM has demonstrated a prototype wearable computer (, about the size of a portable CD player, with a headset (about the size of a pair of glasses with one lens) for video output, with voice recognition. See for pictures. Here is an updated article:

For another interesting future technology, how about the Personal Area Network (PAN): ** New addition **

I hope you find this useful. I'll try to update this list periodically.

Take care. Mark.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.