IBM will face trouble in 2010...
"Outsourcing is clearly not only a good business, but good for business, as Big Blue has been shifting big chunks of its support and supply chain operations overseas for the past several years."
In simple terms, this is a sign of the downward spiral and its only a short term trick to fudge the earnings numbers.
What happens when a lot of the outsourcing deals are up for renewal?
The customers of IBM watch and see how IBM is increasing margins by shifting the work overseas. Thus when the contract ends or is up for renegotiation, the customer will crush IBM's margins and negotiate for better terms. This will put more pressure on IBM to increase margins in a declining business and there will be further decline in revenue.
Note, that that is the outsourcing business. With respect to moving operations overseas to lower cost centers... Well what happens when you need a deal done and the back office staff is out of the office because of the time zone shift? Not good.
In short, it looks good for the current quarter so Sam and friends get their options. Longer term... IBM is going to hurt and hurt big time.
Its not just hitting the numbers but how you hit the numbers. You can get anorexic but at some point its going to kill you.