back to article IBM profits hum along nicely in second quarter

The name is International Business Machines, and perhaps better than any other company in the corporate IT sector, 100-year-old Big Blue is able to follow growth wherever it is on the planet, and capitalize on it. In the second quarter ended in June, IBM raked in $26.7bn in sales, up 12.4 percent, and brought $3.66bn to the …

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IT Angle

IBM to $200?

I would have never thought IBM stock would get to $200, but then again Apple is also doing everything right while Microsoft can't do anything right. Something has to be said about companies that come back from failure and find the right course for the future.

I think HP has not hit bottom yet. They will come back sometime but everything they have done in the last few years has only been about cutting costs and their products are falling behind.

Oracle is the big unknow. If they still only had software there would be nothing stopping them. Their focus on profit from the Sun purchase has served them will but everyone in the business I talk to has Oracle as the next CA. Someone should do a survey of IT vendors like vs. hate. Everyone seems to have doubled their hate of Oracle in the last year.

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Mushroom

Big Blue

IBM have shifted their focus from hardware to software, which has huge profit margins from relatively little outlay and almost 0-cost raw materials.

1. They want something, they buy it from an innovative startup that is a paycheck away from closure, struggling to compete with corporations that offer vertical integration of hardware, software, licences and services.

Works out cheaper than developing it themselves.

2. Then offer the staff of 'Acquired company inc.', who were working with a pay freeze as an act of loyalty to the company to see it through, a non-competitive pay package.

Some will leave for better pay elsewhere, some will stay in a vain attempt at climbing up the bands.

Internally offshore R and D of purchased software packages to other IBM locations, slowly winding up the offices of 'Acquired company inc.' while asset stripping it and merging the product into existing frameworks.

3. Profit $$$

AC for reasons...

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Anonymous Coward

And this is different to any other corporate acquisition ?

I don't think IBM do acquisition differently to anyone else ?

From where I stand, it seems to happen fairly slowly.

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Anonymous Coward

Takeover

IBM was my only career experience of a corporate takeover. Things only happen slowly because suddenly everybody's day is filled with pointless meetings and corporate re-education.

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Ru
Facepalm

Welcome to Capitalism!

You'll not get a free lunch.

If the owners of AC, inc, come out rich: they screwed their employees, not IBM. If they don't come out rich, they're naive at best and incompetent at worst, and they'll either know better for their next business venture or they'll pack it in for good.

In your example, IBM behaved quite rationally and reasonably. They're not a charity.

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Labor Judges in Germany attack IBM Corporation

Stuttgarter Nachrichten (Germany) - 20/07/2011

The Labor Court of the state of Baden-Wuerttemberg in Germany is groaning under the weight of lawsuits filed against IBM Germany. The court has accused the IT corporation of undermining its authority by readjusting company pensions, in defiance of landmark decisions by Germany’s Federal Labor Court and IBM’s own ethical guidelines. IBM was not available to comment. The background to the court’s criticism is an unequaled flood of lawsuits filed by owners of IBM company pensions. They accuse IBM of basing its readjustment on an incorrect period of time, resulting in pensions being lower than they should be. During the first half of 2011, more than 1,600 lawsuits were filed against IBM at the Stuttgart Labor Court and the state’s Labor Court. Stuttgart Labor Court found that in all cases that IBM had failed to raise company pensions to the necessary level in the years from 2008 onwards. IBM appealed against the court’s decision. Given the fact that a total of 20,000 former IBM employees receive company pensions, hundreds more lawsuits are likely. (Original in German)

It seems that IBM Germany is determined to be as vicious to its retirees as has IBM US and IBM UK.

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