Re: ibm earnings report

Steve, et al:

Personally I am rather displeased with the summary press release because
it does not go into the detail of the earnings call, which if you read
the full transcript. Unfortunately too many individuals rely solely on
that release.

See page 4:
http://seekingalpha.com/article/85591-ibm-q2-2008-earnings-call-transcri
pt?source=feed&page=1

or

This is also available as a prepared PDF (page 14):
http://www.ibm.com/investor/2q08/presentation/2q08prepared.pdf

Within these documents is a key differentiator. While the summary press
release simply states "System i was down 47%" it omits the qualifying
information which goes along with this statement, and in it's entirety
states:

"Our legacy System i revenue declined 47 percent in the quarter, as we
transition our System i customer base to the converged POWER platform.
Converged System p had an outstanding quarter, growing 29 percent,
gaining share and extending its market leadership position.

Last quarter we had growth of almost 60 percent in our midrange servers,
this quarter we accelerated midrange growth to 68 percent."

I think this a very relevant and specific point. They clearly have
begun to converge the revenue lines for the product and by the looks of
things they've muxed this into the System p line, since there is no
separate line for POWER. I think this paints a picture which shows
things worse off than perhaps they really are.

I agree how would we know the separable IBM i operating system revenue,
especially since there is another revenue line for operating systems.

- Kevin.

date: Fri, 18 Jul 2008 12:36:02 -0400
from: "Steve Richter" <stephenrichter@xxxxxxxxx>
subject: Re: ibm earnings report

On Fri, Jul 18, 2008 at 12:22 PM, BirgittaHauser

<Hauser@xxxxxxxxxxxxxxx> wrote:

Hi,

As far as I know are only the small legacy and power 5 machines

(such as

515, 525) counted as System i. The bigger Systems, such as the 570

and the

new power 6 systems are completely counted as p Series or power

systems.

a concern going forward is how do we know how well the IBM i OS is
selling? people and shops need to know this to make decisions on their
own careers, what technology to focus on.

-Steve