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1
 Mainframes and mid-range computers (including
OS’s) were IBM’s bread and butter
 IBM expects to exceed $100B in revenue by the end of
the decade and begins building people and plant
capacity to support that level of revenue
 IBM begins to convert it’s rental business model to
sales and leasing to support growth
 The rise of PC’s and micro-computers re-shape the IT
industry
 IBM begins to struggle as the market shifts and it’s
growth projections don’t pan out
2
3
Profit margins stood at 13-14% in the first half of the decade
4
Profit margins had dropped below 10% by the end of the decade, revenue stands at $60B in 1989
5
6
 The PC era begins to mature
 The internet and dot.com era begins
 The predicted death of the mainframe turns out to be
wrong
 IBM pays the price for it’s missteps in the 1980’s
 IBM plans to breakup the company into smaller
operating units
 IBM gets a new CEO Lou Gerstner in April 1993
 IBM acquires Lotus
 Gerstner decides to keep the company together
 IBM grows it’s services business
7
8
Profit margins dropped to between 5 and 6% in the first half of the decade
9
Profit margins had risen back to 8% by the end of the decade, revenue stands at $82B in 1999
10
 Y2K comes and goes with no issues, services
revenue slow
 The dot-com bubble bursts
 IBM acquires PWC
 The PC business commoditizes
 IBM exits the consumer PC business and
eventually sells the PC business altogether
11
12
Profit margins close to 9% in first half of decade
13
Profit margins had risen back to 10% by 2007 and almost 15% by 2010..
2007: 2010:
14
15
16
17

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Ibm's turn arounds

  • 1. 1
  • 2.  Mainframes and mid-range computers (including OS’s) were IBM’s bread and butter  IBM expects to exceed $100B in revenue by the end of the decade and begins building people and plant capacity to support that level of revenue  IBM begins to convert it’s rental business model to sales and leasing to support growth  The rise of PC’s and micro-computers re-shape the IT industry  IBM begins to struggle as the market shifts and it’s growth projections don’t pan out 2
  • 3. 3 Profit margins stood at 13-14% in the first half of the decade
  • 4. 4 Profit margins had dropped below 10% by the end of the decade, revenue stands at $60B in 1989
  • 5. 5
  • 6. 6
  • 7.  The PC era begins to mature  The internet and dot.com era begins  The predicted death of the mainframe turns out to be wrong  IBM pays the price for it’s missteps in the 1980’s  IBM plans to breakup the company into smaller operating units  IBM gets a new CEO Lou Gerstner in April 1993  IBM acquires Lotus  Gerstner decides to keep the company together  IBM grows it’s services business 7
  • 8. 8 Profit margins dropped to between 5 and 6% in the first half of the decade
  • 9. 9 Profit margins had risen back to 8% by the end of the decade, revenue stands at $82B in 1999
  • 10. 10
  • 11.  Y2K comes and goes with no issues, services revenue slow  The dot-com bubble bursts  IBM acquires PWC  The PC business commoditizes  IBM exits the consumer PC business and eventually sells the PC business altogether 11
  • 12. 12 Profit margins close to 9% in first half of decade
  • 13. 13 Profit margins had risen back to 10% by 2007 and almost 15% by 2010.. 2007: 2010:
  • 14. 14
  • 15. 15
  • 16. 16
  • 17. 17