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Letter from the Chariman

It was at the height of the economic crisis in 2008 that IBM introduced the idea of a smarter planet. To some, this might not have seemed the most propitious moment to launch such an ambitious strategic initiative. However, we strongly believed there was an opportunity to address exactly the problems and challenges that were then gripping the world.

 

Now it is nearly two years later and events have, if anything, strengthened this belief. The idea of a smarter planet is speaking powerfully to forward-thinking leaders and citizens around the world. It is opening up a growing global dialogue and generating thousands of innovative ideas. Hundreds of our clients have seized upon new capabilities to build smarter systems, and are achieving measurable benefits for their companies, communities and cities.

Without question, this response is proving beneficial to IBM’s business. However, the phenomenon of a smarter planet is about much more than enhancing one company’s growth and profitability. And that is what this report is all about.

Addressing the issues facing the world now—from clean water, better healthcare, green energy and better schools, to sustainable and vibrant cities, and an empowered workforce and citizenry—does not pose a choice between business strategy and citizenship strategy. Rather, it represents a fusion of the two.

This is possible because of an enormously promising set of developments that have come together over the past decade. The systems by which our world literally works have become increasingly instrumented, interconnected and intelligent. Computational power is now being infused into things no one would recognize as computers, from phones, cars and roads, to power lines, agriculture and waterways. All of these digital devices—soon to number in the trillions—are being connected through the Internet. And all of that data can be turned into intelligence, because we now have the processing power and advanced analytics to make sense of it all. We can see the patterns, spot the outliers, anticipate future trajectories.

These capabilities are making the planet smarter. At the same time they can make it safer, more accountable and more sustainable—but only if we can advance our societies, our policies, our management systems and our cultures as fast as we advance our analysis of the data they are giving off.

We must act now. The opportunity is too great, and the consequences of inaction too dire, to wait for government mandates. This moment requires the commitment and collaboration of corporations, governments, individuals and all of civil society.

Samuel J. Palmisano - IBM Chairman, President and Chief Executive Officer
Samuel J. Palmisano
Chairman, President and Chief Executive Officer
 

Making the world work better

In these pages, you will read about some of the ways IBMers are using these vast new capabilities to spark economic growth and societal progress:

  • –  How our scientists are pushing the frontiers of environmental sustainability—from green data centers, to smarter buildings, to smarter roadways and waterways
  • –  How IBMers are helping to build smarter healthcare systems around the world, with innovations ranging from bioinformatics, to electronic medical records, to smarter hospitals
  • –  How hundreds of IBMers have worked with NGOs and local communities in emerging markets to foster local business development, as part of the Company’s groundbreaking Corporate Service Corps
  • –  How, together, IBMers have achieved a remarkable milestone—more than 10 million hours of volunteer service in communities around the world

Through it all, you will come to understand something about what is now possible for forward-thinking leaders in all sectors of society. And you will come to understand something about the nature of this company and its people.

There have been some, of course, who consider “smarter planet” nothing more than a marketing campaign. And it’s not foolish to be skeptical of any company’s claims, or to be on the lookout for hype and spin. But the fact is that our world is becoming instrumented, interconnected and intelligent, regardless of anything IBM does. When we say that our planet isn’t just getting smaller and flatter, but smarter, that’s not a theory or a proposal. It’s a factual description.

The question is: What will we collectively do about it?

I firmly believe that we have only scratched the surface of what is possible on a smarter planet. And I know that IBM and IBMers are deeply committed to pursuing it—not just for the next year or the next decade, but as a guiding mission that we believe will shape our second century as a corporation.

 

The decade—and century—ahead

One year from now, in June 2011, IBM will mark its centennial. As we do so, we will be looking back at 100 extraordinary years of continual transformation. I believe the work described in this report adds a powerful chapter to that story.

It is work worthy of the company that enabled the Social Security system in the United States in the 1930s, helped put a man on the moon and enabled the operations of the modern corporation in the 1960s. It is worthy of the company that helped transform industries from financial services, to airline travel, to retail. I believe it is consistent with our pioneering of workplace equality, genetics privacy, the globally integrated enterprise and management by core values. And I like to think that it is in line with the ethos described by Thomas Watson, Jr., former IBM chairman and the son of our company’s founder, when he wrote, “Corporations prosper only to the extent that they satisfy human needs.... Profit is only the scoring system.... The end is better living for us all.”

As we have for nearly a century, IBMers today are building global systems on a foundation of advanced science. As we always have, IBMers are delivering economic and societal value, which we are capturing and quantifying every day. And most importantly, as we always have, IBMers are helping to unleash the thinking and aspirations of millions of progressive individuals around the world—including the 400,000 global citizens I am proud to call my colleagues.

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Samuel J. Palmisano
Chairman, President and Chief Executive Officer

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