IBM 2009 Annual meeting of stockholders
"You need to know that IBM is well positioned to continue delivering strong results, as we have been doing... as we did again in 2008... and as we continued to do in the first quarter of 2009. Last year we achieved record revenue, record pretax earnings, record EPS and record free cash flow."
With these words, IBM's Chairman and CEO Sam Palmisano began his report on our strategy and results to our shareholders at IBM's annual meeting of stockholders.
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Before its Annual Meeting, IBM offered stockholders the opportunity to submit questions via the Web for the Q&A period of the meeting. Below is information about the responses provided at the meeting.
Globalization
The first Web question addressed by IBM Chairman and CEO Sam Palmisano was about how globalization has impacted the company. Mr. Palmisano stated that IBM has operated as an international company for almost 100 years, and that we operate in about 170 countries, with the majority of our revenues and employees outside the United States. He noted that the company's ability to anticipate change, to move to the future, and to leverage our research and innovation capabilities has allowed us to continue to garner the results we've been able to achieve for our stockholders. Mr. Palmisano indicated that many of the initiatives in the government's first economic stimulus package are aligned with new, highly skilled, high paying jobs to create intelligent grids, intelligent healthcare and broadband capacity in rural areas, and that IBM's approach is consistent with comments made by President Obama. The focus, Mr. Palmisano explained, is on creating "capabilities through the education systems, through R&D credits and the like, for the U.S. to create these jobs as well as for businesses to compete on a global scale."
Stock Split
The second Web question Mr. Palmisano addressed related to whether IBM should be splitting its stock. Mr. Palmisano explained that splitting the stock increases the number of shares outstanding but does not impact the market value. He indicated that from time to time the company considers whether it's appropriate to do a stock split or to instead return value to stockholders in the form of dividends and share buybacks, noting that for the past few years, IBM has returned more than 100 percent of its net earnings to stockholders in the form of dividends and buybacks.
Cloud Computing
Mr. Palmisano also addressed a Web question on cloud computing. Cloud is an emerging model for the consumption and delivery of IT-enabled capabilities like servers, storage, networking, software applications or complete business processes as a service. It's inspired by consumer internet services that are easy to use and are shared by many thousands or even millions of users. The cloud model leverages technologies where IBM is strong: service oriented architecture and management, virtualization and standardization of computing through the Internet.
Mr. Palmisano noted that IBM has undertaken tremendous work about "how you could create these virtualized, more secure, more efficient infrastructures for large enterprises and small enterprises around the world." He observed that IBM believes that over time, cloud computing could be a very attractive computing architecture, which scales in a very economic way and provides a high level of quality of service.