An IBM family of personal computer systems designed primarily for the consumer market.


An IBM family of computer systems designed for business use and supporting multiple users. Often classified as midrange systems.


cash equivalents

All highly liquid investments with a maturity of up to three months from the date of purchase and carried at fair value. Listed in the current assets section on the statement of financial position.

current assets

Assets a company can convert to cash within one year. Examples are accounts receivable and inventories of products to sell.

current liabilities

Obligations a company has to creditors, suppliers, tax authorities, and others, payable within one year.

custom logic

Semiconductor chips designed for a specific purpose or product. IBM Microelectronics makes these chips for IBM divisions and external customers.



A collection of data in a computerized form organized for rapid search, update, and retrieval.

DB2 universal database

An IBM family of database products for systems from IBM and competitors such as Sun Microsystems, Hewlett-Packard, and Microsoft.


An allowance made for loss in value of a fixed asset because of wear or age. The cost of the fixed asset is allocated over its estimated useful life, using the straight-line method. The estimated useful lives of fixed assets such as plants, rental machines, and other properties generally are as follows: buildings, 50 years; building equipment, 20 years; land improvements, 20 years; plant, laboratory, and office equipment, 2 to 15 years; and computer equipment, 1.5 to 5 years. Listed in the assets category on the statement of financial position.


Cash or stock payments from a company's profits distributed to stockholders, an equal amount for each share of stock owned. Listed as dividends on the statement of stockholders' equity.


A Lotus (an IBM company) family of servers for messaging, security, systems management, and data distribution and replication across the Internet.


(dynamic random access memory) A high-speed, flexible technology for storing data electronically in a chip.


(digital video disk, digital versatile disk) A type of CD-ROM that stores many more hours of digital video, enough for a full-length movie video.


earnings per share

Net income after deduction of preferred stock dividends, divided by the weighted-average number of common shares outstanding for the period. Listed in the per share of common stock amounts category on the statement of earnings.


The transformation of key business processes using Internet technologies. See also e-commerce.

e-commerce (EC)

Doing business online, including buying and selling online via the Internet, electronic funds transfer, business communications, and using computers to access business information resources. See also e-business.

enterprise investments

An IBM segment that provides information technology solutions supporting the hardware, software, and services sections of the company. The segment develops unique products designed to meet specific marketplace requirements and to complement the company's portfolio of products.

enterprise servers

Large systems designed for a wide range of applications serving medium to large companies and/or high-volume Internet connections. Often called mainframe computers.


The part of an intranet available to authorized outside users such as customers, suppliers, and strategic business partners. Depending on levels of authorization, users can view all or parts of inventories, databases, and other proprietary information.


Financial Accounting Standards Board (FASB)

An association of accounting professionals that decides, maintains, and communicates generally accepted accounting principles (GAAP).


giant magnetoresistive head

The most advanced, sensitive type of sensor for reading data on a magnetic disk storage device. IBM Storage Systems introduced this head technology in commercially available products in 1998.

Global Financing

An IBM division that provides and facilitates a wide array of financing services for a company and its customers and business partners worldwide. The division's primary focus is to leverage a company's financial structuring, portfolio management, and partnering skills to expand its customer and partner base.

global services segment

An IBM segment that provides the largest, most versatile information technology (IT) services worldwide. It is uniquely suited to integrate the full range of a company's capabilities, including hardware, software, and research. The segment supports hardware and software products that help companies of all sizes realize the full value of IT. Customer services include the following: business and IT consulting, business transformational services such as ERP (Enterprise Resource Planning) solutions, e-business services, and full scope services such as strategic outsourcing and Total Management services.


An intangible asset that adds value to a company's worth, for example, the reputation of its products, services, or personnel. Goodwill is charged to earnings on a straight-line basis over the periods estimated to be benefited, generally not exceeding five years. IBM conducts reviews periodically to evaluate recoverability of this goodwill. Listed in the assets category (sometimes as "Investments and sundry assets") on the statement of financial position.

gross profit

The difference between a company's total revenue and its cost of producing the product to generate the revenue. For example, if IBM sells a computer for $10,000 and pays $6,000 in materials and labor to manufacture and ship it, the gross profit would be $4,000. To calculate the gross profit margin, divide gross profit dollars by total revenue. In this example, the gross profit margin (GPM) is 40 percent. Listed as a category on the statement of earnings. Also called gross income.


Multiuser software designed to help team members coordinate and track joint projects and access the same data. Functions that support effective communication and collaboration include an email messaging system, document and database sharing and management, group calendaring and scheduling, threaded discussions, and audio and videoconferencing. See also Lotus Notes.


hard disk drive (HDD)

A type of magnetic disk storage, a platter on which data can be encoded and stored, and the primary computer storage device. Developed by IBM in 1956, today's hard disks provide fast retrieval because they rotate constantly at high speed, from 3,000 to 10,000 rpm, and can hold several gigabytes.


All computer physical storage and transmission equipment such as servers, disk devices, and network adapters. In operation, a computer is both hardware and software.


income taxes

An expense based on reported earnings before income taxes. Deferred income taxes reflect the temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes.


An IBM family of high-performance hardware systems designed for the Microsoft Windows NT operating system.

Internet, the Net

A global network of host computers that offers services to any computer connected to it by a modem and telephone line. Services include the Web, email, file transfer, and newsgroups.


Similar to the Internet, with one difference. The computers connected to each other in this closed, private network belong to one corporation, business, family, school, or other defined private group.


Raw materials, works-in-process, and finished goods, stated at the lower of average cost or net realizable value. Listed in the current assets section on the statement of financial position.



A programming language for creating Java applets and programs for the Internet, intranets, and other networks. For example, it can process the data a user types in an entry form that a JavaScript applet displays. Developed by Sun Microsystems, IBM and many other companies support and use Java.



A company's debts to a lender, a supplier of goods and services, a tax authority, a landlord, and others.

long-term debt

Debt a company will repay after one year. Listed in the liabilities category on the statement of financial position.

Lotus Notes

A Lotus (an IBM company) software product widely used for email, calendaring, group scheduling, Web access, and information management. See also groupware.


magnetic disk storage

The primary computer storage device. Data is recorded erased, or re-recorded on disks, spinning platters coated with magnetic material. Developed by IBM. See also hard disk drive (HDD).


The work required to keep a network running smoothly. This upkeep covers network operating systems and any other software and hardware such as servers.

marketable securities

Highly liquid securities with a maturity less than one year.

messaging and collaboration software

Products such as Lotus (an IBM company) Domino that provides an infrastructure to support secure, interactive Web applications and email, and collaboration software such as Lotus Notes.


Electronic devices that can be produced on a chip, and the various sciences involved in designing and building these chips.


(million instructions per second) A measure of computer processor speed and power.


net income

A company's total revenue less total expenses, showing what a company earned (or lost, called net loss) for a set period, usually one year. Listed often literally as the "bottom line" on the statement of earnings. Also called net earnings and net profit.


An IBM family of servers based on Intel processors and designed for network connections.

network computer (NC)

A type of thin client designed to connect to a network, especially the Internet. This computer system stores data and applications on a network server, from where it obtains or downloads them. Because the bulk of data processing occurs on the server, NC users don't need all the memory, disk storage, and processor power they get from a typical personal computer.

network computing

This "open" system network provides universal connectivity, real-time collaboration, multimedia content, network services, and Web-based programs for secure commercial transactions to run on diverse platforms -- Windows, Macintosh, and OS/2. The system reduces for individuals the complexity of maintaining personal computers, relying instead on central servers and network computers.

Network Station

IBM hardware product -- a type of network computer (NC).

noncurrent assets

Anything of long-term value to a company, including fixed assets and intangible assets. Listed in the assets category (after current assets) on the statement of financial position.


An annual report section that provides information essential to fully understanding the financial statements. Notes explain the financial statements' numbers and any significant events affecting them. Notes also provide additional detail and supplementary financial information. Also called footnotes.


operating expenses

Dollars spent on research, development, marketing, and selling products and services, and the general expenses associated with running the business. Listed as a category on the statement of earnings.

OEM (original equipment manufacturer)

A manufacturer that sells equipment to a reseller to market, often as a component in a larger system. IBM is an OEM, for example, when selling its disk drives to other personal computer makers. OEM customers (resellers) add value to equipment, for example, by placing a private label on it or bundling it with their own products.


personal systems segment

An IBM segment that produces two types of hardware: (1) general-purpose computer systems, including some system and consumer software, as personal computer clients for single users or as servers and (2) display devices. Major brands include the Aptiva family of personal computer systems, IntelliStation NT workstations, Netfinity servers, PC300 business, desktop systems, and ThinkPad notebook PCs. The segment also produces consumer software brands such as Crayola, Edmark, and the World Book Multimedia Encyclopedia. Primarily reseller and retail channels sell these products.


A family of RISC-based computer processors (chips) developed jointly by IBM, Apple Computer, and Motorola Corporation and used in IBM RS/6000 systems and Apple Macintosh computers.


rental machines

Computer equipment IBM uses internally or as part of managed operations contracts.


(reduced instruction set computer) An economically-built computer that executes instructions very fast because the instructions are few and simple.


(RISC System/6000) An IBM family of RISC-based workstations and powerful servers using IBM's PowerPC processors.



A measure of software licensing based on a per user basis. For example, in groupware such as Lotus Notes, a single software purchase might authorize many seats, or users.


A miniaturized electronic device, typically a computer chip for processing or memory, that controls the flow of electricity by varying the conductance between two materials.


In any network, a computer system, computer, software program, or hardware (such as a printer) that stores and helps retrieve data, supplies files, or provides services (such as printing) to the requesting client (computer or program).

server segment

An IBM segment that produces general-purpose computer systems, which run host-based applications, as servers that multiple users access. Major brands include S/390, AS/400, and RS/6000. IBM and its partners sell them directly.


The many initial and ongoing tasks required to set up and operate a network, servers, and other devices. IBM Global Services and its competitors offer these services to customers.

silicon germanium

A new material used to make semiconductor chips for faster processing and smaller memory requirements than conventional silicon chips. This new chip technology will likely lead to cellular phones, pagers, and other wireless communications devices that have extended battery life, do multiple functions, and are smaller, lighter, and cheaper.


A chipmaking technology that builds transistors on a thinner layer of silicon than previously possible, improving chip performance and reducing power consumption.


Computer instructions stored electronically. A series of instructions that does a particular task is called a program. System software is an operating system such as Windows. Application software is any program that processes data such as a spreadsheet. In operation, a computer is both hardware and software.

software segment

An IBM segment that delivers solutions on multiple IBM and non-IBM platforms for application development, data management, networking, systems management, transaction processing, groupware, and operating systems. Besides its own product development and marketing effort, the segment supports more than 11,000 independent software vendors to ensure that software solutions meet customers' current and future needs.

statement of cash flows

A financial statement that reports the flow of cash in and out of a company for a set period, usually one year. It reports the operating, investing, and financing activities of the company.

statement of earnings

A financial statement that reports the results of a company's business operations (revenue and expenses) for a set period, usually one year.

statement of financial position

A financial statement that reports a company's assets and the claims against them (liabilities and stockholders' equity) at a set date noted on the statement. Also called balance sheet.

statement of stockholders' equity

A financial statement that reports the changes in the owners' interests (equity); for example, by detailing changes in net earnings or dividends paid to stockholders.

stockholders' equity

part of a company's assets that belongs to the stockholders. It is the amount that would remain if a company sold all its assets and paid off all its liabilities. Listed as stockholders' equity on the statement of financial position and on the statement of stockholders' equity.


A holding place for digital data that allows for later retrieval. Examples of storage devices are hard disk drives and CD-ROMs.


The fastest type of computer, designed for enormous, intensive processing tasks such as analyzing complex weather models and simulating nuclear explosions.

systems management

The tasks required to keep all computer system (or network of systems) elements functioning smoothly. Many tasks are automated, for example, version control, backup and recovery, printer spooling, job scheduling, and virus protection.


technology segment

An IBM segment that produces peripheral equipment for general-purpose computer systems, including storage and networking devices, advanced function printers, and display devices. The segment also provides components such as semiconductors and hard disk drives for the company's products and for sale to original equipment manufacturers (OEMs). Major business units include Storage Systems, Microelectronics, Printer Systems, and Networking Hardware.

thin client

A computer system designed to connect to a network, especially the Internet. A thin client stores data and applications on a network server, from where it obtains or downloads them. Because the bulk of data processing occurs on the server, users don't need all the memory, disk storage, and processor power they get from a typical personal computer. A network computer (NC) is one type of thin client.


An IBM family of lightweight, portable personal computers typically classified as notebook systems because of their size and shape.


An IBM family of software designed for managing network computing systems enterprisewide. Developed by Tivoli Systems, an IBM business unit.

transaction processing software

A program that does a transaction, then updates a database securely and reliably. For example, retrieve a bank balance, authorize a cash withdrawal, and update the balance.



Operating system software designed for RISC-based systems. The many variations of UNIX include IBM's AIX.


(universal resource locator) An Internet address, for example,



A hardware and/or software system designed or updated to function over the Internet or connect to it.

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