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After I met a sales person, I asked about WSEB or the Lotus SS upgrade. The fellow didn't even bat an eye before he told me IBM had discontinued OS/2. It was no longer available and could he help me find something else.... After a bit of a run around, I was able to find someone who knew both what OS/2 was and that IBM was actually still selling it. The prices I finally got for both WSEB and the Lotus SS upgrade (after one week of waiting), were dismally high, considering both were upgrades to original products. I got better prices on-line....
I guess the reason I sent you this story is to support what a number of writers have already stated: IBM's lower end employees, the ones who meet the public, are already certain (brainwashed) that OS/2's death is a done deal. Furthermore IBM's pricing on even upgrade items is so high that it is almost certainly easier to change OS's than perform an simple upgrade.
It is a disturbing trend noted by almost all users of this OS!
So whither IBM? There is no doubt that before the problems of the late eighties, IBM was a wealth creator and a growth stock. However, when Mr. Gerstner was brought in, he saw a company whose resources could no longer be supported by its income. There are two approaches to this problem: cut resource to match income generation capability or develop new products to occupy the excess resource. Like most company doctors, Mr. Gerstner chose the first option and did an excellent job - but I believe all the benefit from this activity is now fully reflected in the stock price. Following this reconstruction, however, there continues to be the necessity of competing in the IT marketplace as it develops and of providing customers with the products they wish to buy.
In terms of moving IBM forward, what Mr Gerstner has principally done is to expand activities which were in place when he arrived - enhancing mainframe systems, enhancing mid-range systems and adding more services. What he hasn't successfully done is come up with innovative products in that part of the IT marketplace which is accounting for an ever increasing proportion of business IT spend: a marketplace which revolves around the desktop and its associated architectures and communications systems. As a consequence of this, the IBM stock price has spent the last year prosaically tracking the Dow and stands on an undemanding P/E ratio in the 20s, whilst the technology sector is booming. Even quality companies are commanding multiples more than twice this: look, for example, at how Microsoft, a strong competitor in this marketplace, is rated! What this means is that IBM's failure to compete successfully for client/LAN/server/internet business is costing every stockholder at least $100 in the share price. The corollary, however, is that there is tremendous upside potential if IBM were to compete for the money being spent in and around the desktop.
If IBM does not attack this marketplace, then the stock will probably gradually be re-rated into an income stock. Whether or not IBM remains a player in the wealth creation process could well, therefore, be in the hands of its institutional investors. These will either bring external pressure on the board to do something or they will quietly advise their clients to view the IBM Corporation in a different light - as an income stock which can only be expected to grow its capital value more or less in line with the market.
The $64 question therefore, is whether the jury is still out or whether attitudes have already begun to change.
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