IBM chairman John Akers was his usual irrepressible self at the company’s annual meeting in Phoenix, Arizona and cast aside any fears that the company’s better-than-expected first quarter might have been the achieved mainly by catching up with delayed deliveries of the 3390 disks, saying that IBM is beginning to see the positive effects of its $2,400m restructuring and that the full benefit will be felt next year. Even after that charge, IBM was one of the most profitable companies in America, and we increased our dividend, paying more than $2,700m to our shareholders. With the actions we have taken and the opportunities before us, we expect substantially improved financial performance this year. In the first quarter, IBM shipments, revenue and earnings exceeded those of a year ago, a result of continued good demand across our product line. Although three-quarters of the year and additional effort remain in 1990, we are encouraged by our first-quarter results. Indicating the size of IBM’s potential market, Akers said that this year alone, the company expects retail businesses to invest more than $11,000m in information systems; education, $10,000m; financial institutions, more than $18,000m; and manufacturing, more than $30,000m. When you add up the opportunities in our industry around the globe, the numbers are impressive, he went on: There are about 50m businesses in the world today; less than 15% of them use computers, and only 2% of the world’s business information has been digitised. Just in case any of the shareholders thought they had turned up to the wrong meeting, he continued, IBM is four times larger than the nearest competitor. We are the industry leader in mainframes, mid-range systems, personal systems and software. Customers figured large in the Akers address, and he explained that the company had redefined the quality required of our products and services as perfection in the eyes of our customers, and after quoting approving remarks from Frito Lay and Overseas Trust Bank, Hong Kong, he explained what IBM expects of its employees these days. Sometimes, the problems are more immediate and urgent, he said. After Hurricane Hugo struck the southern United States last fall, a bank manager looked out his window to see an IBMer with a rented chain saw, cutting away a fallen tree so he could repair the automatic teller machine.

Tiniest IBM logo

On the products front, Akers claimed that the company was announcing major new products and services at the rate of more than one a day – and $7,000m will be invested in research, development and engineering this year. Perhaps you saw an exciting new development earlier this month: IBM scientists have learned to move and place individual atoms, allowing them to build structures one atom at a time. We were proud to see the world’s tiniest IBM logo broadcast around the globe as a result, he said. On job cuts, Akers noted that over the last four years, management positions had declined by 7,000, up to two layers of management and more than 50,000 staff positions had been eliminated. The restruct-uring is expected to save $1,000m a year from 1991. The future of this company looks very bright, he concluded. I have seen that future in the eyes of the IBMer whose team created an industry-leading product in two-thirds the time at half the cost of the previous product. I have heard it in the voices of the group that is internationally recognised for the best memory chip development in the world. I have seen it on the face of the international marketing executive who is proud that customers throughout the world seek our advice, not only on information technology, but on how to succeed in emerging markets such as the Eastern bloc countries and Europe 1992. As one IBM manager told me recently, ‘When people think they are going to make a difference, they really get excited’. IBM people really do make a difference – and that’s what makes working for our company so exciting. We enter the 1990s with good market opportunities; excellent products, services and business

relationships; a more competitive structure; and a wonderful team of people who know they are being held accountable to deliver on our commitments.