IBM CEO Lou Gerstner has admitted that its revenue growth will stay
just below the rest of the industry.
Speaking at an annual meeting with finance analysts, the IBM boss
acknowledged supply problems, including a shortage of skilled
staff, had taken their toll in the third quarter.
As the company moved from a PC-dominated business to B2B
software, services and hardware, Gerstner said revenue growth would
not be the top priority.
He predicted IBM would maintain “high single-digit revenue
growth” slightly below the 10 per cent industry growth rate.
“At some point, we may grow faster than the industry, but we’re
not going to do that by reaching for revenue at the expense of
either fundamental market positioning and making sure we drive
substantial cash to reinvest in the business,” Gerstner said.
IDC analyst Andy Brown said that while IBM “seems in a more
positive state than earlier in the year”, it still faced challenges
in repositioning itself in the market. “SMB is the key battleground
in the next year,” he claimed, suggesting IBM was up against the
smaller tier-two vendors such as Acer and Maxdata which
traditionally focused on the market.
Brown added IBM’s problems with supply had been compounded by
its move to reorganise its European business, especially in the UK
where it was trying to “reorganise the channel”.
“Trying to change your channel is not easy and it affects your
inventory,” he argued.
Gerstner said the supply problems which had cost $100m (£66m) in
hard drive revenue in the third quarter were due to demand two to
three times higher than IBM had predicted.
He also identified a lack of skilled workers as a problem that
would continue to dog IBM and the industry as the global demand for
IT skills and knowledge would outstrip supply by about 25 per cent
until 2005.