IBM Gives Optimistic View but Few Specifics

Sacconaghi's question is one IBM executives are likely to face again in the coming year. Acquisitions of PricewaterhouseCoopers and Rational Software are expected to contribute almost 60% of IBM's top-line growth in 2003. But IBM's revenue growth in 2004 will be almost completely dependent on share gains and an improved macro environment, according to Goldman Sachs analyst Laura Conigliaro, who has a neutral rating on IBM. Goldman has done banking with IBM.

Separately, IBM on Wednesday launched a push to win share in the storage market from EMCEMC. Big Blue has formed a 100-member team dedicated to the fight with EMC and claims that it has already converted a number of major EMC customers, including Royal Caribbean CruisesRCL and the U.S. Department of Agriculture.

The wins come at a good time. IBM admits that it has been losing share to "a major competitor" -- i.e. EMC -- while Dell's DELL partnership with EMC is bearing fruit. Speaking at a Credit Suisse First Boston conference earlier this week, Dell COO Kevin Rollins said the partnership has added more than 7,000 new customers since the beginning of fiscal 2003.

EMC was predictably unimpressed with the announcement -- and so was Wall Street. Pacific Crest analyst Brent Bracelin called the program "P.R.-ware," and said IBM's Piper technology, which the company emphasized in its announcement, wasn't all that new. (Pacific Crest does not have a banking relationship with either company.)

Still, the announcement points to the increasingly competitive nature of the enterprise storage market, a sector expected to grow strongly as IT spending bounces back from the recession.

Shares of IBM closed up $1.12, or 1.2%, to $91.42 before falling to $91 in after-hours trading.