This year is certainly shaping up to be a crucial year for IBM. In addition to divesting its x86 server business, IBM has made billion-dollar investments in Watson supercomputer and cloud technology. The Armonk, N.Y.-based company has also announced plans to rebalance its work force.
In her letter, Rometty was adamant that IBM is not exiting hardware, despite a recent flurry of media reports that the company was looking to sell off other parts of its portfolio, such as its chipmaking operation.
"There have been rumors that the company is considering selling its microelectronics division," wrote Pund-IT's King. "However, given how critical that organization is to the company's signature System z mainframe and Power Systems solutions, any sale would have to be to a vendor IBM considered a deeply trusted and able microprocessor partner. By definition, that would be a very small list."
TBR's Williams doesn't expect to see IBM carve off more parts of its business.
"In terms of M&A, I don't see more divestment, perhaps some head count slimming in outsourcing due to increased automation," he wrote.
IBM shares, which have dipped 11.29% over the last 12 months, gained 0.09% to $186.55 in Tuesday trading.
-- Written by James Rogers in New York.
>Contact by Email.