Beyond Tomorrow

Last week the market was flooded with financial news from some of high-tech's bellwethers, and it was mostly good news. Companies such as EMC, Sun and Microsoft delivered a much-needed shot in the arm after the Dow and Nasdaq spiraled downward, bringing many tech issues with them. Good news was desperately needed.

ELLIOT MARKOWITZ Can be reached at (516) 733-8677 or via e-mail at emarkowi@cmp.com.

For its part, IBM also released better-than-expected earnings for its third quarter, albeit only by a small margin, but disappointing sales. Sales nudged up to $21.8 billion while profits rose to $1.96 billion. What was worrisome to investors and solution providers is that the company's software sales experienced an unexpected softness, its server business was caught in transition and it is wrestling with supply and demand issues for its high-end processors. No doubt, IBM must address these issues quickly.

But while IBM was addressing Wall Street last week, myself along with CRN Senior Editor Ed Moltzen got an inside look at a very different IBM. We took the drive up to rural Yorktown Heights, N.Y., where the Thomas J. Watson Jr. Research Center is located and met with Paul Horn, senior vice president in charge of IBM's $5 billion-plus research agenda. Horn and a handful of others walked us through IBM's work with the pharmaceutical industry on the human genome, technologies to better database search and match functions, wireless initiatives incorporating voice and data, and some of what the company is doing in a science lab setting to look for better conductors such as copper technology. We left with the feeling that research is alive and well and, most of all, empowered. That's right, empowered. For the bulk of the 1970s and '80s, IBM researchers and inventors were, for the most part, working in seclusion from the rest of the company. As a result, their work was never really fully incorporated into IBM's overall strategy and real product development efforts. Well-known for its groundbreaking research work and its vigorous patent filings, IBM has always had the stigma of not bringing these innovations to practical use. Things are different now. Research and development is now the cornerstone of IBM's product development efforts. Horn describes an environment where IBM researchers are now part of the company's technological vision and business strategy.

Last week most of the industry was picking apart IBM's third-quarter financial performance and worrying about what the next three months will look like. It was good to be reminded that there is still a group of folks thinking beyond that.

You've listened to me; now it's my turn to listen to you. Call me at (516) 733-8677 or e-mail me at emarkowi@cmp.com.