IBM CFO Give Cautious Outlook

"The street's current average of expectations sees us getting back to some growth next year," he said. "We think this is a reasonable objective. The street's average estimate for growth and earnings per share are reasonable."

Joyce declined to comment on fourth-quarter activity, and he made no predictions about when the economy might turn around. "From the revenue standpoint, we'd like to see the economy pick up a little bit. And as we roll out the capabilities that we've discussed here today, I think we can grow faster than GDP. For me to stand here today given what's going on in the marketplace and predict high single digits (in revenue growth), we're not going to do that. We have 2003 in our sights and I'm going to stop predicting because there are a lot of people who have been predicting lately and they've not been very correct," he said.

Sam Albert, president and CEO of Sam Albert Associates said, "When the dust settles, IBM is better positioned than anyone else (to tackle integrated outsourcing solutions). IBM is becoming a solutions provider instead of a piece parts supplier."

IBM executives made clear during the meeting that the channel will form the vanguard for the company in the SMB market. Mike Lawrie, IBM's senior vice president and group executive, sales and distribution, said that 58 customers account for 22 percent of IBM's revenue, 4,400 customers account for 55 percent, and 500,000 customers in the SMB space account for the remainder.

Lawrie said that because of the reach and expertise of business partners, IBM relies on the channel to deliver the bulk of IBM branded solutions in the SMB space. "We have struggled with this SMB space for years but now we are growing with and in some cases outpacing the market (in SMB)," he said.