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IBM upbeat on tech spending

International Business Machines Corp (IBM) chief executive officer Sam Palmisano said he expects worldwide demand for computers, software and related services to continue to pick up this year.

"We are enthusiastic about our prospects for 2004 and beyond," Palmisano told shareholders the company's yearly meeting in Providence, Rhode Island. Economies are steadily improving in many nations, including the US, he said. "We intend to capitalize fully on the rebound."

Palmisano, 52, is counting on increased technology spending to boost sales at Armonk, New York-based IBM, the world's biggest computer maker. He didn't give a specific forecast for computer-related budgets. IBM's first-quarter net income rose 16 percent, helped by acquisitions, and competitors including Hewlett-Packard Co and Microsoft Corp also have posted profit gains.

Researcher IDC said this month that computer-related spending may rise 5 percent this year after growing 0.4 percent last year and declining in 2001 and 2002. Consumers are increasing spending at a faster rate than businesses, IBM's main customers, investors and analysts say.

IBM plans to continue to add features such as the Power5 microprocessor to its products to win sales from competitors including Hewlett-Packard. The company touts Power5 as the fastest chip of its kind and will begin shipping servers with the processor in June, Palmisano said.

"We've grown aggressively in emerging markets," he said.

"In China, Brazil, India and Russia we generated revenue of US$3 billion last year and are seeing double-digit growth."

IBM has benefited after buying companies such as Rational Software Corp last year and PricewaterhouseCoopers LLP's business-consulting unit in 2002. The company will continue to purchase small software and services firms, Palmisano has said.
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