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IBM Surpasses Microsoft as World's Second-Most Valuable Tech Company

Strategic Insights

— 2 min read

IBM's market value rose to $214 billion yesterday, surpassing Microsoft's $213.2 billion, marking the first time since 1996 that IBM has exceeded its software rival based on closing prices. This development reflects the industry's shift away from personal computers, with IBM's focus on corporate software and services paying off. CEO Sam Palmisano's strategy to sell the PC business and invest in software, computer-services, and consulting has resulted in over 20% increase in sales and 30 straight quarters of rising per-share profit.

Key Takeaways:

  • IBM's market value has exceeded Microsoft's for the first time since 1996, with a market value of $214 billion compared to Microsoft's $213.2 billion.
  • IBM's focus on corporate software and services has led to a 20% increase in sales and 30 straight quarters of rising per-share profit under CEO Sam Palmisano's leadership.
  • IBM has invested over $25 billion in its software, computer-services, and consulting businesses, with over half of its $99.9 billion in revenue coming from services last year.
  • IBM's sales have grown 20% from 2001 through last year, with costs kept relatively low despite the company employing 426,000 people.
  • IBM plans to add $20 billion to revenue through 2015 through initiatives such as emerging markets, analytics, cloud computing, and an initiative called Smarter Planet.
  • IBM's CEO Sam Palmisano has stated that computing is now found in non-traditional devices, such as appliances and automobiles, with the company aiming to almost double operating earnings to at least $20 a share in 2015.
  • Microsoft's market value has dropped 8.8% this year, with CEO Steve Ballmer citing difficulties in shifting focus from PC business to emerging markets.

Statistics:

  • IBM's market value has risen 22% this year compared to Microsoft's 8.8% drop.
  • IBM's sales have grown 20% from 2001 through last year, while keeping costs relatively low.
  • IBM has invested over $25 billion in its software, computer-services, and consulting businesses.
  • IBM's revenue from services has exceeded $50 billion last year, with over half of its $99.9 billion in revenue coming from services.
  • Microsoft's market value has reached over $430 billion in the past but declined to $135 billion in March 2009 before recovering with the market.
  • IBM plans to add $20 billion to revenue through 2015.

Sources:

  • Bloomberg
  • Forrester Research Inc.
  • IBM Annual Reports
  • Microsoft Annual Reports
  • I Media LLC 2011 Provided by Syndigate.info an Albawaba.com company

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