IBM Eye

Revenue in the Lotus division grew 30 percent during the latest quarter compared with the final quarter of 2005, IBM reported last week. The company will demonstrate the service at its annual Lotusphere customer conference this week in Orlando, Fla.”

That’s what Ed Brill was referring to when he said he was very proud of the results his division posted this quarter. That really is wow kind of growth. It’s easy to dismiss IBM’s software because services is the major division at the company, but Lotus customers are almost apple-like in their devotion to it. And with Lotus Connections, IBM has signalled they will drive and inovate in the space. And the slick new look and feel of Lutus 8 due mid-2007 lays to rest much of the critcism that Lotus hasn’t kept up with the times. 5 years ago, customers were fearful that IBM was letting Lotus die a slow death, but IBM is in this space to win. Go big blue.

Also, only somewhat related, I was thinking that this should be added to my last post but I decided to add it here instead. Standard & Poor’s Corp. analyst Richard Stice said some people saw problems with the company’s hardware sales results. (IBM’s hardware-focused Systems and Technology group’s revenue only gained 3% year over year to $7.1 billion.) “There’s also some general profit-taking or negative sentiment associated with the technology sector at the moment,” Stice says. Noting things like IBM’s leading share position in a number of key sectors, Stice kept a strong buy opinion on the shares anyway. Stice wasn’t the only one to see more positives than negatives for Big Blue.

“While we acknowledge that there is no near-term catalyst for IBM shares, we are encouraged by multiple signs in the 4Q06 financial results of improvement in the struggling services business and strong momentum in software,” Citigroup analyst Richard Gardner said in a research note Jan. 19. (Citigroup has done business in IBM within the past five years, but Gardner certifies that the views in the report are not affected by compensation.)