IBM to outline computing vision

IBM will outline its view on the future of business computing at an exclusive meeting in New York City on Wednesday.

Sam Palmisano, IBM's CEO and newly elected chairman, is expected to address several hundred of the company's key customers, analysts and some journalists to describe the company's vision of huge computer networks with self-repairing machines, according to sources close to the company.

Ultimately, IBM foresees that the combination of these networks and other advances such as grid computing will allow businesses to buy computing power on demand, similar to the way electricity is purchased.

Many of the initiatives to be discussed have been in the works for some time at IBM. The company has built computing grids, which pool the collective data processing and storage capabilities of large networks, for the US Government's Department of Energy and for Oxford University to link cancer researchers in the UK.

IBM has also been pushing for about a year its autonomic computing initiative to build machines that can diagnose and repair problems. But it has recently stepped up efforts in those areas by establishing a new autonomic computing group to coordinate the research within the company.

Palmisano is expected to outline how the company will integrate the consulting business of PricewaterhouseCoopers, sources said, which IBM agreed to acquire in July for $3.5bn.

IBM could use a good pep talk. A sales decline in the first half of the year caused the company to temper its earning expectations for the year.

Palmisano, who took office on 1 March, has since been behind a number of manoeuvres to control costs while pushing ahead on research.

IBM has realigned its businesses, including the Technology Group, while selling off its hard drive business and several other smaller operations. Cost-cutting measures have also included the elimination of 15,000 jobs, or about five per cent of its workforce.

The efforts have helped: IBM recently posted flat net income and better-than-expected profit for the third quarter.

During Palmisano's address on 15 May, he told analysts IBM needs to cut costs and become more efficient. Now that he's realigned some of the businesses, the meeting in New York will focus on the future - the good times ahead that IBM sees coming once the industry turns around.

John G. Spooner writes for News.com