Taken from: http://www.businessweek.com/articles/2012-03-06/how-ibm-wooed-wall-street
IBM, known at one point for the IBM PC (which it sold off some time back); and big hardware (mainframe computing); has really reinvented itself as a technology services company.
The article notes: "The answer to that is less sexy than IBM might have you believe. The company, with annual revenue of $107 billion, still makes tens of billions of dollars per year selling traditional data-center hardware and software. In fact, Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., estimates that about 20 percent of IBM’s revenue and 40 percent of its profits can be traced to hardware, software, services, and financing on mainframes, the grizzled veterans of corporate computing. Such machines are not analytics dynamos but rather workhorses crunching away at the most mundane tasks. The bulk of the rest of IBM’s business revolves around high-profit software and services, in which the company deploys tens of thousands of people to customers’ sites for what can be very lengthy technology installation and consulting engagements."
Services - especially long term contractual services at client sites is lucrative - and IBM has done well with that - and has a period of steady revenue growth (that keeps investors / Wall Street happy).
Plus IBM has remade its image - to a 'smarter / greener' company - truly 'good guys' - and it didn't hurt to have a winner with Watson on Jeopardy!!!
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