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April 24, 2001 - IBM's Annual Meeting 2001 - Savannah, Georgia, USA

At its annual shareholder meeting here this morning, IBM's Chairman and CEO Lou Gerstner described the company's strong recent performance and painted a confident, upbeat view of its prospects for future growth

The shareholders met at 10 a.m. at the Savannah International Trade and Convention Center for the purpose of conducting matters of business and to hear the chairman's report on the state of the company. Three hundred and ninety shareholders attended. (IBM regularly holds its shareholder meetings in a different city each year so that investors from different parts of the country may have an opportunity to attend.)

Prior to his report, Lou called the meeting to order and welcomed the attendees, which included the company's board of directors. This annual meeting marked the first shareholder gathering for President and Chief Operating Officer Sam Palmisano and for Vice Chairman of the Board John M. Thompson as board members.

Four proposals were introduced and voted on:

• All 15 directors nominated were elected for a term of one year, to serve until the next annual meeting.
• PricewaterhouseCoopers LLP was ratified as independent auditors of the corporation for a period of one year.
• A stockholder proposal on board service was defeated.
• A stockholder proposal on pension and retirement medical benefits was defeated.

After telling the shareholders about IBM's intention to make a US$1 billion acquisition of Informix Corporation's database assets, Lou used his chairman's report as an opportunity to explain to the company's owners why he feels as confident about IBM's future as at any time in his tenure as its chairman. He said his confidence was based on three reasons in particular: "an alignment of what's happening in the world of business, in the information technology industry, and what's happening inside IBM."

Noting that, in his meetings with customers, the number-one issue for them continues to be e-business, Lou said, "A year ago, you couldn't have a conversation about e-business without getting into all that 'new economy' nonsense. Fortunately and thankfully that frenzy is behind us."

Customers are focusing on the right things, he said: building bulletproof infrastructures, redesigning their business processes, and then integrating those processes.

This serious work of e-business, in contrast to the "wacky, highly speculative schemes" of the dot-com distraction, is good news for IBM, thanks to the things we do well, such as servers, database and transaction systems, large-scale storage, and the broad array of technology services we're engaged in.

The strategic decisions made in the last few years have also helped the company as it competes in a highly competitive industry. Lou reminded shareholders that, less than a decade ago, many people thought that specialized niche companies would dominate information technology. The decision to keep the company together, he said, was the most important.

Additional decisions have positioned IBM for a positive outlook going forward, he said. Among them, rebuilding the server business; adopting industry standards, common technologies and architectures; our focus on middleware in the software business; chip technology and manufacturing; and especially our now-essential services business.

"All told, services accounted for about half of our total revenue growth in the first quarter," Lou said. "That's not just a security blanket for stockholders it's a leadership position in the single-most-important growth segment in the technology industry."

The third reason for his confidence in IBM going forward was in seeing IBMers' ability to execute whether in the work to remake existing businesses, as in our software, server, and technology offerings; in decisions to get into new businesses like services; or in decisions to withdraw from other businesses.

"Today, the agenda for IBM is dominated by this once-in-a-lifetime opportunity," Lou said, in closing. "To separate from the pack, to stand apart, and to lead."

After reporting on the results of shareholder balloting, the chairman called the business meeting to a close, and then answered questions from stockholders before adjourning the meeting at approximately 11:20 a.m.