IBM - Top 20 Innovator of the Innovation Index for 2009

"To be honest, I didn't believe they could show something like this -- I think the results they posted were stellar," said Peter Misek, an analyst with Canaccord Adams. "They just executed really well -- really, really, really well."

IBM (NYSE: IBM) predicted at least $9.20 per share in profit in 2009, a full 45 cents per share better than the average estimate of analysts polled by Thomson Reuters. Is IBM for real?

IBM's net income for the 4th quarter was $4.4 billion, or $3.28 per share - beating the analyst estimates of $3.03 per share by a full 25 cents! WOW! Net income showed 12 percent profit increase from $3.95 billion, or $2.80 per share, in the same period a year earlier.

Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world

IBM's key revenue generator: $17.2 billion in new services contracts. IBM is executing quite efficiently in this trying economy, and has a workforce of 400,000 employees worldwide. IBM did not post a sales gain though. The sales were down sequentially by 1%, adjusted for currency fluctuations, from the previous year's quarter.

"A strong fourth quarter capped an outstanding year. In 2008 IBM performed well in an extremely difficult economic environment. Clearly our strategic transformation --- migrating to the more profitable segments of the industry, investing in growth regions of the world, and driving productivity through global integration --- is continuing to pay dividends," said Samuel J. Palmisano, IBM chairman, president and chief executive officer.

IBM gets the nod as a Top 20 Innovator of the Innovation Index for 2009. Bravo, IBM!!

The Innovation Index Reports
Introducing The Innovation Index
The Innovation Index 2008 Performance
The Iron Men of Stocks
Annual Report 2007 - The Innovation Index gains 66%
Measuring Business Innovation Success
Top 50 Innovative Companies in the world
Annual Report - Chapter One - Total Innovation Activity
Annual Report - Chapter Two - The Top Innovator
Annual Report - Chapter Three - The Innovation Insights
Innovation and Stock Performance Correlation
Future earnings guidance, A leading indicator
Smart Investing In Tough Economic Times
To Sell Or Not To Sell - You Decide
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies

About the Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

References:
IBM Press Release
AP Story

IBM completes $5 billion Cognos acquisition, announces exciting new Information On Demand strategy

IBM (NYSE: IBM) is one of the Top 20 Innovators of The Innovation Index. IBM made several key announcements today regarding the completion of $5 billion Cognos acquisition:

An array of new and enhanced joint IBM-Cognos solutions, products and services from across the company that enable organizations of all sizes to gain better insights from their data, improve decision-making, and optimize business performance, including:

--  10 new and enhanced IBM solutions for banking, retail, healthcare,
government, life sciences and manufacturing industries.
--  Six pre-integrated IBM-Cognos product offerings that enable companies
to use business intelligence to improve overall business performance.
--  Information on Demand Infrastructure Services to help clients plan,
design and deploy a resilient enterprise data, storage and content
management environment.

IBM also announced a new capability called IBM Dashboard Accelerator software using Cognos "builder" that will help companies extract business data and present it in new, different and more meaningful contexts through their IBM WebSphere Portal applications.

Further, IBM re-iterated the importance of Cognos acquisition on Future Earnings per Share growth. The acquisition supports IBM's objective for earnings-per-share growth through 2010.

In a letter to IBM business partners, Ambuj Goyal, General Manager of Information Management Software, wrote:

"I am very pleased to announce that IBM has completed the acquisition of Cognos. Cognos will be integrated into the IBM Software Group as part of the Information Management division where the synergies and market messages are most closely aligned. The addition of Cognos complements IBM Information On Demand by unlocking the business value of information for competitive advantage, and further builds on leadership by IBM in delivering SOA solutions.

I am very excited about the opportunities that lie ahead for the combined IBM and Cognos organization. With our collective strengths, we look forward to accelerating innovation, creating value, and driving business success.

Cognos maintains a vibrant and growing Business Partner community, with deep skills, industry knowledge, and a roster of proven, scaleable solutions built on the Cognos technology. The Cognos product portfolio will continue to deliver significant value to IBM and our customers..."

Bottomline:

IBM spent five times Cognos annual revenue of about $1 billion to acquire Cognos at $5 billion. Without counting the integration, distribution and operational efficiencies that IBM provides, the Cognos acquisition will add at least $1 billion in additional revenue in 2008. Add to this $1 billion, the actual benefits that an IBM acquisition will provide Cognos customers, joint IBM and Cognos customers, and future customers of Information On Demand solutions. IBM has quite possibly found the diamond that could potentially generate $2 billion to $4 billion in additional revenue in the next three to five years if the global market for on demand information expands. Cognos could be perhaps IBM's dark horse over the next several years.

Invest in the Innovation Index Fund

We launched the new Innovation Index Fund in December, 2007 that invests in the Innovation Index including IBM and returned 66% in 2007, and 174% in the previous five years. If you want to learn more about the Innovation Index Fund, fill out your contact information at the bottom of this form: http://www.innovationindexgroup.com/invest.html

The Innovation Index Reports:

Invest in The Innovation Index - Invest in the brand new Innovation Index Fund
Introducing The Innovation Index Fund - Invest into The Innovation Index
Top 50 Innovative Companies in the world - 2007 Report on Top 50 Companies
Annual Report - Chapter One - Total Innovation Activity - 2006 Annual Report One
Annual Report - Chapter Two - The Top Innovator - 2006 Annual Report Two
Annual Report - Chapter Three - The Innovation Insights - 2006 Annual Report Insights
Innovation and Stock Performance Correlation - The Innovation Index and Stock Performance

About The Innovation Index

The Innovation Index introduced in December 2006 is a weighted stock price index of the top 20 Innovators in North America.

The Innovation Index returned 66% in 2007, and returned 174% over the previous five years (2002-2006). This assumes equal investment in each stock of The Innovation Index as of December 31, 2001. An average of $100 invested in The Innovation Index on December 31, 2001 returned $454 as of December 31, 2007. By comparison, $100 invested in S & P 500 returned 28% or $129, $100 invested in NASDAQ returned 34% or $136, and $100 invested in the Dow Jones Index returned 30% or $131 through December 31, 2007. The Innovation Index beats the S & P 500, NASDAQ and Dow Jones Index by more than seven times over the past six years.

Alphabetical list of the Top 20 Innovators of The Innovation Index for 2008 and their stock ticker symbols:

3M Company - (NYSE: MMM)
Amazon.com, Inc. - (NASDAQ: AMZN)
America Movil - (NYSE: AMX)
Apple Inc. - (NASDAQ: AAPL)
AT&T Inc. - (NYSE: T)
Best Buy Co., Inc. - (NYSE: BBY)
Cisco Systems, Inc. - (NASDAQ: CSCO)
Costco Wholesale Corporation - (NASDAQ: COST)
eBay Inc. - (NASDAQ: EBAY)
General Electric Co. - (NYSE: GE)
Google Inc. - (NASDAQ: GOOG)
Hewlett-Packard Co. - (NYSE: HPQ)
Intel Corporation - (NYSE: INTC)
International Business Machines Corp. - (NYSE: IBM)
Merck & Co., Inc. - (NYSE: MRK)
McDonald's Corporation (NYSE: MCD)
Microsoft Corporation - (NASDAQ: MSFT)
NIKE, Inc. - (NYSE: NKE)
Research In Motion Limited - (NASDAQ: RIMM)
The Proctor & Gamble Company - (NYSE: PG)

The Innovation Index will analyze the positions and standings of the Top 20 Innovators at the end of each year. For 2008, there will be no further changes in The Innovation Index.

Disclaimer: The Innovation Index Group, Inc. invests in the stocks comprising The Innovation Index.

References:

IBM Press Releases and Business Partner Communication

60,000 Leagues under the Microscopic Sea - Nanometer Innovations at IBM

IBM (NYSE: IBM) is one of the top 20 innovators of The Innovation Index.

Innovation:

IBM announced that the IBM researchers at its Almaden Research Center in San Jose, CA have demonstrated magnetic resonance imaging (MRI) techniques to visualize nanoscale objects. According to IBM, "this technique brings MRI capability to the nanoscale level for the first time and represents a major milestone in the quest to build a microscope that could "see" individual atoms in three dimensions."

Key Technology:

Using Magnetic Resonance Force Microscopy (MRFM), IBM researchers have demonstrated two-dimensional imaging of objects as small as 90 nanometers, a key advancement on the path of 3D imaging at the atomic scale.

MRFM offers imaging sensitivity that is 60,000 times better than current magnetic resonance imaging (MRI) technology. MRFM uses what is known as force detection to overcome the sensitivity limitations of conventional MRI to view structures that would otherwise be too small to be detected.

How did they innovate?

To achieve this, the research team represented by H. J. Mamin, M. Poggio, C. L. Degen and D. Rugar at IBM Research Division, Almaden Research Center, and the Center for Probing the Nanoscale, Stanford University, developed specialized magnetic tips for their microscope, optimizing their ability to manipulate and detect the very weak magnetism of atomic nuclei.

Comparison:

Conventional medical MRI typically operates on a scale at least 1,000 times coarser; even the most specialized MRI microscopy is limited to about 3 micrometers, or 3,000 nanometers. Compare this to IBM's advancement to 90 nanometers, through imaging sensitivity that is 60,000 times better than current magnetic resonance imaging (MRI) technology.

With this latest achievement, the team is now able to make images with as few as 10(3) atoms as opposed to the 10(8) atoms required to make an image with today's MRI technology. This improved sensitivity extends MRI into the nanometer realm.

Applications:

"Our ultimate goal is to perform three-dimensional imaging of complex structures such as molecules with atomic resolution," said Dan Rugar, manager, Nanoscale Studies, IBM Research. "This would allow scientists to study the atomic structures of molecules -- such as proteins -- which would represent a huge breakthrough in structural molecular biology."

According to IBM, this achievement could eventually have major impact on the study of materials -- ranging from proteins and pharmaceuticals to integrated circuits -- for which a detailed understanding of the atomic structure is essential. Knowing the exact location of specific atoms within tiny nanoelectronic structures, for example, would enhance designers' insight into manufacture and performance. The ability to directly image the detailed atomic structure of proteins would aid the development of new drugs.

Background:

IBM Research has a distinguished history in developing microscopes for nanoscale imaging and science. Gerd Binnig and Heinrich Rohrer of IBM's Zurich Research Laboratory received the 1986 Nobel Prize in Physics for their invention of the scanning tunneling microscope, which can image individual atoms on electrically conducting surfaces.

The report on this work, "Nuclear magnetic resonance imaging with 90-nm resolution," by H. J. Mamin(1), M. Poggio(1)(2), C. L. Degen(1) and D. Rugar(1) at IBM Research Division(1), Almaden Research Center, San Jose, California and the Center for Probing the Nanoscale, Stanford University(2) will appear in the April 22 issue of Nature Nanotechnology.

Bottomline:

IBM Research has created a factory that creates potential game changing innovations such as this particular Nanometer Innovation. The applications of such technology are far and wide, and the success of this endeavor will lie in the commercialization of these applications in the coming years. IBM has quite possibly hit a home run with this technology marvel.

Source: http://www.research.ibm.com/ .

(The nanometer realm is typically considered to be at dimensions below 100 nanometers; a nanometer is a billionth of a meter, the length spanned by about 5-10 atoms.)