Gerstner slashed R&D by $1 billion; for IBM, it may be a good thing; latest breakthrough shows scientists are refocused on products, customers; Einstein and eraser-heads
Article Abstract:
IBM's Louis V. Gerstner cut $1 billion out of the company's R&D budget when he became CEO. Gerstner's goal is for the research department is to create technology that the company puts on the market and profits from immediately, rather than spending money on research for research's sake. IBM's now is concentrating its efforts on areas in which it has extensive background and the necessary manpower, as opposed to spreading itself thinly over several areas. In 1995, IBM began combining research efforts between different labs that overlapped one another, and began expanding programs that promised to benefit customers the soonest, such as voice recognition software, data-storage technology and Internet-security software. IBM's 1997 R&D budget is $600 million and has a staff of 2,785, 10% to 15% of which the company estimates is working on long-term projects.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
User Contributions:
Comment about this article or add new information about this topic:
IBM reaches pact to end consent decree; Justice Department accord to phase out remaining restrictions over 5 years
Article Abstract:
The Justice Department has agreed to end the consent decree that IBM claims has cost it over $100 million per year for the last 40 years. The settlement, which will phase out the 1956 consent decree over a period of five years, must be approved by US District Judge Allen Schwartz. The consent decree restricted IBM's dominance of the data processing industry and was designed to increase competition. The agreement will eliminate restrictions on the IBM AS/400 minicomputer in four years, the restrictions on the company's mainframe business will be lifted in five years. Other restrictions, including a requirement for IBM to ship computers in the sequence in which orders are received, will be lifted immediately. This limitation cost IBM nearly 20 mainframe sales in 1994 when the company could not meet the delivery dates required by its customers.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Computer firms will register earnings gains; latest quarter's advances tied to solid corporate and individual demand
- Abstracts: The three phases of implementation. How to make software proposal cost comparisons. How to choose a financial software consultant
- Abstracts: Microsoft takes a stab at making PC's consumer friendly. Rare alliance on privacy for software; Microsoft and Netscape agree on standards
- Abstracts: Motorola posts profit below forecasts; data provide report card on damage from Asia to US multinationals
- Abstracts: On-line services make it hard for users to quit. Talk, talk talk; the latest chat services give users a whole new dimension