IBM turns round NZ operation

By ADAM GIFFORD

IBM New Zealand put the Incis disaster and the loss of the Telecom outsourcing contract well behind it with double digit revenue and profit growth last year.

Figures released to the Companies Office show the local branch of Big Blue increased revenue 11 per cent to $341.9 million and profit 19 per cent to $18.8 million.

This compared with the global parent where revenue last year fell 2.8 per cent to US$85.8 billion ($176 billion) and profit fell 4.5 per cent to US$7.7 billion.

The company paid just over $2 million tax, with historic tax losses of $1.1 million from Lotus Development New Zealand cutting its bill.

IBM's purchase of database company Informix cost the local subsidiary $854,075. Goodwill was valued at $1.67 million.

The accounts do not break down the figures between hardware and services, which includes software.

Dinesh Kumar, country manager for IT analysts International Data Corporation, said services were believed to be about half the business.

Kumar said the results reflected a turnaround under New Zealand manager Nick Lambert.

"It is all to do with proper management and having proper autonomy," he said.

"This hasn't happened overnight. They have been working on their structures, their processes, their systems for the past 2 1/2 years. There's no magic, just hard work."

Kumar said IBM had done exceptionally well on sales of high-end Unix computers, PCs and software.

"They have been selective about which business they have gone after, and the bits they have won they have dedicated themselves to 100 per cent. It is strategic selling."

IBM strengthened its relationship with Air New Zealand and also worked closely with New Zealand Post and Westpac bank, Kumar said.

"The market at the top end is consolidating in the right direction for IBM, so customers go to vendors like Sun, or HP, or IBM who are able to supply not only the boxes but the high-level strategic advice and implementation skills as well."

IBM has about 870 staff. The company refused to comment on the figures.