IBM beats Incis blues with 19pc profit rise to $18.8m

10.00 am - by ADAM GIFFORD

IBM New Zealand showed it has 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.

That is in contrast to the global parent, where revenue fell last year 2.8 per cent to US$85.8 billion ($174.8 billion) and profits 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 to Inland Revenue.

The accounts show that IBM's purchase during the year of database company Informix cost the local subsidiary $854,075.

Goodwill on that acquisition was valued at $1.67 million.

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

However, Dinesh Kumar, country manager for IT analysts International Data Corporation, said services was 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," Kumar 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 has 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 theyhave dedicated themselves to 100 per cent.

"It is strategic selling."

During the year IBM strengthened its relationship with Air New Zealand. It also works 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.

As is its policy, the company refused to comment on the figures.