Despite a dour economy, IBM demonstrated its strength in the information technologies sector with an 8 percent improvement in earnings through its most recent quarter.
Meanwhile, on a busy day for three of RTP’s major tech employers, Cisco and Nortel rolled out storage area network campaigns in attempts to capitalize on one sector of IT spending that is growing. Cisco also disclosed plans to beef up profits by its resellers.
And, Frank Plastina, one of RTP’s best known tech executives when he led Nortel’s big RTP operation before leaving the firm last year, has a new job. The News & Observer quotes Plastina as saying he has joined Warburg Pincus private equity firm.
Plastina will have an office in New York but live in Cary, according to The N&O. He will help the firm review technology and communications investment opportunities, the paper said.
The Triangle Business Journal first reported Plastina might join Warburg Pincus in February.
Services drives revenues
IBM cited a 24 percent increase in service revenue, or $10.2 billion, as a driver in its increase of revenues to $20.1 billion. Big Blue did miss earnings estimates by a penny, coming in at 79 cents, or $1.4 billion.
First quarter 2002 totals were $1.2 billion, or 68 cents per share.
Its stock closed up $1.32, to $80.7, on Monday before the earnings announcement.
A key in IBM’s service growth was its recent acquisition of PricewaterhouseCooper’s consulting and services practice in 2002. IBM recently won two service deals worth more than $2 billion and noted in a conference call that many PWC consulting customers, which had left PWC, had been won back.
Cisco, Nortel battle
With new federal government requirements for the protection of patient health records (HIPPA) taking effect on Monday and the implementation of homeland security bills, more and more companies are moving to meet more stringent data backup and security efforts.
Storage equipment sales were up 12 percent to $5.4 billion in the fourth quarter, even though sales for the tear were down 15 percent overall, CNET News Service reported.
To capitalize on those, Nortel and Cisco disclosed some changes.
Nortel announced Monday that it has struck a partnership with EMC and Legato to provide backup data center equipment. According to CNET, Nortel will provide Optera Metro 5200 networking gear as part of a comprehensive storage solution in conjunction with EMC and Legato.
Cisco, meanwhile, announced three storage area network products that capitalize on either less expensive Internet Small Computer Systems Interface (iSCSI) or Fibre Channel over IP (FCIP) protocol.
Also Monday, Reuters reported that Cisco would announce today incentives to its reseller partners at a meeting with them in Chicago. Among those are financing options to help drive Cisco products into small and medium businesses and incentives for meeting sales goals.
“My No. 1 goal at the moment is to fix partner profitability,” Paul Mountford, who leads Cisco’s global distribution efforts, told Reuters.
Reuters pointed out that resellers now account for 92 percent of Cisco sales, up from 10 percent just four years ago.