After disappointing first quarter results, speculation is rife that IBM plans to restructure its European operations.
Big Blue's results saw turnover grow by three per cent to $22.9bn, compared with the same period last year. Profit increased from $1.36bn in Q1 2004 to $1.4bn. Despite the slight growth, IBM missed Wall Street expectations.
Sam Palmisano, chief executive of IBM, said: "We had difficulty closing transactions in the final weeks of the quarter. As a result, we did not achieve all of our goals for that period."
The results have prompted speculation over a possible restructuring. IBM chief financial officer, Mark Loughridge, was reported by analyst Ovum as saying that "sizeable restructuring activities" were in place.
Ian Wesley, research director at Ovum, said: "The rise in SME sales [at IBM] is a good sign. We expect to see a more effective European structure emerge soon.
"The question is whether the disappointing performance in services sales was a one-off, or a sign of a general market slowdown."
Shaune Parsons, managing director of IBM reseller Computer World Wales, said: "IBM hasn't hit its Q1 targets and its figures were down, but that was a trend felt across the whole IT market in Q1. It's just a blip on the map for IBM."
However, IBM storage rival EMC, which also reported its Q1 results recently, fared much better. The vendor grew turnover by 20 per cent to $2.24bn, while earnings grew 93 per cent to $270m.
Joe Tucci, chief executive of EMC, said: "Solid execution and the investments we have made to broaden our market reach played major roles. Our acquisition strategy is bearing fruit, strengthening our core business."
Jeanne Razzell, managing director of EMC reseller Systems Support, said: "EMC's software has done well. We would now like to see continued re-investment into EMC's products and its channel partners."
IBM was unavailable for comment.
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