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Software to take half of IBM's total profit by 2010

Posted: 21 May 2007 ?? ?Print Version ?Bookmark and Share

Keywords:computer hardware? virtualization? operating system?

IBM Corp. said its software may account for nearly half of total profit by 2010, up from about 40 percent last year, as its shifts to more-profitable businesses from lower-margin segments such as computer hardware.

According IBM CEO Samual Palmisano, the company also expects "emerging county" revenue to double by 2010. Palmisano said efforts to improve profitability in services business, which accounts for about half of revenue, should boost profit margins by 2 percentage points by 2010.

In addition, the company expects so-called virtualization, a fast-growing newer technology that lets large computers run several OS simultaneously, to produce an additional $1 billion in gross profit in the next three years.

The mainframe maker's shares were down 45 cents at $105.42 in early trading on the New York Stock Exchange. The stock is up 29 percent this year as IBM boosted profit, driven by its higher-margin software businesses.

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