Magazine

Playing It Safe at IBM?


You say that Samuel J. Palmisano ("IBM's new boss," Cover Story, Feb. 11) is "not the typical Big Blue exec" and that "instead of making safe bets, he has repeatedly challenged old thinking and taken risks." I am sure that today's IBM stakeholders wish him well and that the future risks he will take will be rewarding. Rewarding as the "safe bets" Thomas J. Watson Jr. took when he introduced IBM to the computer age--with a projected market of less than a dozen machines--and again when he bet the company on System 360. Or rewarding as Frank T. Cary's "safe" bet on a computer for the home with open architecture, a first for IBM. Welcome, Sam, to the leadership of a company with a long tradition of leaders who took risks that, with the passage of time, became accepted as "safe bets."

Ray Wilfinger

Cary, N.C.

I'm sure Louis V. Gerstner Jr. did a good job during his time at IBM, but I'm curious about why he and his team did not exploit the business potential of Deep Blue's software, which in May, 1997, beat Gary Kasparov, the then-champion of international chess. For Deep Blue to have defeated Kasparov without qualification, IBM would had to have developed a class of software that would be capable of eliminating the need for bar codes--an achievement that would be worth several trillion dollars a year to its owners in the initial years and untold amounts as time went on. If the Kasparov defeat was unqualified, and IBM failed to transfer this success to business software, is Palmisano going to set this situation straight?

Thomas Wulff

Stoughton, Mass.

Your story identifies Thomas J. Watson as the founder of IBM. Charles R. Flint, head of the conglomerate Computing-Tabulating-Recording Co., was actually the founder. Watson joined in 1914 as general manager and was named president a year or so later. The reason Watson came on board: Flint owned the patent to the Herman Hollerith punch-card machine.

Eric S. Bleicher

New York

At the 1955 Future Farmers of America convention in Kansas City, I rode up in an elevator with Thomas Watson and a few of his associates and overheard him say in a squeaky voice: "I keep telling my people that no matter how small the loss, it's not a profit."

Walt Buescher

Pewaukee, Wis. The "Bush Doctrine" of "helping weaker countries fend off terrorism" doesn't sound so very different from "helping weaker countries fend off Communism" ("What kind of superpower?" Special Report, Feb. 11). "Weaker" countries need some good examples of how democracy, negotiation, and international cooperation can make them stronger, not yet another example of how bomb tonnage can be used as a false metric for progress or victory.

Paul DeGroot

Medina, Wash "What's the truth about Walter Hewlett?" (Information Technology, Feb. 11) accurately depicts my friend and colleague as serious-minded and being thoughtful. I have, however, been offended by Hewlett-Packard management's effort to dismiss him as a "musician and academic." He is all that and much more--including having a brilliant analytical mind and a thorough understanding of technology and the rapid pace of change.

For the past five years, I have worked closely with Walter B. Hewlett on the Board of Overseers of Harvard University. He headed the committee on technology and has been immensely helpful to Harvard [and] an outstanding member of the board.

With Walter Hewlett's vast family holdings of HP stock, he has far more incentive to do the "right thing" for shareholder value than HP's existing management. His actions are solely directed at increasing shareholder value. He is devoid of personal aspirations in these matters. I applaud his courageous stand against a management that has unlimited access to the corporate checkbook to pay for full-page advertisements seeking to portray opponents as being "out of touch" and for the "status quo."

Richard H. Jenrette

New York

Editor's note: The writer is co-founder of Donaldson, Lufkin & Jenrette Inc. and former CEO of Equitable Companies Inc. Like Enron director Wendy L. Gramm, Anne K. Bingaman [a Global Crossing Ltd. lobbyist] is the wife of a U.S. Senator ("Global Crossing tossed more cash around town than Enron," Washington Outlook, Feb. 11). What's more, Global Crossing was not the only telecom in trouble seeking Ms. Bingaman's services. She served on McLeodUSA Inc.'s board of directors from July, 1999, through 2000, while she was also chairman of Valor Telecommunications LLC, which owned a competing local-exchange carrier. Despite their connections to companies in trouble, both Ms. Bingaman and Ms. Gramm are talented women, qualified to serve as corporate directors. It is unfortunate that neither seemed to consider the justifiable perception of a potential conflict of interest.

Bryan Shockley

Dallas When the Enron debacle is over and done with, the people responsible will get a "shame-on-you" from Congress and a wrist slap from other authorities ("Enron Watch," Feb. 11). They'll walk away unrepentant and rich. There'll be a flurry of rhetoric about tighter accounting rules and more responsible corporate boards. And then a long silence until the next time. Looking for a sure thing? Bet on that.

Bruce Kettelle

Glenmoore, Pa. While I agree with his overall conclusion, Jeffrey E. Garten's argument for U.S.-backed efforts to increase Russia's oil production and exports could be successfully challenged ("Let's end our dangerous dependence on the Saudis," Economic Viewpoint, Jan. 28). With the memories of the Russian 1998 default gradually fading, Russian oil companies once again have access to inexpensive [and non-U.S.] sources of international capital. It could be argued that in the exchange of strategic geopolitical favors, Russia has already carried out its part of the bargain by not objecting to America's military presence in Central Asia and, generally, by supporting the America-led coalition in the war against terrorism.

Kirill Zenine

Schlumberger Oilfield Services

Sugar Land, Tex.


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