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IBM CEO Palmisano Charts Aggressive Course In Analytic Software

IBM CEO Samuel J. Palmisano wants software sales to account for half of the company's pretax profit within five years. He says IBM in 2015 "will be as dramatically different as IBM is today versus 2003," when software sales accounted for about 33% of profit."

Palmisano's particular focus is on high-margin programs called analytics that help clients sort through the increasing data generated in electronic form. These programs, for example, help retailers spot unexpected trends or governments to flag welfare fraud.

For a decade, the company has been shifting out of technology businesses where companies compete mainly on price. In software, it faces tough competition from companies like SAP and Oracle but it has been aggressively acquiring smaller firms and intends to spend $20 billion more on deals between 2011 and 2015, Spencer E. Ante reports.

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