Big Is In Again, Ibm Chief Tells Analysts

Large computer systems, which seemed out of vogue three years ago, are back in high demand partly because of the growth of the Internet, the chief executive of IBM said Monday.

“The industry is coming back our way,” Louis V. Gerstner Jr. said during his annual meeting with financial analysts.

Many products IBM has traditionally provided to businesses - big computers for sharing data, large database software and transaction processing programs - are also needed for working with public data networks like the Internet.

“We see good opportunity for growth of our products across the board,” Gerstner said.

Overall, IBM’s strategic plans are on target, he said, though sometimes execution is not. For example, supply and demand balances continue to be a problem with some hardware divisions, partly because of greater reliance on outside vendors for parts.

Gerstner’s presentation was the most upbeat he has made to analysts since becoming leader of the world’s biggest computer company in April 1993.

He also displayed combativeness, wiping at Microsoft Corp.’s Windows as the only computer operating system that isn’t “open,” meaning it can’t be modified by others. And he vowed that IBM would take back market share from data storage companies that have recently drubbed its products.

“I truly thought he exhibited certain elements of salesmanship that few other senior executives of IBM ever show,” said Bob Djurdjevic, president of Annex Research.

The presentation came just as investors seem to be backing away from run-up in IBM’s stock price. It had climbed 43 percent from the start of the year to early last week, reaching a high of $128.87-1/2.

It dropped sharply Friday when Compaq Computer Corp. announced it would squeeze its profit margin, putting pressure on IBM.

IBM recovered somewhat Monday until the last half hour of trading. Its shares finished down $2 to $116.12-1/2 .