In recent conversations with IBMers, one theme nearly always came up: this is a big company with deeper pockets than any other company in the tech business. The blunt message: recession or no recession, it’s only a matter of time before less well endowed rivals buckle.

CHAIRMAN'S Letter to STOCKHOLDERS

Marketing spin, to be sure–but also a reflection of the constellation of forces in an increasingly weakened tech industry. And now, CEO Sam Palmisano has made it official.

In a letter to shareholders released in conjunction with IBM’s annual report, Palmisano says that the company is “positioned to lead in the era that lies on the other side of the present crisis.”

“We will not simply ride out the storm,” he said. “Rather we will take a long-term view, and go on offense.”

What this means in practice is that the company will attempt to leverage its diversification into areas such as cloud computing and services as a competitive weapon against rivals with weaker benches. IBM also is betting that its big presence overseas will help it better ride out a recession that has led to a slump in IT demand in the United States. About 65 percent of its revenues came from outside the U.S. last year.

Perhaps the most interesting part of Palmisano’s letter is his declaration that IBM isn’t planning to retrench until the global economy recovers:

Many companies are reacting to the current global downturn by drastically curtailing spending and investment, even in areas that are important to their future. We are taking a different approach. Of course, we must continue to improve our competitiveness. But while we maintain discipline and prudence in the near term, we also maintain the discipline to plan for the future. We’re not looking back, we’re looking ahead. We’re continuing to invest in R&D, in strategic acquisitions, in growth initiatives–and most importantly, during these difficult times, in our people.

In other words, we will not simply ride out the storm. Rather, we will take a long-term view, and go on offense.

Separately, IBM disclosed in a filing that it awarded Palmisano $21 million in salary, bonus, perks, and stock-based awards last year.

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IBM has teamed up with the Swiss Federal Institute of Technology (ETH) to build a super efficient water cooled supercomputer which could lower the system’s carbon footprint by a whopping 85 per cent.

The Aquasar system, which boasts two IBM BladeCenter servers in one rack and peak performance of 10 Teraflops, will use chip-level water-cooling as well as reusing any excess heat to warm the university’s buildings.

Each of the supercomputer’s blades will be cooled by a separate liquid cooler on each processor and will also be connected to the whole system via a series of input and output pipelines, or a “fine network of capillaries”. This will mean the water can come extremely close to the processors without damaging anything. It will need just 10 liters of water for cooling pumped at a flow rate of about 30 liters per minute.

Water temperature will be at 60 degrees C – a fair bit under the chip’s maximum 85 degrees C – and the cooling system itself will be a closed circuit. As water is heated by the chips, it will be pushed through a heat exchanger which will transfer the heat into the university heating system. The system is power efficient too, guzzling just 10KW of energy, compared with the average 257KW used by supercomputers in the top 500 list.

Dr. Bruno Michel, a top boffin at IBM’s Zurich Research lab noted “If we capture and transport the waste heat from the active components in a computer system as efficiently as possible, we can reuse it as a resource, thus saving energy and lowering carbon emissions.”

The supercomputer, which should be completed by 2010, will apparently be used for research in nanotechnology and fluid dynamics.

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All the latest buzz is about SSDs in terms of new and faster storage solutions compared to the still dominant HDDs. While magnetic hard disk drives offer fairly large capacities at very reasonable prices, they are mechanical devices and subject to slow access times and possible failure. Solid state drives are already quite a bit faster, but this speed comes bundled with a hefty price tag. Especially, if you are interested in an SLC SSD.

IBM seems to have an interesting new technology, based on recently discovered spintronic phenomena, in the works that could change all that:

“One of these is a means of using spin currents to directly manipulate the magnetic state of nano-scale magnetic regions – magnetic domain walls – within magnetic nano-wires. This device, the magnetic race-track, is a powerful storage-class memory which promises a solid state memory with the cost and storage capacities rivaling that of magnetic disk drives but with much improved performance and reliability. This could provide another revolution in our ability to access and manipulate digital information.”

“This simple design has the potential to combine the best qualities of other ­memory technologies while avoiding their drawbacks. Because racetrack memory stores data in vertical nanowires, it can theoretically pack 100 times as much data into the same area as a flash-chip transistor, and at the same cost. There are no mechanical parts, so it could prove more reliable than a hard drive. Racetrack memory is fast, like the dynamic random-access memory (DRAM) used to hold frequently accessed data in computers, yet it can store information even when the power is off. This is because no atoms are moved in the process of reading and writing data, eliminating wear on the wire.

If the design proves successful, racetrack memory could replace all other forms of memory, and Parkin will bolster his status as a ­magnetic-memory genius. After all, his work on giant magnetoresistance, which led to today’s high-capacity hard drives, transformed the computing industry. With racetrack memory, ­Parkin could revamp computing once more.”

Stuart Parkin, is manager of the magnetoelectronics group at the IBM Almaden Research Center in San Jose, California.

We reported about a possible acquisition of Sun by IBM, but Sun’s board rejected the offer from the industry giant close to two weeks ago. Well, as it turns out, instead Oracle tied the knot with them yesterday and bought Sun for $7.4 Billion, although Sun brings $1.8 billion of net cash to the deal, making the net cost to Oracle as low as $5.6 billion.

“We’re thrilled to be acquired by Oracle and have our technologies, innovations and communities as part of the Oracle vision,” Scott McNealy, Sun’s chairman, said.

The acquisition will allow Oracle to combine enterprise hardware and software into a total solution, it said. “Oracle will be the only company that can engineer an integrated system — applications to disk — where all the pieces fit and work together so customers do not have to do it themselves,” Ellison said. “Our customers benefit as their systems integration costs go down while system performance, reliability and security go up.”

Apparently, the talks between International Business Machines Corporation (IBM) and Sun Microsystems, Inc., which were going on during the last few weeks, are in their finalizing stages. Reportedly, I.B.M. is offering $9.50 a share which would value Sun at close to $7 billion.

Sun is well known for its Java technology platform, the Solaris Operating System, the MySQL database management system, Sun StorageTek storage solutions, the UltraSPARC processor, and for being one of the largest sellers of servers.

There could be quite a few far-reaching consequences because of this acquisition:

“I.B.M.’s acquisition of Sun would disrupt that long partnership with Oracle. I.B.M. could also undercut Oracle by more actively promoting the free MySQL software, which has become the most popular database software with Internet companies.

Hardware inherited from Sun could present antitrust concerns. I.B.M. faces an antitrust complaint from T3 Technologies over its dominance in the mainframe market. By buying Sun, I.B.M. would gain close to total control over robotic tape storage devices used to file data on mainframes.

Sun has a sales and technology partnership with Fujitsu for the sale of Unix servers. If I.B.M. buys Sun, Fujitsu and Hewlett-Packard will be the combined company’s only major competitors in the Unix market, a possible concern for regulators here and in Europe. Sun faces a patent infringement lawsuit from the storage maker NetApp and has countersued. NetApp has a sales pact with I.B.M.”

As an early result, shares of I.B.M. rose more than 3 percent on Thursday, to $100.82, while Sun’s shares rose more than 2 percent, to $8.21. [via New York Times]