To hear Sam Palmisano tell it, everything is peachy. IBM's chairman and chief executive declared to shareholders in South Carolina at the annual meeting last month that his three years in charge had been marked by strong progress.

"In year one we articulated our point of view and mobilised the company," he said. "In year two, scores of clients were moving forward . . . Now, in year three, we are gaining momentum in our client engagements . . . Our confidence grows every day."