IBM says bye-bye to hardware and hello to the cloud

Here are two things you didn't know about IBM: More than 200,000 of its employees are located in the Netherlands, and it is the third-largest seller of software applications in the world.

OK, the first item isn't exactly correct; those 200,000 employees are only in Holland on paper -- it's a perfectly legal tax dodge. But the second item is exactly right, says Forrester Research analyst Andrew Bartels. By next year, he says, IBM's application business will be worth about $8 billion, behind SAP and Oracle and ahead of Microsoft, excluding sales of Office. "IBM simply doesn't like to talk about the application business because it makes its partners uncomfortable," Bartels tells me.