IBM revenues

In its first 100 years, IBM soldiered forward by dominating in America. But Big Blue's second quarter results -- particularly its strong growth in expanding markets -- show that the next 100 years will be all about global dominance.

Last week, IBM announced its Intelligent Operations Center for Smarter Cities, aimed at providing in one easy package a software platform for cities to use in monitoring and managing city resources. Trefis sees this as a potentially huge boost IBM's lucrative middleware business.

Microsoft used to be the most valuable tech company in the U.S. based on market capitalization. Apple took that crown away last year. Now, IBM has dropped the Redmond, Wash., giant into third place. So what's IBM doing right, and what's Microsoft doing wrong?

IBM reported earnings of $2.82 per share for the third quarter, compared with $2.40 a year ago. Analysts were expecting EPS of $2.75, according to Thomson Reuters. Global services revenues of $9.5 billion were well below the $12.8 billion forecast.