The spending on pure research is trivial compared with IBM's profits. In its last financial year: "Total capital return to shareholders of $9.5 billion; dividends of $4.9 billion and gross share repurchases of $4.6 billion" http://www-03.ibm.com/press/us/en/pressrelease/48846.wss

IBM also spends a lot of money buying dozens of companies to bolster its results. These include These include Cognos ($5bn), Softlayer ($2bn), Netezza ($1.7bn), Kenexa ($1.4bn) and Trusteer ($1bn). http://www.zdnet.com/article/ibm-vs-microsoft-and-the-battle...