Menu
IBM grows in cloud and data analytics but overall revenue slides

IBM grows in cloud and data analytics but overall revenue slides

The company’s acquisitions are beginning to pay off

IBM’s revenue continued to decline in the second quarter but growth in some of its strategic initiatives like cloud computing and data analytics suggest that the company may be on track in its transition plans.

The Armonk, New York, company said Monday that revenue from its new “strategic imperatives” like cloud, analytics and security increased by 12 percent year-on-year to US$8.3 billion.

That increase was, however, lower than the growth the company had reported in these businesses in the first quarter.

Cloud revenue – public, private and hybrid – grew 30 percent in the second quarter, while revenue from analytics grew 4 percent, revenue from mobile increased 43 percent and the security business grew 18 percent.

Over the last 12 months, strategic imperatives delivered close to $31 billion in revenue, and now accounts for 38 percent of the company's revenue, said Martin Schroeter, IBM senior vice president and chief financial officer, in a conference call.

The company has benefited from its over 20 acquisitions over the last year but has also seen some solid organic growth, he added.

IBM had set a target for itself of $40 billion or 40 per cent of its revenue by the end of 2018. The company doesn't need to grow at this rate in these businesses in order to get to the target, Schroeter said.

As it makes the transition to cloud and other technologies, the company plans to increase spending in areas like the capabilities of its Watson platform, its cloud data center capacity and acquisitions.

IBM has been expanding its Watson cognitive platform to newer areas, including a new cloud-based version of the cognitive technology trained on security.

The gains in the new focus businesses did not help to make up for dips in other revenue streams of the company. As a result, IBM’s overall revenue in the quarter fell by 3 percent to over $20 billion. IBM has posted revenue declines for many quarters.

Its profit in the quarter, according to generally accepted accounting principles, was $2.5 billion, down 29 percent year-on-year.

IBM’s systems revenue, for example, was down 23 percent in the quarter to $2 billion, while its Global Business Services, including consulting, global process services and application management, brought in revenue of $4.3 billion, down 3.0 percent from a year earlier.

Revenue for the company’s z Systems mainframes was down 40 percent in the quarter while margins improved, “consistent with where we are in the product cycle.”

Schroeter said. IBM acquired EZSource in the quarter to help developers quickly and easily update mainframe applications.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments