While suffering from 22 straight quarters of declining revenue, IT giant IBM has set its foot strongly in the global could computing business as it reported its first revenue growth in five and half years.
The cloud revenues of the company saw a rise of 24 per cent to $17 billion in 2017 and noted a rise of 30 per cent to $55 billion in the fourth quarter.
This has established the company as one of the major players in the enterprise-cloud market.
IBM clocked a total revenue of $79.1 billion and the cloud services of the company now account for over 21 per cent of the total revenues. The focus on cloud computing reflects the reinvigorated technology and market focus pf IBM.
Cloud, security, analytics and mobile are the “strategic imperatives” of IBM and these have seen a growth of 14 per cent in the fourth quarter and make up about 50 per cent of the revenue of the company. This is in addition to the cloud business that had helped the company break a 22 quarter revenue drop jinx.
There have been severe critics of IBM who had given up hope of the company and said that IBM had lost its way. But the resurgence that has been exhibited by the company in a sector that is rapidly changing and evolving is something that can hardly be seen. Critics also said that IBM did not possess the finances to invest in advanced technology and that it was overinvested in services. They also said that the company had failed to understand the cloud market.
“During 2017, we strengthened our position as the leading enterprise cloud provider and established IBM as the blockchain leader for business,” said Ginni Rometty, IBM chairman, president and chief executive officer, in a press release announcing its financial results. She added that IBM is “uniquely positioned to help clients use data and AI to build smarter business.”
The company also highlighted the major achievements of the company in 2017 in the cloud computing segment.
Revenue of $9.3 billion was generated in 2017 by the “as a service” portion of IBM’s cloud business. It is expected that this “as a service” slice of the cloud business would account for $10.3 billion in 2018 based on the fourth quarter results. In the fourth quarter, there was a 30 per cent growth in the SaaS business of the company within that “as a service” segment.
A revenue of $7.8 billion was generated in 2017 by anoethr part of the cloud business of IBM – the “cloud conversion” business. According to IBM, this segment is designed to helps its clients to put to use comprehensive cloud solutions. There was 11 per cent rise in the revenues of the four “strategic imperatives” of the company at $36.5 billion.
“2018 will be all about reinforcing IBM’s leadership position in key high-value segments of the IT industry, including cloud, AI, security and blockchain,” said CFO and senior vice-president James Kavanaugh in the press release.
“So not only are we building and moving new SaaS properties into the cloud—which have great margins—and not only are we building our Platform as a Service and building ecosystems around that, but we also have north of $120 billion backlog in our services business that we’re in the process of moving to the cloud,” Schroeter told the analysts per the earnings call transcript on SeekingAlpha .com.
(Adapted from Forbes.com)