IBM Adds 30,000 New Jobs This Year

By Darryl K. Taft  |  Posted 2016-07-19 Print this article Print
IBM initiatives

For the second quarter of 2016, Schroeter said revenues from the company’s strategic imperatives—cloud, analytics and engagement—increased 12 percent year to year.

Over the last twelve months IBM's strategic imperatives delivered $31 billion in revenue, and now represent 38 percent of the company. Growth was led by cloud. Cloud revenues—public, private and hybrid—for the quarter increased 30 percent. And cloud revenue over the last 12 months was $11.6 billion. Meanwhile, revenues from analytics increased 5 percent, revenues from mobile increased 43 percent and revenues from security increased 18 percent.

Chris O’Malley, CEO of Compuware, which sells software to support mainframe users and developers, said of IBM, "They're trying to change a tire on a moving car; it's a hard effort to retool in a way that they’re trying to do."

He said IBM's strategic imperatives that are dominated by cognitive and analytics—with Watson being the centerpiece—as well as the movement of an increasing amount of work to the cloud, are bold moves for any one company to try to pull off at once.

Judith Hurwitz, president and CEO of Hurwitz and Associates, told eWEEK that at a recent IBM Cloud analyst meeting the IBM management team confirmed that they have adopted a cloud first strategy.

"I think that cloud will be a source of an increasingly large percentage of revenue as we are already starting to see," she said of IBM, noting that cloud software can be extremely profitable because of the recurring revenue combined with add-on services. "I think that the focus on cloud and cognitive are critical," she said.

Moreover, Hurwitz noted that she believes cognitive is not just a single tool or technology; cognitive is a foundational platform that will be used to create a large number of applications in areas such as healthcare and financial services. These will be big ticket solutions, she said.

It appears that the transformation is paying off, too. "I think that IBM is definitely making progress," Hurwitz said. "It is difficult to transform an enterprise company with as much legacy hardware and software as IBM has. It is not easy."

Meanwhile, IBM has no choice but to continue to rebalance or retrain its workforce as it makes its way through the transformation, said O'Malley.

"With the strategic imperatives that they're pursuing, they're trying to basically take the resources they have internally or go get new ones to pump up the volume in those areas," he said. "The risk that you run is that you so overly disrupt the core elements of the business that have made you incredibly successful for the last 100-plus years that IBM's been in existence."


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