IBM Q1 Revenues Flat as Systems, Cloud Surge

By Darryl K. Taft  |  Posted 2015-04-21 Print this article Print
IBM logo

In February, IBM showed investors that revenue across its strategic imperatives had been up 19 to 20 percent in each of the last five years. And now in the first quarter of 2015, revenue in the company’s strategic imperatives grew more than 30 percent, Schroeter said. Analytics was up more than 20 percent, social more than 40 percent, and mobile more than four times, he said.

Moreover, IBM’s cloud revenue was up over 75 percent year to year.

“On a trailing 12-month basis, our cloud revenue was $7.7 billion,” Schroeter said. “This is a demonstration of high growth in the higher-value cloud opportunities across public, private and hybrid. We had terrific performance in our cloud foundational and as-a-Service offerings. And we exited the quarter with an annual as-a-Service run rate of $3.8 billion. That’s up a billion and a half in the last year. The bulk of that growth was organic, the result of our deep insights into how our clients run their business.”

IBM’s SoftLayer cloud unit grew by solid double digits this quarter, improving sequentially and building on the company’s expanded data center capacity, IBM continued its steady progress with the opening of new centers in Montreal, Sydney, and Amsterdam.

“The best results percentage-wise in both cloud and analytics suggest that the company's strategies in those still- emerging markets are both successful and wise,” King said. “The fact is that IBM isn't the only IT vendor facing challenges in its core traditional markets but its proactive efforts under the leadership of CEO Ginni Rometty to gainfully explore new opportunities is working far better than most of its competitors. Overall, I consider this a solid quarter, though with admitted room for improvement. But the performance of IBM's cloud and analytics groups suggest better results in quarters to come.”

Schroeter also noted IBM’s launch of its new IoT unit and Watson Health during the quarter.

“In 2015 we’re shifting billions of dollars of spending to data, cloud and engagement to extend our differentiation in the market,” he said. “And in the last few weeks, we’ve announced two initiatives, Internet of Things and Watson Health that will further strengthen our position as a high-value innovation company providing solutions at the intersection of business and IT.”

Jennifer Hamel, an analyst with Technology Business Research, said with the creation of the IoT business unit, IBM solidifies its value proposition around delivering fast, domain-specific business outcomes through a combination of strategy and cloud and analytics technologies. Through its $3 billion investment over four years, IBM will integrate network, software, hardware and services components to create transformational IoT solutions for commercial clients, building on existing Smarter Cities and Smarter Planet initiatives and leveraging new partnerships such as The Weather Company, Hamel said.

“Strategic engagements with key technology partners pave IBM’s way toward future earnings power in high-demand areas such as big data analytics,” Hamel said. “TBR expects IBM will continue to amass partners with access to high-value data streams in areas such as geospatial technology (or perhaps expand alliances with existing data partners such as geographic information systems vendor Esri) as it builds out the IoT unit over the next four years. Such alliances enhance the company’s growing portfolio of repeatable IP-based solution offerings, while increasing exposure of IBM’s analytics-focused consulting and systems integration (C&SI) services in GBS (Global Business Services)."



Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel