IBM Reports 15th Straight Quarter of Revenue Declines
IBM has just released its quarterly revenues and the biggest highlight from the report is IBM’s 15th straight quarter of revenue declines.
IBM is finding that cloud is both a source for pain and gain on its quarterly reports. Cloud consisted of 35% of IBM’s total revenue. Quarterly cloud revenue actually rose 43% to $10B. Nonetheless, total revenue fell by 8.5% in the 4th quarter of 2015.
IBM CEO Ginni Rometty has continued to cut out non-cloud related business verticals from the Big Blue portfolio, thus allowing IBM to focus on its next generation cloud products such as BlueMix.
“The divestitures allowed Ms. Rometty to double down on new lines of business including the company’s own Bluemix cloud computing services and its Watson artificial intelligence software,” says Robert McMillan from the WSJ.
“The rise of cloud computing is the company’s chief emerging threat, as Amazon.com Inc.’s Amazon Web Services division and others take market share from IBM’s software, services and hardware businesses,” McMillian went on to say.
No matter how you look at the numbers, IBM’s revenues are falling sharply. 2015 earnings fell by 12% when compared to 2014’s number. IBM suffered 11% revenue decline in software, while suffering a 7% loss in services revenue. Hardware revenue only fell 1% during this time.
Depending upon who you ask, this could be cause for concern or it could just be another painful step in the transformation of IBM from a traditional hardware provider into the world’s top cloud provider.
On the positive side, IBM’s strategic imperatives division rose 10% when looking at year-over-year revenues. Fluctuations in the value of currency peg the true value of this number to be around 16%.
Strategic imperatives grew due to the popularity of Meteorix, Cleversage and SoftLayer.
“We continue to make significant progress in our transformation to higher value. In 2015, our strategic imperatives of cloud, analytics, mobile, social and security grew 26 percent to $29 billion and now represent 35 percent of our total revenue,” says Ginni Rometty, CEO of IBM.
