IBM’s quarterly growth rebound comes to an end – yet cloud revenues continue to tick over
So much for that run of quarterly growth: IBM’s latest financials show a 2% decline in revenues, yet cloud revenues continue to perform solidly.
Overall revenue was at $18.8 billion (£14.3bn) for the quarter, with cloud revenues at $19bn across the past 12 months. This is ticking over compared with the previous quarter’s figure of $18.5bn.
The company’s message, as this publication reported earlier this week, was focused around helping customers in the ‘emerging, high value’ segments of the IT industry – of which cloud is an integral part knitting it together.
“Our performance this quarter was driven by the offerings in hybrid cloud, in security, in digital, and in analytics and AI – a testament to our ability to deliver differentiated value to our clients through innovative technologies with the skills and expertise to implement these technologies,” said Jim Kavanaugh, IBM chief financial officer in an earnings call. “We see the results in our strategic imperatives revenue growth of 13% over the last 12 months.
“We also see this playing out in higher operating margin over the last few quarters, which supports both our long-term investment and return to shareholders,” Kavanaugh added. “With our success in these higher value areas and our focus on delivering consistent operational performance, we remain on track to our full-year expectations of earnings per share and free cash flow.”
Hybrid cloud was certainly the term of choice in the earnings call. Kavanaugh noted the statistic which the company pulled out with its recently released Multicloud Manager product – more of which shortly – around enterprises only being 10% to 20% through their cloud journey.
“Progress [is] slow by the lack of interoperability across cloud environments and concerns about the ability to manage data privacy and security in multiple cloud environments,” added Kavanaugh. “So clients need a cloud partner that can offer a hybrid cloud for workloads that cut across public, private and traditional, a secure cloud for mission-critical workloads and highly sensitive data and an open cloud to run complex, multi-cloud environments.”
Multicloud Manager, launched to fanfare earlier this week, aims to not provide ‘scale for the sake of scale’, but help customers launch new business services or enter new markets at pace. As John Considine, IBM general manager for cloud infrastructure services, put it when speaking to CloudTech in February, the company is positioning itself as ‘the enterprise cloud’ – putting emphasis on helping organisations grow through emerging technologies. Indeed, with Multicloud Manager, enabling workloads on AWS, Azure and more, this publication surmised the possibility of IBM accepting it was not going to overtake the big cloud infrastructure leaders.
This was by no means the only piece of news IBM announced this quarter. The company also had various initiatives in AI, with the launch of AI OpenScale technology to manage the lifecycle of all forms of AI applications and models, while on the business side IBM partnered up with CenturyLink in August to solidify enterprise connectivity in emerging markets.
You can read the full IBM investor release here (pdf).
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