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IBM Cloud Gains Aren't Enough

IBM saw brisk growth in its cloud and cognitive solutions business, but it wasn't enough to grow overall revenue, which declined for the 17th consecutive quarter in results reported Monday.

The good news is that IBM's self-described "strategic imperatives" -- including IBM cloud, analytics, security, cloud video services and Watson Health -- brought in $30.7 billion over the last 12 months, representing 38% of revenue. For the quarter, strategic imperatives revenue was $8.3 billion, up 12% year-over-year.

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Quarterly cloud revenue was $3.4 billion, up 30% year-over-year. Over the last 12 months, cloud revenue was $11.6 billion, with cloud as-a-service annual run rate of $6.7 billion in the quarter, up 50% year-over-year.

The bad news is overall revenue for the second quarter was $20.2 billion, down 3% annually. Non-GAAP net operating income was $2.8 billion, down 25% annually.

IBM is looking to go "beyond the traditional IT marketplace," Ginni Rometty, IBM chairman, president and chief executive officer, said in a statement. Not said by Rometty: IBM is losing money by the truckload in traditional IT. She touted recent breakthroughs in quantum computing, Internet of Things and Blockchain solutions for the IBM Cloud.

IBM stock traded at $161.55 up 1.06% after hours.

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— Mitch Wagner, Follow me on TwitterVisit my LinkedIn profile, Editor, Light Reading Enterprise Cloud.

danielcawrey 7/19/2016 | 1:53:52 PM
IBM and Startups Some of the initiatives IBM is pushing forth has to do with getting small technology companies to use their products. This has worked pretty well for Google and Amazon, courting small companies and growing with them. 

IBM has fallen behind on the services side because of this. There is hope it can catch up, though. 
Mitch Wagner 7/21/2016 | 9:12:44 PM
Re: IBM and Startups A strategy based on small technology companies may be too slow to build for IBM to gain leadership. 
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