IBM bounces back after revenue dips in 22 quarters

IBM Cloud for CIOs
IBM reported revenue of $22.5 billion (+1 percent) including Cloud revenue of $5.5 billion (+27 percent) in Q4 2017.

This is the first quarter of growth for IBM after a streak of 22 consecutive quarters of year-over-year top line decline.

IBM said its strategic imperatives revenue grew at a double-digit rate – representing 46 percent of total revenue.

IBM CEO Ginni Rometty said: “We strengthened our position as the leading enterprise cloud provider and established IBM as the blockchain leader for business. We are uniquely positioned to help clients use data and AI to build smarter businesses.”

IBM said Strategic imperatives revenue grew 9 percent led by the cloud practice, mobile and analytics.

Technology Services & Cloud Platforms revenues reached $9.2 billion, down 4 percent. IBM said Strategic imperatives revenue grew 15 percent, driven by hybrid cloud services, security and mobile.

IBM Systems revenues rose 28 percent to $3.3 billion, driven by growth in IBM Z, Power Systems and storage.

Stephanie Long, research analyst at TBR, said IBM is challenged by a shift away from its legacy capabilities that is occurring faster than its emerging technologies are taking off. The tech vendor is making strategic moves to maintain the levels of investment necessary to bring bleeding edge technologies, such as quantum computing to fruition while investing in the monetization of more mature emerging capabilities like blockchain.

Cassandra Mooshian, senior analyst at TBR, said IBM closes out the year on a high note, finally reaching corporate growth, driven in large part by the cloud business. Cloud is a particularly bright spot for IBM, with total cloud revenue growth reportedly over 30 percent over the same compare, reaching $5.5 billion.

Jennifer Hamel, senior analyst at TBR, said IBM’s Q4 2017 business results highlight that, although a new product launch can yield dramatic improvement in Systems revenue performance in one quarter, the return to services revenue growth will remain a slow and uneven process. Revenue declines persisted in Global Technology Services (down 1 percent) while Global Business Services (GBS) registered revenue growth of 1 percent.

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