IBM, the US-based technology major, announced flat revenue growth in the first quarter of 2018 to $19.1 billion with $9 billion (+10 percent) coming from strategic business areas and $4.2 billion (+14 percent) from Cloud business.
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IBM in recent years shifted its focus to higher-margin businesses such as cloud computing, cybersecurity and data analytics, to counter a slowdown in its legacy hardware and software businesses.
IBM CEO Ginni Rometty said: “These results reinforce that our clients value our innovative technologies, our industry expertise and our commitment and actions for the responsible stewardship of their privacy and data. This is also reflected in our leadership positions in enterprise cloud, AI and security.”
IBM generated first quarter revenue of $4.3 billion (+2 percent) from Cognitive Solutions, $4.2 billion (–1 percent) from Global Business Services, $8.6 billion (–1 percent) from Technology Services & Cloud Platforms and $1.5 billion (+4 percent) from Systems business.
IBM said business growth in Cognitive Solutions was driven by solutions software, including security, analytics, and industry platforms; and transaction processing software.
Global Business Services’ strategic imperatives revenue grew 12 percent led by the cloud consulting practice, with double-digit growth in analytics and mobile.
Technology Services & Cloud Platforms’ strategic imperatives revenue grew 24 percent, driven by hybrid cloud services, security and mobile.
IBM Systems revenues were driven by growth in IBM Z and Power.
IBM said strategic imperatives revenue over the last 12 months was $37.7 billion, clocking 10 percent growth.
IBM’s cloud revenue over the last 12 months was $17.7 billion, registering annual growth of 20 percent.
The annual exit run rate for as-a-service revenue increased 20 percent to $10.7 billion.
IBM revenues from analytics increased 4 percent. IBM revenues from mobile increased 14 percent. IBM revenues from security increased 60 percent.
TBR Senior Analyst Jennifer Hamel said IBM Services’ transformation reached another key milestone, achieving its fastest year-to-year revenue growth (4.7 percent, reaching $11.8 billion) since Ginni Rometty became CEO in 2012.
TBR said revenue from strategic imperatives expanded by double digits in both Global Business Services (GBS) and Global Technology Services (GTS) segments, as IBM continues orienting its services business toward hybrid IT management and digital transformation.
TBR Senior Analyst Cassandra Mooshian said IBM’s earnings of $19.1 billion, up 5.1 percent in constant currency, marks the second consecutive quarter of growth after a streak of 22 consecutive quarters of year-over-year decline, indicating that the company may finally be bouncing back from its downward spiral.
