IBM Posts Eleventh Consecutive Revenue Decline

CloudCloud Management

Shares drop as IBM’s cloud maneuvering slow to find grip

IBM has posted a 2015 profit target that has fallen short of analysts’ estimates alongside reporting an eleventh consecutive quarterly revenue decline.

IBM’s revenue has fallen almost 12 percent from the same time last year to £15.9bn in Q4. Annual revenue has declined from almost £71bn in 2011 to £61bn in 2014.

Net income is also down 11 percent to £3.6bn in the same quarter.

IBM’s ‘transformation’

In a statement on Tuesday, chief exec Ginni Rometty said: “We are making significant progress in our transformation, continuing to shift IBM’s business to higher value, and investing and positioning ourselves for the longer term.”

A waning demand for its hardware such as servers and storage products mixed with an ongoing shift to keep up in the cloud computing market has dramatically affected the once number oneIBM hardware provider in the world.

IBM shares dropped 1.8 percent in extended trading last night, down to $154.05.

Last October, IBM paid £930m in cash to shed its chip-making division GlobalFoundries, with Rometty pinning the blame on evolving client buying behaviour.

All-out cloud

This year, IBM’s cloud services will be pushed to 40 new cloud data centres to cater for global demand. A deal with data centre and colocation provider Equinix provides the backbone for this move.

“IBM recognises that businesses and governments need the cloud to help them innovate, grow and operate more efficiently in concert with their existing IT investments,” said Jim Comfort, general manager of IBM Cloud Services.

“Everything IBM does is designed to help companies transition to the cloud in a responsible way at a pace that best fits their business model and industry.   Just as we helped major organisations transform in each preceding era of IT, IBM now serves as the cloud platform for the enterprise.”

The deal with Equinix sees an agreement to provide enterprises direct access to the full portfolio of cloud services from SoftLayer via the Equinix Cloud Exchange.

Even IBM’s recent mainframe release was cloud orientated. The z13 has been made to deal with the massive explosion of mobile transactions happening every day around the world – 2.5 billion to be exact, according to the firm.

The z13 cost IBM almost $1bn in investment over its five-year development cycle and has embedded analytics providing real-time insights on all transactions.

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