IBM Sees Growth from Cloud and System z in Q3

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IBM announced revenue of $19.2 billion for the third quarter of 2017, up 11%. The company also announced “strategic imperatives”—from cloud and analytics—revenue of $34.9 billion over the trailing 12 months, up 10%. These imperatives represent 45% of IBM revenue.

Technology Services & Cloud Platforms (includes infrastructure services, technical support services, and integration software)—had revenue of $8.5 billion, down 3%.  Strategic imperatives revenue grew 12%, driven by hybrid cloud services, security, and mobile. Systems (includes systems hardware and operating systems software)—revenue of $1.7 billion, was up 10%, driven by growth in z Systems and storage.

"In the third quarter we achieved double-digit growth in our strategic imperatives, extended our enterprise cloud leadership, and expanded our cognitive solutions business," said Ginni Rometty, IBM chairman, president and CEO.  "There was enthusiastic adoption of IBM's new z Systems mainframe, which delivers breakthrough security capabilities."

Third-quarter cloud revenue increased 20% to $4.1 billion.  Cloud revenue over the last 12 months was $15.8 billion, including $8.8 billion delivered as-a-service and $7.0 billion for hardware, software and services to enable IBM clients to implement comprehensive cloud solutions. 

The annual exit run rate for as-a-service revenue increased to $9.4 billion from $7.5 billion in the third quarter of 2016. In the quarter, revenue from analytics increased 5%. Revenue from mobile increased 7% and revenues from security increased 51%.

Cognitive Solutions (includes solutions software and transaction processing software) saw revenue of $4.4 billion, up 4%, driven by solutions software, including security and analytics, and transaction processing software.

Global Business Services (includes consulting, global process services and application management)—had revenue of $4.1 billion, down 2%.  Strategic imperatives revenue grew 10%, led by the cloud practice.

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