IBM’s Silver Lining: The Cloud

IBM announced first-quarter earnings results, with traditional software and hardware solutions slumping, while next-generation offerings surged.

The company's first-quarter cloud revenues increased 33% to $3.5 billion, totaling $14.6 billion for the last 12 months. Its annual exit run rate for cloud as-a-service revenue increased to $8.6 billion from $5.4 billion in the first quarter of 2016. Revenues from analytics increased 6%, while revenues from mobile increased 20% and revenues from security increased 9%.

Meanwhile, Technology Services & Cloud Platforms (includes infrastructure services, technical support services and integration software) saw revenues of $8.2 billion, down 2.5%, with “strong growth” in strategic imperatives driven by hybrid cloud services. Systems (includes systems hardware and operating systems software) had revenues of $1.4 billion, down 16.8%.

"In the first quarter, both the IBM Cloud and our cognitive solutions again grew strongly, which fueled robust performance in our strategic imperatives," said Ginni Rometty, IBM chairman, president, and chief executive officer.  "In addition, we are developing and bringing to market emerging technologies such as blockchain and quantum, revolutionizing how enterprises will tackle complex business problems in the years ahead." 

IBM’s Cognitive Solutions (includes solutions software and transaction processing software) – saw revenues of $4.1 billion during the quarter, up 2.1%, driven by growth in analytics and security, which include Watson-related offerings.

IBM Global Business Services (includes consulting, global process services and application management) – saw revenues of $4 billion, down 3%.  Strategic imperatives “grew double digits,” the company added, led by the cloud and mobile practices.

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