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Unexpectedly good cloud business helped IBM grow again

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A strong cloud business has surprisingly helped IBM grow for the first time in a year and a half. The US company announced Tuesday, the fourth quarter growth of 21 percent to $6.8 billion revenue in the division, which will play a pivotal role in the future of the world’s largest IT service provider should play.

Instead of falling, IBM got bigger in the cloud

Instead of falling as expected by analysts, total revenue increased 0.1 percent to $21.8 billion. Net income increased to $3.7 billion. Excluding special items, earnings were $4.71 per share which was above the analysts’ expectations of $4.69. The IBM shares initially rose by 4.3 percent.

IBM is in a profound change. The “Big Blue” competes with SAP, among others. IBM bought Linux specialist Red Hat last year for $34 billion – the largest acquisition in the company’s history – to push ahead with the realignment.

In the past couple of years, we see that the CEO Ginni Rometty is trying to shift IBM’s focus to the cloud with acquisitions. Also the company sold some of its legacy businesses to get lighter. IBM also changed its reporting structure in 2019, now its two biggest segments are cloud and cognitive software, and global technology services.

 

 

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