IBM 2015 Revenues Emphasize Strong Cloud Strategy

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IBM is one of the biggest technology companies in the world and it’s in the process of a multi-year transformation to re-make itself for a new era of cloud and IT services. Part of IBM’s transformation success was revealed during the company’s fourth quarter and full year 2015 earnings results, which were reported on January 19.

For the fourth quarter of 2015, IBM reported revenue of 22.1 billion for a 9 percent year-over-year decline. Net Income for the quarter was reported at $4.5 billion for a 19 percent decline. Looking at the full year, IBM’s revenue came in at $81.7 billion for a 12 percent year-over-year decline.

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“A couple of years ago, we laid out our strategic imperatives around big data and analytics, around cloud, and around mobile and security, the areas where our clients are looking to us to help move them to the future,” Martin Schroeter, SVP and CFO of IBM said during his company’s earnings call. “Our strategic imperatives continued strong performance, up 26 percent for the year, this now represents 35 percent of IBM’s revenue.”

IBM made multiple acquisitions in the cloud space over the course of 2015, with two in the fourth quarter. With the acquisition of Gravitant, IBM gained new capabilities to help broker software and computing services across multiple suppliers and cloud environments from a single screen. IBM also acquired Clearleap, which is a provider of cloud-based video services.

The move to cloud is also fueling IBM’s expenditures to bolster its data center infrastructure around the world.

“We invested nearly a billion dollars in capital expanding our global cloud data center footprint to 46,” Schroeter said.

Part of that investment is helping to enable the IBM Bluemix Platform-as-a-Service (PaaS) which now has over a million users, with 15,000 new developers joining the platform every week.

“What we’ve been saying for some time is that clients are utilizing a cloud not just to reduce costs, but to gain agility and enable innovation,” Schroeter said. “Whether they’re consuming as-a-Service, or through their own clouds or, as in the case of most enterprise clients who are implementing a hybrid environment, we’re leading that move.”

While cloud represents the future for IBM, the mainframe hardware business is now also picking up. Schroeter noted that in the fourth quarter of 2015 z Systems revenue was up more than 20 percent.

“Since the launch of z13 in the first quarter of 2015, we have delivered growth of 35 percent,” Schroeter said.

IBM’s Power hardware is also growing, with fourth quarter revenue up by 8 percent. With Power, IBM is continuing to serve it Unix customers, though Unix is not where the growth lies.

“We introduced low-end Linux-based Power systems to capture the growing Linux market, and are building an IP stream through the OpenPOWER ecosystem,” Schroeter said. “Even though the Unix market is declining, by delivering innovation and repositioning the platform, our Power systems have grown four quarters in a row. This is a good example of how we transform ourselves.”

Sean Michael Kerner is a senior editor at Datamation and InternetNews.com. Follow him on Twitter @TechJournalist

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