Cloud services push IBM revenues up

19 April 2016 |


IBM has reported first-quarter earnings that were better than expected due to a strong performance from its cloud services division.

IBM posted earnings per share of $2.35 on revenues of $18.68 billion. Wall Street analysts had expected earnings of approximately $2.09 a share on sales of $18.29 billions.

The company said that its quarterly revenue from strategic businesses like cloud and analytics increased by 14% year on year and now represent 37 % of its revenue. IBM's cloud revenue rose 34 % and totalled $10.8 billion over the last 1year

"We are pleased with the progress we have made helping our clients apply new cognitive solutions and hybrid cloud platforms," Ginni Rometty, chairman and CEO of IBM, said in a statement 

Only this week IBM's cloud video unit announced new partnerships with AOL, Broadway Video, Comic-Con and Canadian Broadcasting Corp.

IBM has been moving into areas it calls strategic imperatives such as cloud, security software, and data analytics while cutting out hardware. This shift to high-growth businesses has started to show results.

However, it must be remembered that while IBM’s ‘strategic imperatives’ are growing, they are not doing it faster than overall revenue, therefore, the entire company’s revenues are still declining. While the move to the cloud is helping IBM it needs to speed up its usage in the telecoms market.