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IBM Q3 results suggest firm’s big cloud bets are paying off

IBM posted flat revenue figures for third quarter overall, despite solid growth generated by its big data, cloud and artificial intelligence activities

IBM has reported flat top-line growth in its 2016 third quarter results, despite reporting solid revenue gains on the back of its cloud, analytics and artificial intelligence (AI) activities.

The hardware giant banked an overall revenue of $19.2bn for third quarter, which is on a par with how it performed during the third quarter of 2015.

In a conference call to discuss the results, transcribed by Seeking Alpha, Martin Schroeter, senior vice-president and chief financial officer of IBM, was keen to point out there are a number of bright points in its results than its flat revenue figure might suggest.

“Our revenue was essentially flat, relative to last year. Looking at the revenue dynamics, I want to point out a few things,” he said.

“Our clients are focused on becoming digital businesses and have strong growth in cloud, security and mobile, and our analytics portfolio reflects this.”

The company has been making a concerted effort in recent years to move beyond its hardware and services roots, and tap into the growing enterprise demand for cloud, analytics, AI and security products.

In support of this, the company outlined plans to expand its datacentre footprint by announcing the opening of facilities in Norway and South Korea this past quarter.

The shift in strategy appears to be steadily paying off for the firm, with the revenue generated by its collective activities in these areas, termed its Strategic Imperatives, rising 16% year-on-year to hit $8bn.

Breaking down these figures further, IBM said its cloud revenue was up 44% on 2015, while the amount generated by its analytics offerings rose 15%. Meanwhile, the revenue generated by its mobile and security activities were up 19% and 11%, respectively.

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Ginni Rometty, chairman, president and CEO of IBM, said the company’s third quarter performance is proof of its leadership position in the AI and cloud markets.

“Our ability to apply deep expertise and breakthrough technology, led by Watson and the IBM cloud, to massive amounts of data is enabling us to build markets and transform industries,” she said.

“Whether it is banks implementing IBM blockchain systems, hospitals leveraging Watson to fight cancer, or retailers using cognitive apps built on the IBM cloud to transform the customer experience, clients across all industries are tapping into a new kind of innovation value from IBM.”

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