The stock price of International Business Machines has fallen 22% since its July high of $173 to $135, compared to a 1% decrease of 6% in the S&P 500 index during the same period. IBM’s subpar stock performance reflects investor sentiment, which has weakened as the company’s revenues have been on a decline. However, the recent efforts by the company to roll out its services on cloud is hampering its revenues but positively impacting its margins.
The company continues to focus on big data analytics and cloud computing services. This strategy is yielding results as the company is witnessing robust growth in revenues from these initiatives, especially in its Watson Analytics offering. Furthermore, its application offering is gain traction in the Software-As-A-Serivce (SaaS) market. In this article, we discuss key factors that contribute to our belief in IBM’s long-term potential in Cloud.
See our full analysis on IBM
Revenues From Cloud Services To Bolster GTS And GBS Businesses
Cloud services are transforming business solutions globally and companies are leveraging technology to offer new and improved services across traditional and new channels. IBM has spent billions of dollars building its cloud business globally with a number of acquisitions in 2015 that include Clear Leap, Merge Healthcare Inc., Gravitant, Inc., StrongLoop, Inc., Blue Box Group, Inc., Explorys, etc.
According to IDC, the cloud IT Infrastructure Market was forecast to grow 24% year over year in 2015 to $32.6 billion, driven by Public Cloud Datacenter expansion. For the five-year forecast period, IDC expects that cloud IT infrastructure spending will grow at a compound annual growth rate of 15.1% and will reach $53.1 billion by 2019. The research firm also predicts that cloud software will grow to surpass $112.8 billion by 2019 at a compound annual growth rate of 18.3%. Furthermore, IDC’s report states that SaaS delivery will significantly outpace traditional software product delivery, growing nearly five times faster than the traditional software market. According to IDC estimates, the cloud software development model will account for $1 of every $4.59 spent on software by 2019.
Read More: http://www.forbes.com/sites/greatspeculations/2016/01/04/how-ibm-cloud-can-boost-its-revenues/
The company continues to focus on big data analytics and cloud computing services. This strategy is yielding results as the company is witnessing robust growth in revenues from these initiatives, especially in its Watson Analytics offering. Furthermore, its application offering is gain traction in the Software-As-A-Serivce (SaaS) market. In this article, we discuss key factors that contribute to our belief in IBM’s long-term potential in Cloud.
See our full analysis on IBM
Revenues From Cloud Services To Bolster GTS And GBS Businesses
Cloud services are transforming business solutions globally and companies are leveraging technology to offer new and improved services across traditional and new channels. IBM has spent billions of dollars building its cloud business globally with a number of acquisitions in 2015 that include Clear Leap, Merge Healthcare Inc., Gravitant, Inc., StrongLoop, Inc., Blue Box Group, Inc., Explorys, etc.
According to IDC, the cloud IT Infrastructure Market was forecast to grow 24% year over year in 2015 to $32.6 billion, driven by Public Cloud Datacenter expansion. For the five-year forecast period, IDC expects that cloud IT infrastructure spending will grow at a compound annual growth rate of 15.1% and will reach $53.1 billion by 2019. The research firm also predicts that cloud software will grow to surpass $112.8 billion by 2019 at a compound annual growth rate of 18.3%. Furthermore, IDC’s report states that SaaS delivery will significantly outpace traditional software product delivery, growing nearly five times faster than the traditional software market. According to IDC estimates, the cloud software development model will account for $1 of every $4.59 spent on software by 2019.
Read More: http://www.forbes.com/sites/greatspeculations/2016/01/04/how-ibm-cloud-can-boost-its-revenues/
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