IBM has pinned its first quarter of growth for more than a year on the changing fortunes of its cloud division, following five consecutive quarters of declining revenue.
The technology giant grew by 0.1% in the final quarter of 2019 versus the same period the previous year, recording revenues of $21.8 billion (£16.7 billion). This can be attributed to a 21% rise in total cloud revenue, which hit $6.8 billion.
Full year revenue for 2019 declined by 3.1%, however, dropping from $79.6 billion (£60.9 billion) in 2018 to $77.1 billion (£59 billion) last year.
"We ended 2019 on a strong note, returning to overall revenue growth in the quarter, led by accelerated cloud performance," said IBM chairman, president and CEO Ginni Rometty in a statement.
"Looking ahead, this positions us for sustained revenue growth in 2020 as we continue to help our clients shift their mission-critical workloads to the hybrid cloud and scale their efforts to become a cognitive enterprise."
Its open source software subsidiary Red Hat, for which IBM closed its $34 billion (£26 billion) acquisition last year, also grew by 24% year-on-year. The company now forms part of IBM’s cloud and cognitive software division, which in total grew by 8.7% to record revenues of $7.2 billion (£5.5 billion).
The firm initially submitted a bid to acquire Red Hat in late 2018 in order to enhance its hybrid cloud portfolio.
The move was largely seen as a shock and was branded a potential disaster by Puppet’s vice president of ecosystem engineering Nigel Kersten. However, these latest figures seem to prove the naysayers wrong.
"In 2019, we continued to invest in the higher-value growth areas of the industry and took bold actions – including several divestitures and a major acquisition – to position our business, which are reflected in our strong gross margin performance," added IBM’s senior vice president and CFO, James Kavanaugh.
RELATED RESOURCE
The future of EDI: an IBM point of view
Electronic Data Interchange is growing and maturing, and remains a backbone for global business
"After completing the acquisition of Red Hat, and with strong free cash flow and disciplined financial management, we significantly deleveraged in the second half."
Elsewhere, in terms of IBM’s performance in the fourth quarter of 2019, its global business services division declined by 0.6%. Its global technology services, meanwhile, including infrastructure and cloud services as well as support services, dropped a sharper 4.8%.
IBM's systems division, however, sustained an impressive growth of 16%, which translated to revenues of $3 billion (£2.29 billion). The main culprit was IBM Z, which alone saw a staggering 62% growth year-on-year.
-
Bigger salaries, more burnout: Is the CISO role in crisis?In-depth CISOs are more stressed than ever before – but why is this and what can be done?
-
Cheap cyber crime kits can be bought on the dark web for less than $25News Research from NordVPN shows phishing kits are now widely available on the dark web and via messaging apps like Telegram, and are often selling for less than $25.
-
Put AI to work for IT operationswhitepaper Reduce the cost and complexity of managing hybrid applications
-
AI in the retail industry is spreading beyond the IT departmentNews AI has become a strategic imperative for retailers, delivering marked productivity gains
-
Maximizing contact center operations with generative AI assistants backed by responsible AI principleswhitepaper Reduce the cost and complexity of managing hybrid applications
-
IBM just launched powerful new open source AI models – here’s what you need to knowNews Available under the Apache 2.0 license, IBM's Granite 3.0 models are trained on enterprise data and can out-perform the competition
-
Dell Technologies and Red Hat team up to bring generative AI to PowerEdge serversThe two companies say the collaboration will help customers ramp up deployment of generative AI models across hybrid cloud environments
-
Achieving business outcomes with generative AIWebinar Take your hybrid cloud journey to the next level with generative AI
-
Wimbledon’s new Catch Me Up AI feature promises to keep fans up to date at the tournament – after it irons out some of the wrinklesNews The latest feature to come out of IBM’s partnership with Wimbledon will keep fans engaged from the early stages right through to the final with dynamic player insights
-
AI demands new ways of data managementwhitepaper The data leader’s guide for how to leverage the right databases for applications, analytics and generative AI
