IBM cloud revenues up despite coronavirus uncertainty
The tech giant withdraws full-year guidance and will reassess position for final quarter of 2020
IBM is withdrawing its full-year guidance for 2020 due to the current coronavirus pandemic and will reassess its position when there is more economic clarity.
The company's decision comes after reporting a 3.4% drop in revenue for the first quarter of 2020.
Disruption from COVID-19 is the first real test of Arvind Krishna's leadership since taking over from Ginni Rometty as CEO. The tech giant reported revenues of $21.8 billion (£16.7 billion) shortly before Rometty announced her retirement. On Monday it reported $17.6 billion (14.2 billion) for the first three months of 2020.
The company said it will reassess this position based on "the clarity of the macroeconomic recovery at the end of the second quarter".
Despite the drop, other elements of IBM's business performed well. The firm's cloud and cognitive software saw a 5% increase, with total cloud revenue up 19% to $5.4 billion (£4.4 billion). Similarly, Red Hat revenue also saw an increase of 18%.
"I believe that what we are going through today, with the shift to remote work, automation ... will accelerate our client's shift to hybrid cloud," Krishna said on a call with Wall Street analysts Monday. "This gives me immense confidence in our future."
Since its $43 billion acquisition of Red Hat, and the subsequent shift in focus towards hybrid cloud, IBM has seen continued growth in that particular market.
Assembling your cloud orchestra
A field guide to multicloud managementDownload now
After five consecutive quarters of declining revenue, the final three months of 2019 saw a 0.1 increase largely based on its cloud success. Total cloud revenue for the final quarter of 2019 hit $6.8 billion (£5.5 billion), a rise of 21%.
In the grand scheme of things, IBM is still far behind the likes of AWS and Microsoft for cloud computing revenues, but it is one of the first to release quarterly performance since the pandemic, which could have a big impact on all the major market players.
How to be an MSP: Seven steps to success
Building your business from the ground upDownload now
The smart buyer’s guide to flash
Find out whether flash storage is right for your businessDownload now
How MSPs build outperforming sales teams
The definitive guide to salesDownload now
The business guide to ransomware
Everything you need to know to keep your company afloatDownload now