IBM CEO outlines 10-year growth plan for Big Blue

published 12 May 2014

IBM's CEO Virginia Rometty has said that the company has a clear vision on strategy for the next decade.

Despite Big Blue's stock stagnating over the past two years, Rometty told The New York Times that firm is ready to generate new growth for a new generation. The company plans to continue shifting away from hardware and focussing on software and services, analytics, the cloud and infrastructure.

Having cut the rope of some of its smaller and less profitable investments, IBM has focused on gaining ground in new markets like big data and the cloud. Less than 15 per cent of the firm's revenue now comes from hardware sales - a huge turnaround - fuelled in part by the $2.3 billion (1.36 billion) sale of its server division to Lenovo.

The cloud is the best friend and worst enemy for IBM. Having displaced large sections of the company's MO by replacing the need for hardware, software and services in company data centres, cloud is now being heavily invested in by Big Blue. Its purchase of SoftLayer Technologies for $2 billion (1.19 billion) confirmed that a "cloud DNA" had taken hold. The company has a goal, too, of operating 40 cloud-centric data centres by the end of 2014, and has invested around $1.2 billion (710 million) into doing so.

Cloud computing, says Rometty, is a key opportunity for the future: "I feel very good about the direction and how we've crystallised it ... we are making progress and we just need to keep moving with speed."

Though coming up against big rivals in the form of Amazon Web Services, Google and Salesforce, IBM's cloud business grew by 69 per cent in 2013 on the back of strong performance in the private cloud market.

The corporate world is still a big earner for the company, with $16.5 billion (9.78 billion) in net profits yearly propping up IBM's bank accounts. IBM generated $16 billion alone from its investments in the data analytics sector in 2013, another of the company's strategies to modernise in a changing technology industry.

"We are transforming this company for the next decade, that is not a one-year job. Not when you're a hundred billion-dollar company," Rometty added.