IBM tells investors not to panic over cloudy future
CEO Ginni Rometty writes letter spelling out Big Blue’s achievements after woeful quarter
IBM has highlighted the strengths of its emerging technologies in a letter to investors, following a poor final quarter of 2014.
CEO Ginni Rometty is tasked with overseeing a turnaround in Big Blue's fortunes, but watched revenue slide 12 per cent year-on-year to $24.1 billion in the last three months of last year.
Much of the firm's woes come from its legacy business, with hardware falling a whopping 39 per cent year-on-year to $2.4 billion.
Rometty has belatedly responded with a letter to investors designed to raise flagging spirits, outlining the positives that have perhaps been overshadowed by the decline of the tech firm's legacy business.
She wrote: "Our choice is clear: We pursue a model of high-value innovation, rather than commodity technology, products and services. Our commitment to this model compels us to reinvent businesses continually."
That commitment has seen Big Data and analytics revenue jump seven per cent to $17 billion in 2014, and the division made nine acquisitions over the year, and boasts an ecosystem of 6,000 partners.
Cloud grew 60 per cent to $7 billion in revenue last year, and mobile growth more than tripled.
"Going forward, we expect this to benefit from the apps from our strategic alliance with Apple and our global network of digital design studios," said Rometty.
She also stressed the fact that together, cloud, analytics, mobile, social and security made up just 13 per cent of IBM's overall revenue five years ago.
Today, they account for 27 per cent.
Rometty wants to reassure investors that IBM's on the right path, and so made clear that Big Blue will throw $4 billion at developing "data, cloud and engagement" in 2015.
She also vowed to reinvent core the lagging legacy divisions IBM made its name on, and cited the importance of its partnerships with the likes of Apple, Twitter and SAP.
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