IBM Is Not A Cloud King

Grazed from TechCrunch. Author: Alex Williams.

IBM reported its third quarter financials this past week that showed a company struggling with its legacy hardware business and the problems that come with a confused cloud services strategy. Revenues were down $1 billion with hardware sales declining 17 percent. Overall revenues for the nine-month period totaled $72.1 billion, a decrease of 4 percent, compared with $75.2 billion for the nine months of 2012. The software division is not having tremendous success, either. This last quarter software sales were up just one percent.

IBM has troubles — its stock is at a two-year low and the company has made some big promises for the years ahead. It has stated it would make $7 billion in annual cloud revenues by 2015 and in the same year will give shareholders a return of $20 earnings per share. In the meantime, the SEC is investigating how IBM is counting its revenues for how it recognizes cloud computing…

Here’s the problem: As long as the company associates hardware with cloud computing then its troubles will continue to magnify and have a dilatory effect on the company’s ability to offer on-demand and self-service offerings. Amazon Web Servces (AWS) has achieved its success by not selling hardware. Of course. there is still a huge demand for companies to have their own infrastructure and IBM is providing that technology along with Cisco, Dell, HP and the rest…

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